Sheldon Adelson’s EuroVegas Casino Resort Project Collapses
Spanish Authorities Deem Las Vegas Sands Corporation Demands Too Extreme, One-Sided
On Friday, Spanish authorities and the US-based Las Vegas Sands Corporation both announced that the massive EuroVegas casino/resort development project scheduled to be built near Madrid, Spain has been cancelled. Reports vary by degree, but all mainstream outlets agree that the cause of the project’s collapse was the refusal of the Spanish government to grant additional concessions to LVSands and its CEO, Sheldon Adelson.
Las Vegas Sands touted the project as a major economic boon to the Spanish economy, promising as many as 250,000 new jobs. The entire EuroVegas project, with projected construction costs of USD $30 billion (or 18 billion British pounds) was to include six separate casinos, 12 hotels, and hundreds of shops. The project had been on the drawing board for more than two years.
Officials cited new demands made by Adelson and LVSands as being impossible to concede, claiming that in addition to guaranteeing a profit for the development, they had the effect of ceding Spanish governmental oversight over the gambling mega-resorts. Adelson and LVSands had already won an earlier series of concessions, including a waiver of a ban on smoking in public places that is otherwise in effect throughout Spain.
The latest series of demands, according to multiple reports, included both tax incentives and a lower base tax rate, a guarantee against future policy changes on gambling matters (which would have bound future Spanish political regimes not even currently in office), and a lockout aimed at barring possible future competitors in the Spanish market.
The Spanish negotiators finally had enough, and a couple of Spanish-language reports indicate the falling out occurred roughly two months ago, with LVSands and the Spanish government at loggerheads ever since. When the project’s collapse was brought up in the government’s weekly Cabinet meeting, Soraya Saenz de Santamaria, the deputy prime minister, said, “The government needs to preserve the general interests of all Spaniards.”
“New conditions were put forward concerning taxes and legal protection,” added de Santamaria, “which could not be taken on board by the administrations involved.”
In little surprise, Adelson and LVSands took a high-handed approach in releasing their own statement confirming the EuroVegas project’s collapse. “[A] formal proposal to invest more than $30 billion to develop a series of integrated resorts in Madrid, Spain,” stated the LVSands presser, “will not be forthcoming from the company.”
Adelson, the company’s controversial billionaire CEO, also issued a quote. Said Adelson, “We have reiterated time and again that our internal development process would dictate the outcome of a proposed development in Spain. That process has been extremely thorough and while the government and many others have worked diligently on this effort, we do not see a path in which the criteria needed to move forward with this large-scale development can be reached. As a result we will no longer be pursuing this opportunity.”
Adelson further noted that he and Las Vegas Sands will instead continue focus on expanding land-based casino opportunities in the Asian market, particularly in “Japan and Korea.” Adelson hopes to “dramatically enhance [those countries’] tourism offering through the development of integrated resorts there.”
Las Vegas Sands already operates four lucrative casinos in Macau — the Sands Macau and three other casino resorts known collectively as the Cotai Strip: The Venetian Macau, the Four Seasons Motel Macau, and Sands Cotai Central. The four Macau casino properties account for the vast majority of the operating revenues generated by LV Sands, dwarfing the revenue from the company’s three US gambling properties — the Venetian and Palazzo in Las Vegas and the Sands Bethlehem in Pennsylvania.