Marina Bay Sands CEO and President and Las Vegas Sands Managing Director for Global Development George Tanasijevich discusses the company’s ongoing quest for global expansion in an exclusive interview with Inside Asian Gaming.
By Muhammad Cohen | Editor at large
At the Japan Gaming Congress in Tokyo last May, top casino executives from across the world all boasted about the magnificent integrated resorts their company would build in Japan. All, that is, except Las Vegas Sands Managing Director for Global Development George Tanasijevich.
“The day will come for me to make a very strong pitch for Las Vegas Sands,” Mr Tanasijevich declared at the time. “But here I want to talk about an issue that’s prominent, responsible gaming, and talk about what we’ve done in Singapore.”
He spent his allotted time describing efforts to combat problem gambling by LVS in cooperation with Singapore’s government. Mr Tanasijevich’s approach wowed the audience.
“He really seems to understand Asia,” one admirer cooed. American by birth, Mr Tanasijevich earned degrees in law and business, worked with a leading US retail mall developer, then moved to Singapore to work for CapitaLand, Southeast Asia’s largest real estate and hospitality conglomerate, in which Singapore’s government holds a substantial stake.
He joined LVS in 2004 as Director of Development, briefly overseeing the gestation of Venetian Macao and Cotai. When Singapore began its casino legalization process, Mr Tanasijevich returned to the Lion City, leading LVS efforts to win one of the casino licenses at the designated locations that Prime Minister Lee Hsien Loong’s government offered. LVS won the prime Marina Bay location, bolstered by Mr Tanasijevich’s Singapore street cred. He oversaw development – and since 2011 has been President and CEO – of what remains the world’s single most expensive standalone casino property, the US$5.7 billion Marina Bay Sands.
Now Mr Tanasijevich spearheads LVS efforts to break that record with an IR in Japan. His conversation with Inside Asian Gaming Editor at Large Muhammad Cohen began with Japan before examining other potential expansion locations in the region.
Muhammad Cohen: Why is Las Vegas Sands the best choice for Japan?
George Tanasijevich: We’ve got a proven track record across international markets and in the US that indicate that our business model is the right one for major metropolitan areas. We’ve indicated in the past that we are focused on Tokyo and Yokohama and Osaka.
We think what we bring to the table is what the market needs right now. I can give you an example in the case of the MICE business. There’s not a full service modern facility that can cater to all of the needs of the biggest and most successful international events and so, as a result, the market here is largely – I don’t want to say overly – focused on domestic events. We stand in a position where we have a network and a reputation and relationships that span from America through Asia and a book of business that we could immediately introduce to this market and start to circulate various events through here. Aside from that, we’ve got a balance sheet to make a substantial investment. So I think we could create something, in terms of an integrated resort, that doesn’t even exist in the world today.
MC: Whether or not legislation explicitly requires it, an IR in Japan will almost certainly need a local partner. Las Vegas Sands doesn’t have a great track record with partners (The LVS-Galaxy Entertainment partnership split after winning a Macau gaming concession, which ironically led to the creation of sub-concessions and a doubling of the number of operators from three to six). Where does LVS stand on taking a partner in Japan?
GT: Our position in this market is that we are open to anything at this point in time. It’s premature to make any decision about who will be the parties that we would collaborate with because we don’t know exactly what the opportunity is going to be and where it’s going to be. The fact is even potential partners or collaborators at this point in time are not selecting operators because they suffer from the same lack of definition or understanding that we do. Over time, once the is framed up and it’s more clear what the expectations and the demands of the government’s process will be, we could start making some decisions along those lines.
We recognize that Japan is a new market for us We have a lot to learn. It’s a complex market that requires local knowledge, so you should expect us collaborating with the Japanese parties. Quite frankly, we are already doing it in certain contexts right now.
MC: Let’s talk about the potential regulatory structure. At Marina Bay Sands you’ve an entry tax of SG$100 (around US$70), you’ve got restrictions on the size of the casino, you’ve got detailed requirements for nongaming amenities – Steve Wynn said the process was micromanaged. Yet, along with all the extraordinary benefits IRs have bestowed upon Singapore, Marina Bay Sands is probably the most profitable casino resort on earth, and its counterpart, Genting’s Resorts World Sentosa, is likely second. So why shouldn’t Japan do exactly what Singapore has done?
