Las Vegas Sands launches $4.4 billion casino-resort in Macau
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Beyond the Sun
Macau — U.S. billionaire Sheldon Adelson’s Macau casino operator on Wednesday launched its long-delayed fourth resort, a $4.4 billion complex that is its latest bet on continued strong growth in the world’s biggest gambling market.
Sands China Ltd. executives opened the doors to the Sands Cotai Central following a traditional Chinese dragon dance, high-wire tightrope performance and the unveiling of a 2,500 kilogram (5,500 pound) bronze and gold “God of Fortune” statue. Completion was delayed several years by the global financial crisis and worker shortages.
People started lining up to get in about five hours before the grand opening, security guards said, and the queue snaked around the side of the building by the time the doors opened.
The resort will open in stages. The first phase has 340 gaming tables and 40 VIP rooms for high-rollers. Another 200 tables will be added later this year. Paintings of snowcapped peaks on the casino floor and fake boulders in the shopping mall are aimed at evoking a Himalayan mountain theme.
It’s the 35th casino to open in Macau, the only place in China where casino gambling is legal. Macau’s gambling revenues rose 27 percent in the first three months of 2012, after rocketing 42 percent last year to $33.5 billion, more than five times the amount earned by Las Vegas Strip casinos. Growth has been powered by hordes of wealthy high-rolling gamblers from mainland China, who are estimated to account for more than two-thirds of total gambling revenue.
No more new casinos are expected to open until at least 2015 because of the time needed for government approval and construction.
Sands China’s next project will be a 3,600-room resort on a nearby plot for which it is currently seeking planning approval, said Adelson, chairman of both Sands China and U.S.-based parent Las Vegas Sands Corp.
“We hope to move some dirt around, (do some) compacting of the earth, and put in pilings by the end of this year,” with construction taking 24 to 30 months, said Adelson.
Sands’ rivals in Macau, including Wynn Resorts Ltd. and MGM Resorts International, are also waiting for government approval for projects they’re planning for the Cotai Strip, inspired by the famed Las Vegas Strip.
Cotai is an area of reclaimed swampland named for the two islands it connects, Coloane and Taipa. Adelson said the new casino sits on a site originally intended for a fireworks factory. Across the street are two other Sands properties, the Venetian Macao and Plaza Macao.
“The Cotai Central opening will fuel increased market share for Sands because it will be the last major opening in Macau for the next couple of years,” said Michael Paladino, an analyst at Fitch Ratings.
Sands is expected to benefit from growing numbers of middle-class visitors drawn to shopping and other non-gambling attractions at Cotai’s resorts. New transportation links to mainland China and Hong Kong, an hour away by ferry, will also help boost the so-called mass market, analysts said.
The new resort’s Holiday Inn, Sheraton and Conrad hotels will have a total of 5,800 rooms when they are fully open by next year. A fourth hotel tower is in the planning stages that will cost $500 million to $600 million, bringing total cost to $5 billion, Adelson said at a press conference ahead of the launch.
Construction on the project began five years ago but was frozen temporarily in late 2008 after financing dried up in the wake of the financial crisis. Government restrictions on foreign workers also delayed the opening date by three years, Adelson said.
Macau was a Portuguese colony for more than a century before it was returned to China in 1999. In 2002, the government ended a 40-year gambling monopoly, opening the way for foreign operators. The ensuing casino boom has transformed the city on the southern edge of China from a sleepy former colonial outpost into a glitzy and bustling tourist destination.
The wealthy mainland Chinese gamblers visiting Macau typically play in private rooms with money borrowed from so-called “junket operators,” who arrange gambling trips for high-rollers and collect debts when they return home. Revenue from Hong Kong-listed Sands China accounted for half of parent company Las Vegas Sands Corp.’s $9.4 billion revenue in 2011.