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Events


IAGA SUMMIT Macau 2018


Raymond Lin, Partner, Latham & Watkins


Raymond Lin is a New York based partner in the corporate department of Latham & Watkins LLP. For over 30 years, he has represented investment banks, private equity firms, developers and operators in the financing, development or acquisition of over 50 gaming projects in the United States, Asia and the Caribbean, including with respect to the Venetian resorts in Las Vegas and Macau, the Mohegan Sun, the Seminole Hard Rock casinos and numerous other Native American properties, the properties of Caesars Growth Partners and projects involving internet and fantasy sports gaming. He is a graduate of Columbia Law School where he was an editor of the Law Review and is currently a member of the Board of Visitors.


This article is co-authored by Ben- Moshe. Mr. is a partner in the San Diego office of Latham & Watkins LLP. He has represented lenders and borrowers in gaming finance transactions for nearly 25 years, including many of the most innovative transactions in Las Vegas (including the Venetian and Wynn Las Vegas), Native American trust lands and Asia.


Even in well-developed gaming jurisdictions, the landscape is littered with expensive projects such as the Cosmopolitan in Las Vegas or the Revel in Atlantic City that resulted in massive losses to their initial developers and lenders, while requiring enormous amounts of additional capital to reach completion.


P80 NEWSWIRE / INTERACTIVE /MARKET DATA


The Challenges of Financing in Emerging Asian Markets


Asia continues to be at the forefront of new gaming market opportunities with projects proposed and currently under development in Vietnam, Cambodia, the Philippines and beyond. What are the leading financing methods being pursued by operators in new markets such as these where regulatory structures aren’t as well established?


Financing new gaming projects in emerging gaming markets is one of the most challenging and difficult exercises in the financial world. Even in well- developed gaming jurisdictions, the landscape is littered with expensive projects such as the Cosmopolitan in Las Vegas or the Revel in Atlantic City that resulted in massive losses to their initial developers and lenders, while requiring enormous amounts of additional capital to reach completion. Fortunately, in our more than 50 years of collective experience in representing lenders and developers of casino resort projects, the vast majority of them succeeded far beyond initial expectations — including the Sands Macao and the Venetian in Macau; the Seminole Hard Rock casinos in Florida; the Venetian, the Palazzo, the Wynn and the Encore in Las Vegas; the Mohegan Sun in Connecticut; the Grand Casinos on the Gulf Coast of Mississippi and the Showboat in Atlantic City.


But what makes financing gaming projects in emerging markets such a gamble? Te answer largely


comes down to the risks we call the ‘Tree Ds’: Development, Demand and Disrepute.


DEVELOPMENT Te first risk is whether the project is actually


completed and opened. Most new casino resort projects are built on a project finance basis, which means that a fixed amount of capital is devoted to the project and the owner is not required to add additional capital if funds fall short of the amount required to complete and open the project. Development poses a particular risk for casino resort projects because they are all uniquely designed and some are among the most costly buildings in the world; for example, the Sands Marina in Singapore is reportedly the most expensive building ever built. Our understanding is that the initial estimates for a Tokyo resort facility would dwarf the Sands Marina in cost.


Predicting construction and development costs is often an art rather than a science. While many casino development projects claim to benefit from a


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