Interview SHELDON ADELSON
During the G2E trade show in October, Las Vegas Sands Chairman, Sheldon Adelson, gave a fascinating keynote address. As controversial as ever regarding his views on online gaming, his insight into the construction of The Venetian Macau, Marina Bay Sands in Singapore and his overall view of the Macau market made this a must-view event.
“I started out in gaming via the trade show business, having created a show called COMDEX - the Computer Dealers Expo. It grew exponentially, quadrupling from first year to the second year (COMDEX was launched in 1979 and thrived throughout the 80s and 90s before being sold to SoftBank Corp of Japan for US$86m in 1995). The market was exploding and I needed to find a piece of land - as the convention authorities work very slowly. I wanted to build my own exhibition centre and was looking for a property with an adjacent facility to build meeting rooms. I needed a hotel with enough land to build what would become the largest convention cen- tre in the country and the largest privately owned build- ing. In order to do that, I had to apply for a gaming licence and everything that went along with it (Adelson and his partners purchased the Sands Hotel and Casino in Vegas in 1988. The following year he constructed the Sands Expo and Convention Center). So it was more about getting the land for the convention business than getting into the gaming business, which has sort of reversed itself since then.
I’ve been in business for 69 years, since I was 12. After my first dozen businesses, I realised that in order to get ahead I had to do business differently from the way it was being done. I came to learn that if you do things dif- ferently success will follow you, like a shadow, and you can’t get rid of it. People doubted me, but they just didn’t do the things that I did. I find out what an industry does, identify how to do things differently and be enough of a risk taker to do those things differently (Adelson, while honeymooning in Venice in 1991, found the inspiration for his Las Vegas mega resort hotel. He razed the Sands and spent US$1.5bn to construct The Venetian, which opened May 3, 1999). Nobody thought to do things like me, they’re just satisfied with the status quo - while I’m never satisfied with the status quo.
My vision for Macau If you look at Las Vegas and took a series of helicopters with big slings, picked up the Strip and brought it to Asia - could you succeed? The answer, to me, was yes. Steve Wynn and Caesars have made a career of bringing Asian players to the Vegas Strip, and they did very well at it. It’s clear that Asian people love to challenge luck. So while I couldn’t just pick up Vegas, I could reproduce the Strip the same over there. When the government first gave me the piece of land, Macau was comprised of a peninsula and two very small islands a short distance away. The peninsula is connected to one island and a causeway connects to the other - the rest is all water, a bay and a swamp. It was ideal - flat, no hills - to repro- duce the strip.
When the Macau government sent me out there - they said it would be a permanent site after the Sands Macau location (The one million square-foot Sands Macau became the People’s Republic of China’s first Las Vegas-style casino when it opened in May 2004. Adelson recovered his initial US$265m investment in one year - and since opening Sands Macau, his person-
nel wealth has multiplied 14x. Today, Sheldon Adelson’s net worth is calculated to be US$37bn). So I went out and looked at it and I couldn’t find the land… I went back to the government and asked if I was being exiled? They didn’t want a guy to come out there and get into the peninsula. There were just two or three small casinos on Cotai - but when I went out there I asked where is the land? They told me it was under the water and I asked if I was expected to get a pump? No, but you bring in sand and you fill it in they said.
My vision was to create Asia’s Las Vegas, but it wasn’t long enough. End to end it was only two and a half kilo- metres. I met with an architectural land planning firm and I laid out what turned out to be 20 lots; on the Vegas Strip there are 25 mega-resorts, so 20 would be enough.
I got into a pissing match with Stanley Ho. He thought I was
going to fail - while I thought he was going to fail. We were going to put the peninsula out of
business - just like downtown Vegas compared to the Strip. And I told him that if you can’t stand the heat get out of the
kitchen. So he put on an apron and he cooked pork and rice.
I laid it out and gave it to the government. They thought it was great, of course, because they thought it would fail. I also got into a pissing match with Stanley Ho. He thought I was going to fail too - while I thought he was going to fail. We were going to put the peninsula out of business - just like downtown Las Vegas compared to the Strip. So we went back and forth. And I told him that if you can’t stand the heat get out of the kitchen. So he put on an apron and he cooked pork and rice, and he gave pork and rice to his customers - it was a pretty funny scene.
So I started to build. One of our competitors, one of the guys with whom we were originally supposed to share a licence, Galaxy (Francis Lui) came up to me while we were still talking - he doesn’t want to talk to me any more - and I said when are you going to start? We each got the same amount of land, 115 acres each. I picked the land on the Strip and he picked the land at the back, to the west of the Strip. I said I don’t see any construction going on. We opened in 2007, but in 2006 he said I’m not going to do that. First of all, he said, I don’t think you’re going to succeed, but I’m going to wait and let you take the risk to see whether or not you do succeed. If by some chance you do, then I’m going to build. So he lost
four years - and then he opened and that was Galaxy. Even after we opened he kept on stopping building. I’d say, all in all, he lost four to five years (The Venetian Macau was opened in August 2007 on the Cotai Strip for US$2.4bn. It is the sixth largest building in the world).
In relation to Macau today, everything that I’ve seen happen in the last 13 years, from when first exposed to Macau has been cyclical - like gambling. You start off on a baseline, sometime you’re up, sometime you’re down. When China limited the number of times a Chinese citi- zen could go to Macau, from once a month to once every three months, they never announced the decision and they never announced that it was over. This time, it was quite surprising to me that they announced within the last couple of days that they have achieved their goals in this corruption crackdown and they’re going to let up on it. It surprised the heck out of me. I think the players that want to stay below the radar, whether they are cor- rupt or not - there is a lot of money involved and don’t want to send a message to the government that they might be corrupt. I think it will take a couple more months and then they’ll come and play more.
What irritates me is that people still only look at the short-term. My friend Steve Wynn said he doesn’t want to be judged on a quarter by quarter basis - this is a long-term investment. They are judging MOP win or loss per day for the last week. Pretty soon they’re going to be talking about MOP win or loss per hour. Then it will be per minute. This is ridiculous. We are in business for the long-term. We’ve spent 9-10-11 billion dollars, who’s counting? in Macau, and I’m under construction with another property and have asked for permission for yet another that’s going to be non-gaming without tables. I didn’t invest that money so that I could have one or two weeks growth - I’ve invested long-term. And I don’t think the cultural practices of Asian people is going to change after thousands of years. If there’s shortfall right now it’s cyclical and will come right back. I can’t imagine, even taking into account the recent announcement, that it will last another six to eight months.
The mass market is growing, the Chinese government has spent tens of billions of dollars to build transporta- tion infrastructure and they’re coming through with high speed trains. We have gone to the outer regions of Guandong province and the adjacent provinces and now we are penetrating with this very high speed, very cost- ly, infrastructure. When the bridge is finished in less than 24 months, the Hong Kong, Macau Zhuhai bridge, Macau will also will have another ready-made airport, which will be almost as fast to get in and out of Macau as it is with the present Macau airport. If you leave the Hong Kong airport and turn left it’s 20 minutes to get to Macau; if you turn right it’s 45 minutes to drive down- town to get to Hong Kong island. You’ve got to ask - do you want to go to Hong Kong island or go straight to Macau? We are going to have another airport to service 100 commercial airlines servicing 180 cities, servicing some 50+ million people. The combination of road, rail and air infrastructure is going to reach further and fur- ther into the eastern part of China - and as we do, these people will come knowing that they can’t come every Monday, Tuesday and Thursday, these people will come every three, six months or annually, but they are going to bring a much higher gaming budget with them. So this
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