Interview SHELDON ADELSON
01 Sheldon Adelson started his business career at the age of 12, when he borrowed two hundred dollars from his uncle and purchased a license to sell newspapers in Boston. At the age of 16, he had started a candy-vending-machine business. He attended trade school to become a court reporter and subsequently joined the army. Adelson also attended City College of New York. He established a business selling toiletry kits after being discharged from the army then started another business named De-Ice-It, which sold a chemical spray to help clear frozen windscreens. In the 1960s, he started a charter tours business. He was a millionaire,in his 30s, though he had built and lost a fortune twice. Over the course of his business career, Mr. Adelson has created over 50 of his own businesses.
scale down my MICE-based business model. I wouldn’t have condos to sell in order to get back the money spending on core assets. And the fact that we’re looking for larger in-city markets, we decided against going there. There are 10 to 12 competitors and Steve will do much better than all the rest because they’re just put- ting up plain casinos. He’ll put up amenities, more inte- grated resort and do a comprehensive job. The other guys won’t accomplish that.
Declined to enter Atlantic City in the 80s. When I was a kid, my uncle had a wheel and I worked in Atlantic City. I used to vacation there when I was stationed in the army in New York city where I was located for two years. I had a feeling that everybody has to come to Atlantic City, there is no existing local market. Even Steve got out many years ago after he just got in it. My view was that one day the neighbouring states would legalise gaming a suck out all the business that Atlantic City is siphoning from those states. It has proven itself out. I would be interested in Meadowlands, but it all
There is only room for expansion now in the US in Texas and possibly Tampa , South Florida,
since my model has to put me in a city. I could scale down in part in a suburban area, like in
Bethlehem, which is one of the most profitable EBITDA casinos right now in all the 100s of casinos in local markets.
but wherever we build anywhere else, I believe in the MICE business. There has to be a gaming component as you lose money operating places like that. You can;t pay back the money running exhibitions and convention centres. You have to have something to subsidise it. There are various parts of a MICE resort that will lose money - museums, arenas, exhibition centres, congress centre, meetings and ballrooms - you need a subsidy to put up enough critical mass to make it MICE focused.
Declined to bid on a licence in Massachusetts, as I didn’t think I could scale down. My business model of an Integrated Resort works best in the middle or edge of a city as you need the tourism infrastructure to support it. We need restaurants, other hotels, local transportation, national/international airports. There was no downtown location available in Boston at which my MICE-based business model could work, and besides I saw the possi- bility of New Hampshire having a couple more, Connecticut having a couple, Rhode Island having a couple, Maine having some, two or three, and New York. Massachusetts is only 120 miles wide and I just saw there was too much competition. The combination of no land downtown from Boston to do this and as many as 10-12 casinos within 100 miles, my friend Steve does a better job of creating a mystique about a new property than I do. He could do it better than we can. I’d have to
depends upon what the government of New Jersey wants. It’s a two-edge sword. You could go in there and spend billions to wake up one day and the Governor of New York says that they are sucking all this money up in Meadowlands and have to open up in NYC. It’s not about being equidistant between the casinos, it’s about travel time. So even though it may be three miles away, it can take an hour to get there. It’s about travel time not the distance. Could it for 5-6 years provide a return on capital? Yes - and a good one.
There is only room for expansion now in the US in Texas and possibly Tampa , South Florida, since my model has to put me in a city. I could scale down in part in a subur- ban area, like in Bethlehem, which is one of the most profitable EBITDA casinos right now in all the 100s of casinos in local markets. However, it’s very difficult to find people capable of running large properties. Typically our properties are a minimum 3,000 rooms; employing someone as a GM from a 300 room property, is totally different. The scale is totally different.
Opposition to iGaming When you look at a state or jurisdiction considers legal- ising gaming. If you take Massachusetts, I was born there and still have a home there. How many years have they been talking about this - they have come up with
three casinos in the state for six million people - they didn’t argue that they’d build six million casinos. But what are they doing - they are opening from a cell- phone, everyone with a cell, everyone underage, young person, take an iPad to go online. Talking about a gener- ation is a state, it is not a state’s rights issue as propo- nents would have you believe. The internet is in every home, there is no place that it doesn’t exist. A cross-bor- der issue. Argument that you can regulate it - I’ve asked regulators here in Nevada to tell me one regulation that we live by in land-based gaming that you can enforce on internet gaming and they couldn’t come up with one. If I register on my phone and my child plays on my account, how do you enforce against that? We have over a trillion dollars of student debt in this country - I know kids in college of age - I made $300 playing poker. What is the purpose of putting a casino in the hands of every single person in the United States? If the Federal government would enforce the law, reinstate the wire act and the Attorney General would enforce the law that they are supposed to enforce against the foreign opera- tors to close them down. They did it on Black Friday - PokerStars and Full Tilt picked up as criminals, they set- tled with the government and are trying to get back into New Jersey. Look, they are essentially law breakers, they are the same organisation, just a different share- holder.
I come form a poor family, the slums were crowded ten- ements. My father had a sixth grade education in Lithuania and left there at 12 years old to come to the States. He had no skills, didn’t speak the language. He was poor, but liked to gamble. He went to Suffolk Downs, having got a job as a cab driver, and he liked to go and gamble. Can;t say he was addicted, couldn’t access at the time. Like to go to Florida tracks when he retired. They would bet on any number they could find, sweepstakes, bet on it daily. I saw the cost of a family losing money on gaming. You can’t know you’re cus- tomer on the internet. The market cap of my company exceeds that of all the other US companies combined. To me it is a matter of principle, raised in a family that suf- fered from scourges of uncontrolled gambling, raising two teenage kids, easily get addicted. Plays all the games on TV - kids not going to find a way around user ID. It’s not a good reason to say why not legalise it because they are doing it anyway. Why don’t we legalise prostitution or cocaine if we’re doing it anyway? Simply because they are being done anyway and you want to legalise it - it’s ridiculous. You could legalise all the vices that there are. There is no protection and no reason to do this. Why are we doing this? Because one of our colleagues in the industry has a brand that they think will save their business… it isn’t going to happen.
It will take years to build it as we’ve seen in Nevada, Delaware and New Jersey. They took in several million dollars a month, while we take that amount in minutes in our casinos, particularly the ones Steve and I operate in Macau. In the seven to eight months they’ve been in business they’ve grossed some $20m, some small amount like that. I see no benefit, and coming from a working class family, people exploited and abused the most. Don’t want them to get abused as I see the faces of my parents. We can make money by having someone come into the casino - I don’t see any compelling reason to put an electronic casino in 318 million hands? So that one of two casino groups can bail themselves out?”
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