Inside Asian Gaming

inside asian gaming May 2014 18 a LVS executive on loan to Macau says. “Everyone we talked to in Macau was sure we weren’t going to succeed.” Behind the scenes, LVS took two other big risks that paid off, knowledgeable sources say. LVS enlisted more than two dozen banks to finance Sands Macao’s construction. If the project failed, it would have burned every potential lender for the company’s future Macau projects. But, since Sands Macao succeeded spectacularly, LVS had banks lining up to finance its Cotai ambitions. LVS reportedly went ahead with Sands Macao even though it didn’t have all the land issues resolved, banking on the government’s lack of experience and its desire for a fast opening. LVS and others would repeat the tactic, presenting a fait accompli and daring the government to undo it. One expert suggests LVS tried the same thing on Cotai with the Four Seasons apartments that remain unsold more than five years after their construction. Although the practice abated after the Ao Man Long scandal led to more structured government scrutiny of construction projects, the expert cites Louis XIII, a How LVS Almost Missed Out — Twice Sands Macao , which changed the character of Macau and reordered the global gaming hierarchy, twice came within grains of never being built, largely due to miscalculations by owner Las Vegas Sands Corp. In each case, a helping hand fromMacau authorities put the project back on track. LVS, through local subsidiary Venetian Macau Limited, didn’t submit a bid to the government’s Tender Commission when Macau offered three gaming licenses in November 2001. Instead, LVS followed Las Vegas Strip leader MGM Mirage and entered the competition as a management company for another bidder. LVS joined with Taiwan’s China Development Industrial Bank, which provided the US$500 million investment guarantee required for the bid and held all of the equity. LVS would receive a management fee Bending the rules kept Sheldon Adelson in the game and made Sands Macao happen By Muhammad Cohen plus an option to purchase 27.5% of the venture in three years. CDIB wasn’t just any Taiwan bank, it was a virtual arm of the Kuomintang, the governing party of the Chiang Kai Shek regime that had fought Mao Zedong’s Communists in a bitter civil war before it was driven from the mainland in 1949 and which still declares itself the legitimate government of China. Beijing, conversely, considers Taiwan a renegade province and remains committed to its reunification by whatever means necessary. CDIB’s chairman was the Kuomintang’s finance chief, and its directors included several generals sworn to fight China’s Communist Party. The Kuomintang had been banned in Macau since the 1960s, and 2001 was a particularly sensitive time to suggest bringing it back. Beijing had rejected Portugal’s offer to return Macau after Portugal’s From an architectural perspective, putting the casino on the second level rather than the ground floor broke design convention, but it was the only way architect Paul Steelman could make the plan work on the irregularly shaped site. Cover Story