Inside Asian Gaming

10 Venetian Bind A year on from opening its flagship Macau casino, Las Vegas Sands Corp faces challenges—all of them surmountable “Annual income £20, annual expenditure £19 19s 6d, result – happiness. “Annual income £20, annual expenditure £20 0s 6d, result – misery.” Mr Micawber, Charles Dickens M isery is too strong a word to describe the growing pains that Las Vegas Sands Corp (LVS) has been experiencing in Macau and Singapore. Building some of the most ambitious and costly tourism infrastructure in history was always going to create challenges somewhere along the line. As The Venetian Macao marks its first anniversary of operation, it seems an appropriate moment to take stock of progress not only on the concrete and steel of The Cotai Strip™ itself, but also of the business ideas that lie behind its creation. LVS founder and Chairman Sheldon Adelson was reported recently as saying that when he first came to Macau and was shown Cotai as a potential development site, he thought it might be a ruse. “At first, I thought it was political exile,” he was quoted as saying. “I thought Stanley Ho had such influence that he got me off the [Macau] peninsula because that’s where he believes the centre of everything is. All I was hoping was that I could get a location in which I could really do something.” Few doubt that Mr Adelson is “really doing something” on Cotai. At the latest estimate, LVS is committed to investing US$12 billion on its trademarked Cotai Strip to build 14 casino facilities and 20,000 hotel rooms. The Marina Bay Sands in Singapore, due to open in the autumn of 2009,is costing a further US$4 billion at last estimate. The products LVS has already delivered into the Macau market—The Sands Macao and the Venetian Macao—contributed to an 81% surge in LVS operating revenue in Q2 2008.The challenge is that the inevitable financial growing pains associated with such a huge corporate expansion have been exacerbated by rapid rises in operating costs. The company recorded a net loss of US$8.8 million on revenue of US$1.1 billion in Q2 2008.Tough luck on timing has played a part as commodity inflation and a credit crunch grip the global economy. The Marina Bay Sands in Singapore, due to open in the autumn of 2009, is costing a further US$4 billion at last estimate