“I don’t think we’re counting on them carrying the ball like we thought they would,” is the bottom line of a Wall Street Journal story on Las Vegas Sands‘ failure to complete $743 million Sands Bethlehem. Even though he once spouted cash-flow projections the begged credulity, CEO Sheldon Adelson now says it was a big mistake and he wouldn’t do it again. In characterically Adelsonian buck-passing form, he blames the overbudgeting of the casino on (conveniently) departed subordinates. At least Steve Wynn owns his mistakes; Adelson affects quasi-papal infallibility.
As money ran short, Sands pulled the plug on a promised hotel, pouring all the funds and workmen into completion of the slot house. That calculation has proven short-sighted. With Sands Bethelehem sitting at sixth place among nine Pennsylvania casinos, the absence of on-property lodgings is getting some of the blame for the casino’s lackluster performance. (Which wouldn’t be so disappointing if Sands hadn’t spent Strip-sized bucks on Bethlehem … but that’s academic.)
As expected, Sands got the 89 table games it wanted, after telling regulators the hotel would finally open a year from May — only two years behind schedule. As for the event center and retail mall that Sands is obligated to build, they’re off in some misty distance when “the market improves.” Sand President Michael Leven really earned his $2 million/year salary, judging by the platter-load of crow he had to eat, announcing the new timetable for the hotel after posturing to investors he would not even think about new capital expenditures until next year. Even so, the company is still so strapped it may to be bring aboard a development partner to get the rest of Sands Bethlehem finished.
A miracle. That’s what it may take to get another state-owned casino open in Kansas. Barring divine intervention, the next best thing is if Gov. Mark Parkinson grants yet another extension to Lyle Berman‘s slow-moving casino proposal, Chisholm Creek. Fearing competition from a nearby tribal casino, Lakes Entertainment wants to downsize the $225 million project, moving it more in the direction of a grind joint. Expert witness Bill Eadington disagreed, saying that greater amenities were needed in order to prevail competitively. “We’re the ones in the trenches,” responded Lakes prexy Tim Cope (whose company is also pouting about a racino proposal that’s before the Legislature) but Eadington is rarely wrong.
The reason why Sands and Adelson is in a pickle may be because the Venetian Macau is not doing well now. I was in Macau last week and check out the Venetian there. It surprises me that it is doing less business now than when I was there 1 year ago.
[…] the Lehigh Valley Morning Call, Adelson spent $800 million on the place … but the price tag had hit $743 million long before the hotel was completed, the outlet mall built, etc. The company carries the property […]