{"id":3008,"date":"2010-04-30T15:02:00","date_gmt":"2010-04-30T23:02:00","guid":{"rendered":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/?p=3008"},"modified":"2018-03-12T08:59:26","modified_gmt":"2018-03-12T16:59:26","slug":"sheldons-smokin-something","status":"publish","type":"post","link":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/sheldons-smokin-something\/","title":{"rendered":"Sheldon’s smokin’ (something)"},"content":{"rendered":"

\"\"If any other gaming CEO than Sheldon Adelson<\/strong> opened the most expensive casino ever ($5.5 billion) and projected it would recoup its tab in five years — requiring a return on investment well above 20% when you take operating costs into account — Wall Street <\/strong>analysts would be rushing the phones to put “sell” orders on the stock.<\/p>\n

Yet when the Las Vegas Sands<\/strong> CEO predicts a $1 billion or more annual profit<\/em> on mega-expensive megaresort Marina Bay Sands<\/strong>, nobody bats an eyelid. Then again, there was nary a peep of skepticism when Sheldon forecast 17% ROI for Sands Bethlehem<\/strong>, despite its unfinished condition and runaway cost. Its actual return has been in the low single digits and the company says the $740 million (and counting) project is losing money.<\/p>\n

Analyst projections for Marina Bay run the gamut from a conservative 5% ROI to an Adelson-like 14%<\/a>. Despite various cautionary notes (like the fact that only 10% of Marina Bay’s “shoppes” and a quarter of its hotel rooms are open), Adelson responded with cloud of platitudinous blather about the property being a “grand slam home run.” Yes, he made a profit within a year of opening Sands Macao<\/strong> … on a property built at 1\/20th the cost of his pharaoh’s monument in Singapore.<\/p>\n

His executives don’t even know how much<\/a> of Marina Bay’s revenue will be derived from the casino. Maybe it will be 30%, maybe 70% or maybe — as Adelson astutely predicts — somewhere in the vast spectrum between. But a billion dollars in annual profit. This — this<\/em> — the Sands boys know for certain.<\/p>\n

Whatever they’re drinking, I’ll have some too. At least they’ve got a reasonable tax rate (12%) working in their favor, although those Malaysian visitors who are being bused in — from 130 different cities — had better be packing serious moolah.<\/p>\n

Adelson also said<\/strong> his long-mooted sales of shopping malls (or would those be “shoppes,” per Sands’ customary affectation?) and apartments in Macao<\/strong> would constitute a $12 billion bonanza<\/a>. He’s spun that platter so often and for so long it’s acquired golden oldie status. Then again, the only thing that’s cheap at Sands is talk.<\/p>\n

Who’da thunk?<\/strong> According to one bond analyst, The Rio<\/strong> might be worth as much as $650 million, if Harrah’s Entertainment<\/strong> is planning to unload it, having obtained Planet Hollywood<\/strong>. That’s using the old 7X-cash flow multiplier. Anything higher would be awfully generous when one considers that Harrah’s will strip the property of Penn & Teller<\/strong>, the World Series of Poker<\/strong>, its Total Rewards<\/strong> customer base and anything else of value that’s not nailed down.<\/p>\n

What you’re buying is a 20-year-old casino with some mighty nice high-roller villas, plus a lot of parking space that can be repurposed for expansion, once the market warrants it. One rumored bidder, Penn National Gaming<\/strong>, would probably balk at $650 million, despite nearly going off the deep end in pursuit of white elephant Fontainbleau<\/strong>. The other, Colony Capital<\/strong>, has a history both overpaying for assets (Station Casinos<\/strong>) or overleveraging them (the bottom-dwellers that constituted its Atlantic City<\/strong> “portfolio”), so its profligate ways give it front-runner status.<\/p>\n","protected":false},"excerpt":{"rendered":"

If any other gaming CEO than Sheldon Adelson opened the most expensive casino ever ($5.5 billion) and projected it would recoup its tab in five years — requiring a return on investment well above 20% when you take operating costs … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[23,3,4,59,7,22,62,53,69,95,6,12,108,57,38,132],"tags":[],"_links":{"self":[{"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts\/3008"}],"collection":[{"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/comments?post=3008"}],"version-history":[{"count":6,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts\/3008\/revisions"}],"predecessor-version":[{"id":21328,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts\/3008\/revisions\/21328"}],"wp:attachment":[{"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/media?parent=3008"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/categories?post=3008"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/tags?post=3008"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}