Inside Asian Gaming

April 2008 | INSIDE ASIAN GAMING Feature 15 S heldon Adelson was so pleased with his concept of turning Macau into ‘Asia’s Las Vegas’ that he even had the phrase trademarked. He may have succeeded in ways beyond his original intention, because now some of the locals are attempting to sue him Las Vegas-style—for a great deal of money. Courtroom drama The United States is famous for being one of the most litigious societies in the world, and one of the most heavily lawyered, with 370 attorneys for every 100,000 people, according to the Institute for Judicial Studies in New York City. In mainland China, by contrast, there are only eight lawyers per 100,000 people,according to themost recent data, says the Institute. Getting an equitable hearing can also be tricky in some Asian courts, especially on the Chinese mainland, where the way the law is applied can vary from province to province and even from courtroom to courtroom. It’s no wonder that in Asia, stories abound of major business deals being agreed on a handshake, slips of paper, or even restaurant napkins. Richard Suen,a Hong Kong businessman and principal of a firm called Round Square Co., originally seems to have chosen the relatively informal Asian way of doing a deal, but has now plumped for the American method of settling a dispute. He claims Las Vegas Sands Corp. promised him a US$5 million success fee for helping the company secure a gaming license in Macau in 2002, but failed to pay. More significantly, he also claims he was promised 2% of LVS’s net profit in Macau for his help. In support of his claim, he’s thought to be offering not an unlaundered table napkin, but a fistful of faxes between him and senior LVS executives. More to come The case is just one of three being brought by disgruntled plaintiffs who claim they have missed out on promised rewards for helping LVS get its Macau gaming permit. Litigation is awayof life inAmericanbusiness, so it would be easy to dismiss such events as irritations—something equivalent to a gnat biting an elephant. Mr Suen is, however, a long way from what one would think of as a vexatious litigant. He’s been described as well connected in government circles in Macau and China. It’s also been reported that he knew Mr Adelson’s brother, Lenny, prior to the Macau gaming license saga. LVS is expected to claim there was no contractual obligation to pay Mr Suen and that, if anything, his involvement hindered rather than helped its efforts to enter the Macau market. The company says it intends to defend this matter and the other two suits “vigorously”. Macau focus That’s hardly surprising. Mr Adelson’s personal fortune and the fortunes of his company have soared since he opened his Chinese operation in 2004. Morgan Stanley analyst Celeste Mellet Brown said in a recent note to investors that this year, around 65% of LVS’s earnings before interest, taxes, depreciation and amortisationwill come from outside the US. By 2010, the company will only generate 25% of its EBITDA in the US, as the Macau properties grow and a Singapore casino eventually opens, she adds. Under those circumstances, Mr Adelson will be in no mood to share a percentage of his net Macau income with Mr Suen or anyone else without a very hard fight indeed. Although Mr Adelson did fall from number six to number 12 on the Forbes Billionaires List this March, his personal wealth is still Vegas-style Litigation The long and winding road of law suits that could cost LVS in Macau