Inside Asian Gaming

inside asian gaming September 2014 8 campaign he’s launched to secure a federal law to ban the sector. A prominent contingent of corporate Las Vegas wouldn’t be sad to see him go for the same reason. But he’s left them all disappointed. “As the supposed Mark Twain quote goes, the rumors of my demise have been greatly exaggerated,” he said in May. “I am as bullish about this company as I’ve ever been, and I have no plans of slowing down or passing the CEO title or job to anyone. … We have taken an important leadership position in the gaming and hospitality industry, and I plan on spending year after year building on that success.” He’s 81 now and as driven and combative as ever. On an earnings call last October, he stated that everyone agrees on LVS’ front-runner status in Japan. Not long after, he hosted a presentation for Hiroyuki Hosoda, a prominent member of Japan’s governing Liberal Democratic Party, which at the time was putting the finishing touches on the legalization bill it would introduce in the Diet in December. The presentation ( Reuters described it as “spirited”) included a flurry of slides and a scale model of what the company would erect on Tokyo Bay. At the end, according to Reuters ’ account, which came from a person it cited as familiar with the event, the lawmaker quietly mentioned that Tokyo’s is a unique culture and that planting a Marina Bay Sands-style mega-complex there might not work. It was a gentle nudge, one that perhaps speaks to a certain concern over the bluster and the go-it-alone attitude. As Reuters ’ source put it, “Many lawmakers in the casino group want Japanese companies to have the opportunity to invest. They want to make sure some money stays in Japan.” Mr Adelson hasn’t gone out of his way to dispel these concerns. He said at the CLSA news conference in February that while he was “willing to embrace Japanese partners,” he wonders how many share his appetite and capacity for risk. (Interestingly, he tossed out the name of Softbank founder and CEO Masayoshi Son as someone he’d be interested in tying up with. The Internet and telecommunications giant had no comment.) But to see him as some kind of bull in a china shop, as many have, is to miss the elaborate theater he’d conjured that day. It’s a thing that dances very close to the essence of the man. Forget the “$10 billion”. It wasn’t a real number. It was better. It was a magic number. He was saying that Las Vegas Sands has more than wherewithal— it has the willingness—to gamble on Tokyo at a level the others can’t, or won’t, to gift an iconic city with an icon worthy of it. He was, after all, in Tokyo, talking to the heirs of the largest metropolitan area in the world, the people who flourish in the enduring allure of it and the enormity of its wealth. He had the spotlight and it was no time for demurring. This was one epic ego to another. Heady stuff. That’s Sheldon Adelson. This time next year, Galaxy Entertainment Group will likely stand at the top of the casino revenue-share league table in Macau. As of Q2 2014, it actually stood third among the city’s six operators, with a 20.8% share of gaming revenue, behind Sands China’s 22.1% share. In first place was SJM with a 24.8% share, though that figure is inflated by revenue earned at 14 third-party-owned casinos to which it lends its license in exchange for a portion of the takings. Francis Lui Deputy Chairman Galaxy Entertainment Group Capacity is one of the major determinants of Macau market share. Following the May 2011 opening of its Galaxy Macau megaresort on Cotai, GEG moved ahead of Sands before the latter reclaimed its position a year later with the opening of Sands Cotai Central. But come mid-2015, GEG is set to not only once again overtake Sands, but probably also unseat SJM, with the unveiling of Phase 2 of Galaxy Macau, which is set to kick off the much-anticipated “second wave” of Cotai resort development. From there, the company, holder of the biggest land bank on Cotai at 2 million square meters, is set to continue adding capacity. “They’re the best-positioned for long-term growth and are focused on becoming the dominant player in Macau,” observes Union Gaming Research Macau’s Grant Govertsen. Although Macau’s gaming industry appears to be taking a breather right now, particularly in the VIP segment, few would bet against the mass market’s inexorable rise over the coming years and decades, especially following the impetus to renewed visitor growth promised by Cotai’s second wave. “If you believe in the China consumer story you have to believe in