GT: I think that Japan should look to Singapore as a sort of reference point, as a market where they can learn how things work. But the fact is that they should take a global perspective on this, study all major markets that have casinos and integrated resorts and assess for themselves what works and what doesn’t work and use that as a starting point. Then identify market specific issues in Japan that would need to be addressed by measures that aren’t relevant in these other markets and come up with a framework that will address those, and then roll that into the international best practices that they deem appropriate for Japan and create something that’s customized for this market and will deliver the results that they desire.
MC: Would a US$10 billion casino be feasible with a US$100 entry fee?
GT: Well, first of all it’s not a casino – it’s an integrated resort. My chairman [LVS founder Sheldon Adelson] has been quoted widely as saying he could foresee that as the amount of the investment that could be appropriate for this market. But we are making an estimate at this point in time and look forward to having a little bit more definition about where the integrated resorts will be and what some of the rules are that relate to it, so that we can then come back with more feedback on that and many other things. But what Mr Adelson was indicating is that he sees the potential for that to be an appropriate size investment and that Las Vegas Sands is capable of making that size of an investment.
MC: Aside from your global development role, you also run Marina Bay Sands. What about a third IR in Singapore? Would you welcome that or discourage that?
GT: That’s not a decision for us to make. This is a decision for the Singapore government and the people of Singapore.
As you probably know, the exclusivity period is expiring this year and the government is free to consider whether it wants to issue another license. My expectation is that they will be diligent in their analysis of the and we await their decision on it.
In the meantime, we are not sitting around being concerned about this, but instead just doing our job and constantly reinvesting in our property and looking at ways to offer the best amenities and attractions that we can possibly serve up to our customer base. In a short of period of time you’re going to become aware of some major reinvestment we’re going to make in the property that will be quite attractive and will not just be welcomed by international tourists but will be welcomed by Singaporeans as well.
MC: Slipping on your global development hat again, Las Vegas Sands has repeatedly expressed interest in Vietnam, if it allows its own citizens access to casinos. Vietnam recently took the first step, announcing an experimental program to allow its citizens to play at selected casinos. What does Vietnam have to do next for LVS to develop an IR there?
GT: Well, we’ve said that there are a few thresholds that we need to be resolved to make a substantial investment there but certainly location was one. The accessibility of the casino, subject to restrictions, by Vietnamese was another. Investment parameters, minimum investment would be another example. I think they are making substantial progress on moving toward implementing measures that could attract a substantial investment.
There is the pilot program for Vietnamese to be allowed into [selected] casinos. We think this is a step in the right direction, and we are hopeful that it will be managed properly.
We are in a position where, if the circumstances were right, we could move forward with an investment very quickly. But we are waiting to see how the regulations are developed there and how the evolves.
MC: LVS has also repeatedly expressed interest in building an integrated resort in South Korea. Are you watching what happens with Korea’s first IR, Paradise City at Incheon, which opened in April?
GT: We’re watching the new IR very closely and we are very interested in Korea. But again, it is one of those markets where we think we could do well and we could bring to the market some desperately needed infrastructures and certain amenities and attractions that are lacking in that market that drive substantial tourism growth. But the legislative process hasn’t gotten to a point yet where we could invest in that market.
I am aware of the opening of the new project in Incheon. I haven’t been there yet myself and am hoping to go there really soon and see it, but that was not an we pursued. One of our threshold issues there is access for Koreans, subject to certain material restrictions, and that is still not allowed, so we won’t be able to progress further until that issue is satisfied.
MC: News of Las Vegas Sands’ interest in Thailand perked up again last year. Does LVS still find Thailand attractive?
GT: We do and we’ve taken a close, hard look at that location. Right now is a fairly sensitive time for various types of issues with the passing of the King less than a year ago. We understand Thailand remains in a state period of mourning, we are respectful of that and we are sensitive to these local types of issues.
That being said, we have expressed our strong interest in a project in Bangkok and we’ve done a considerable amount of work to educate ourselves and to put together a potential plan for that market. You know, we are patient and our interest remains strong there, but we don’t have any specific timetable.
MC: LVS would only consider Bangkok?
GT: Well, as I was mentioning before, our business model works in the main cities because we need access to the major international airports and it needs to be in a location that is a center for commercial activity, a hub for financial transactions. We think that Bangkok would be an ideal place for us.
MC: Queensland rejected an IR proposal last month for a second resort on the Gold Coast but has stated it is still open to issuing an IR license? Is LVS interested in that market or elsewhere in Australia?
GT: That’s not a market we are looking at. It’s really not on our radar at this point. We’ll continue to focus on some of the markets in Asia instead.