Today we conclude this epic overview with the two most prominent casino owners on the Strip, whose properties happen to be neighbors.
Sheldon Adelson’s Las Vegas Sands is the story of two companies – literally. There’s Las Vegas Sands, which seems to be having difficulty figuring out how to expand within the United States. Then there’s Sands China, the biggest player in the Macao market. The Macanese market has proven to be a double-edged sword: More money is wagered there than anywhere in the world by far, but Sands’ heavy exposure to Chinese play leaves it vulnerable to fluctuations in the Chinese economy. At the moment, Sands executives are hoping and praying that Macao’s economy has bottomed out after a year that saw record declines in gambling revenue. A crackdown on graft in Mainland China has chilled play in Macao, as have new restrictions on the country’s UnionPay currency-transfer system. Also, the Macao government has proven that it meant business when it capped the number of table games it would allot to new casinos. Since high-end baccarat play is the lifeblood of Macao, new casinos like Adelson’s forthcoming Parisian are built predicated on having hundreds more baccarat tables than they’re going to get.
Sands' CEO has always hedged his reliance upon VIP play with a heavy arsenal of retail and entertainment amenities geared to middle-class customers, as well as pitching his product to mass-market clientele. This strategy appears to have shielded Sands from the worst of the Macao meltdown. In the meantime, his mega-expensive Marina Bay Sands in Singapore continues to be mega-successful. When it opened, play was pretty evenly divided between Marina Bay Sands and Genting Group’s Resorts World Sentosa. But Adelson has steadily cut into Genting’s business to the point where Sands owns two-thirds of the market.
Stateside, Adelson has finally adopted red-headed stepchild Sands Bethlehem, a billion-dollar Pennsylvania casino he once called "a mistake" and tried to sell. However, it is consistently one of the top two performers in the Keystone State. The question for Adelson is where to expand next. After a couple of tries with the Florida Legislature to open the Sunshine State to casino resorts (including an outrageous proposal for a Sands-owned monopoly of five casino megaresorts), Adelson pulled his lobbyists from Florida and concentrated his efforts on Georgia – although he didn’t endear himself to Gov. Nathan Deal by dropping by the capital while Deal was out of state and parking his limousine in a space reserved for gubernatorial staffers.
The company has cooled on Texas but is showing flickers of interest in northern New Jersey, if voters remove Atlantic City’s monopoly on casino gambling. And when, in seven years, New York City becomes eligible for casino gambling, you can be sure that Adelson will pitch an integrated resort and convention facility for Manhattan. We wouldn’t expect anything less from him.
Outside of the casino biz, Adelson has made news through his secretive purchase of the Las Vegas Review-Journal. What he wants with Sin City’s paper of record remains to be seen, although it has already endorsed his favored presidential candidate Marco Rubio – twice, for good measure. He’s also proposing a $1.2 billion, NFL-size stadium for land owned by the University of Nevada-Las Vegas. Sheldon Adelson, however, hasn’t gotten the memo that publicly funded stadiums are an endangered species. He would only cover a relatively small part of the cost. The bulk of the money would be obtained by de-funding the Las Vegas Convention & Visitors Authority, a competitor that has long been a thorn in Adelson’s side.
Last but not least is Steve Wynn. Like Adelson, he’s enjoying a renaissance of business on the Las Vegas Strip that buffers Wynn Resorts from the ups and downs (mostly downs) of Macao. His latest revision of Wynn Las Vegas/Encore is Wynn Plaza, a retail mall that will take the place of a poker room and defunct Ferrari dealership. Wynn’s also trying to keep his new Macao project, Wynn Palace on track, although problems with the contractor have already forced postponement of its opening by three months. Wynn’s exasperation with the cap on new table games led him to lash out at the Chinese government in a vitriol-laced, third-quarter earnings call. This earned Wynn a lot of headlines but was definitely not the sort of thing that would endear Wynn to the mandarins of Peking. (By contrast, when asked about the table-game caps, Sheldon Adelson was the essence of deference and diplomacy.)
Since then, while Wynn has been eating his words at every opportunity, earnestly mending fences with China, he won another verbal battle, this one with Boston Mayor Martin Walsh, who tried for months to derail Wynn Everett, the megaresort project sitting just outside Boston city limits. Despite the prospect of 4,000 construction jobs, 4,000 permanent jobs, and $1.7 billion investment, Walsh just didn’t think he’d gotten his pound of flesh, and he went after both Wynn and the Massachusetts Gaming Commission, trying to reroute the casino concession to his homeboys at Suffolk Downs. But after a Walsh lawsuit was basically laughed out of court, Hizzoner saw the merits of negotiating with Wynn. The two sides cut a deal that will see Boston get $400,000 a year more from Wynn Everett, whose development can now move forward free of hassles.
Since Wynn is averse to debt financing, it looks like Wynn Palace and Wynn Everett will be enough to keep him busy for the time being. There was a rumor that he was interested in a north New Jersey casino but so far it’s been nothing more than loose talk. Like Adelson, we expect Wynn to have his eye on the Big Apple, instead.
