First, the good news. Business is off and running at brand-new Sands Cotai Central, whose Himalaya casino (372 tables, 600 slots) opened last Wednesday. In total square footage, it overtakes Venetian Macao for status as the world’s largest casino (30% larger) and will be joined by the Pacifica casino in September. Incidentally, if you think the current Revel opening is “soft,” Sands Cotai is still a year away from completion. When finished, it will unleash an additional 5,800 hotel rooms and 600 stores onto the Macao marketplace. The former are going to be a real “supply shock” for a hotel market that was finally getting up to speed in terms of occupancy rates and length of stay. CLSA casino analyst Jon Oh made the trek to Sands Cotai and found “a large crowd swarming the property.” He predicts Sands share of the Macanese gaming trade will grow sufficiently to push it past the 20% level … which would significantly narrow the gap between Sands China and market leader Sociedade de Jogos de Macau. Mr. Oh further projects $691 million in cash flow next year, which — given the project’s $5 billion price tag — works out to a 14% return on investment. Fairly impressive. However, when you consider that Galaxy Macau (albeit with 3,600 fewer hotel rooms) was built for $1.9 billion, you have to wonder if Sands is getting the most bang for its buck.
Adelson indicated that he’s dickering with Macanese authorities about getting Sites 7 & 8 back, by making various (unspecified) concessions. Wouldn’t we love to be a fly on the wall for those conversations! Not to worry: He’s still got enough undeveloped land to keep him busy in the meantime. And he’s in favor with City Hall for the time being, having received permission to hire a 50/50 mix of resident and guest workers. By contrast, Galaxy Macau had to staff at a 2:1 ratio of locals to imported labor.
While Adelson remains AWOL in his home state of Massachusetts and his flunkies continue to send contradictory signals regarding Florida, the tycoon himself is in a New York state of mind. You have to wonder at his apparent willingness to kneecap his own Sands Bethlehem, just as it’s living up to expectations. Also, Adelson’s swerve into Manhattan has the look of a grudge match with Genting, whose high-profile ambitions relegated Las Vegas Sands to a back seat during the Florida Lege’s latest grapple with casino expansion and which is currently the darling of the Empire State. Adelson’s site of preference would be the Jacob K. Javits Convention Center, which has the virtue of being just off the Lincoln Tunnel and the vice of not being near much of anything. However, if casinos are to be built in Manhattan, this seems as innocuous a location as any. Adelson could do much worse. Besides, Mayor Michael Bloomberg is unlikely to have truck with the sort of strong-arm antics that Big Shel is currently pulling over in Spain, to the industry’s considerable disgrace. Since N.Y. State lawmakers just nixed Gov. Andrew Cuomo‘s redevelopment plans for the site, Adelson’s interest in the Javits Center is not only timely but — if it doesn’t require public subsidy — probably very welcome. Just one thing: Don’t call it “Venetian New York,” ‘kay?
Oh, about that photo. Forbes‘ depiction of cover-guy Adelson will remind Pardon the Interruption viewers of that talk show’s beloved “heads on sticks” segment: You know, the part where Tony Kornheiser and Michael Wilbon hold cardboard masks in front of their faces and opine in the personae of well-known sports figures. Seriously, it looks like the art-direction monkeys at Forbes just had some guy hold up an Adelson party mask and tried to pass it off as a cover shot. Notice how the tanned face doesn’t match the pallor of the hands. When blown up to 100%-plus size, that visage looks suspiciously (read: totally) like a creepy digital fabrication. The real Adelson’s eyes are darker, for one thing, and God only knows where Forbes got that thick, woolly pelt of a “comb-over.”
“Brought [Gingrich] back from the dead,” huh?
The story, by Steven Bertoni, provides considerable insight into Sands’ corporate politics. Of course, Big Shel trots out the old “It’s never my fault” wheeze, the dustiest excuse in Big Gaming, when confronted with Sands’ near-meltdown during the Great Recession. It’s interesting that Sheldon has a problem with Americans wanting “handouts” when he’s positioning himself as the biggest corporate-welfare queen in Spain, a far more economically parlous nation. As for Bertoni’s contention that Peking “moved quickly and elegantly to clean up the scene” in Macao, I gather he regards the summary execution of several Triad leaders as speed and the stationing of 1,000 troops in the enclave as elegance. He’s Sheldon’s kind of guy.
That GSA caper involving price-fixing at M Resort just won’t go away, especially with Rep. Darrell Issa (R-CA) now on the case. Ironically, the follow-up Las Vegas event that got scrapped was a low-budget affair at the non-gaming Hampton Inn, just off Tropicana Avenue (in kind of a dodgy part of town), so the barn door was closed long after the horse escaped. However, Las Vegans are getting to witness the extremely unusual spectacle of both the Las Vegas Review-Journal and its bete noire, Sen. Harry Reid (D-NV) firmly on the same side of an issue. That crackling sound you hear is Hell freezing over.
Believe it or not, Old Sixty Votes’ pet project, the Choo-Choo To Nowhere is just one hurdle away from getting $5 billion in federal funding — an exponentially unprecedented amount of largesse. (Never underestimate Reid’s ability to bring home the bacon.) Although the Washington Post puts too much credence into a rival “My Party” locomotive, methinks, it is to be applauded for attempted to halt this train robbery As its editorialists opine, “If the casino moguls want a train, let them build it with their own money; taxpayers shouldn’t have to go along for the ride.” Well put — and after the demise of Atlantic City‘s ACES rail service, I doubt the industry will take the Post up on its challenge.
(Interestingly, the investors include motel baron Gary Tharaldson, who made a fortune by purchasing the Westward Ho and its sister property, The Ho. Tharaldson feigned to plan a multi-billion-dollar megaresort, enabling him to cash out the site to Harrah’s Entertainment for $18 million an acre. Gary Loveman then traded the acreage to Boyd Gaming in return for the Barbary Coast, and Boyd and Tharaldson both made out like bandits.)
Whatever happens, you can’t find a better laugh line than Desert Xpress CEO Andrew Mack‘s howler: “It’s Victorville that makes the project work.” No, Mr. Mack, it’s Victorville that is the problem, sir.