{"id":23838,"date":"2019-04-03T07:06:04","date_gmt":"2019-04-03T15:06:04","guid":{"rendered":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/?p=23838"},"modified":"2020-10-19T06:55:14","modified_gmt":"2020-10-19T14:55:14","slug":"adelsons-big-trade-off-nation-bans-casinos-vegas-hotel-reopens","status":"publish","type":"post","link":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/adelsons-big-trade-off-nation-bans-casinos-vegas-hotel-reopens\/","title":{"rendered":"Adelson’s big trade-off; Nation bans casinos; Vegas hotel reopens"},"content":{"rendered":"

Not having gotten his way regarding a Las Vegas<\/strong> stadium, Sheldon Adelson<\/strong> turned to the government of Singapore<\/strong> and can now announce \"\"a major success. He will build a new hotel, a “state of the art” arena and additional convention space, all to the tune of $3.3 billion. In return, Las Vegas Sands<\/strong> will assent to paying higher taxes and Singaporean casino patrons will be assessed a costlier entry fee. “The expansion will enable to LVS to grow via new investment in an attractive market, albeit with increased costs,” wrote JP Morgan<\/strong> analyst Joseph Greff<\/strong>.<\/p>\n

As part of the deal, Sands will pay a one-time $1.1 billion to City Hall, presumably for the needed acreage. Greff estimates that the expansion could be providing a 15% return on investment in five years’ \"\"time. Since his concession in Singapore will not be up for renewal until 2030, Adelson can expand with confidence. The projected hotel will have 1,000 rooms, while the stadium will be on the small side, seating 15,000. In return, Adelson gets extra casino square footage, 500 slot machines now and another 500 when the new tower opens. Sands has to be relieved that dealmaking is so much easier in Singapore than in Macao<\/strong>, especially when the Sands\/Genting<\/strong> duopoly has been extended through 2030.<\/p>\n

The entry fee for locals will escalate from $74 to $111, effective immediately. If you want a year-long pass, it’s going from $1,478 to \"\"$2,217. That’s a pretty pricey privilege. As for the tax hike, it’s rather elaborate, so I’ll let Greff explain it: “For premium mass, the current 5% tax rate will increase to 8% on [gross gaming revenue]\u00a0up to $2.4b and 12% on any additional GGR; for mass, the current 15% tax rate will increase to 18% on GGR up to $3.1b and be 22% on any additional GGR.” Adelson is not one to throw good money after bad, so if he’s paying so much additional money in taxes and development costs you can be sure he’s run the numbers and likes what he sees.<\/p>\n

* In the past year, Las Vegas has seen two fatalities in casino-related shootings. No one has suggested that the fundamental course of business be changed. Ditto states like Ohio<\/strong> and Florida<\/strong> that are cracking down on black-market casinos. There’s nothing like the \"\"underlying panic in Kosovo<\/strong>, where two robbery-related deaths in casino shootings have moved Prime Minister\u00a0Ramush Haradinaj<\/strong> to ban casino gambling for 10 years<\/a>. In a typical double-standard, the state-owned lottery will remain open. One of Haradinaj’s provocations was a set of raids on storefronts in which over 100 slot machines were confiscated.\u00a0\u201cIt is total chaos, a total abuse and it is good that we are stopping this,\u201d Haradinaj proclaimed. His actions will throw 4,000 people out of work in a country that is dirt-poor and has 33% unemployment. The Kosovo government’s action strikes as us\u2014if you’ll pardon the term\u2014overkill.<\/p>\n