Sands to Add $2.5 Billion Macau Resort in Biggest Casino Hub
Billionaire Sheldon Adelson’s casino operator Las Vegas Sands Corp. (LVS) plans to invest at least $2.5 billion to build its fifth resort in Macau, where gambling revenue is forecast to rise to $100 billion by 2020.
The company will fund the casino complex, to be called The Parisian, with $1.5 billion in bank loans and $900 million to $1 billion in cash, Sands Chief Operating Officer Michael Leven said at a press briefing in the territory today. The resort will include family-oriented facilities to lure middle-class gamblers from China, the company said in July.
The Parisian will have a replica of the Eiffel Tower and will boost the company’s presence on Cotai, a strip of reclaimed land where rivals including SJM Holdings Ltd. (880) and MGM China Holdings Ltd. (2282) await land grants or government approvals to build. A new rail line linking Macau to Guangzhou and relaxation of visa requirements will help drive up revenue, especially for resorts that target middle-class gamblers instead of the high- rollers, where demand growth has decelerated, analysts at Citigroup Inc. said.
“Growth within the mass-market segment, particularly on Cotai, has remained exceptionally strong,” Citigroup analysts led by Anil Daswani wrote in a Sept. 19 note to clients. “We continue to favor the mass-focused Cotai operators.”
The Las Vegas-based casino operator plans to begin construction of the project in the world’s largest gambling hub in 60 days and the resort will have 3,000 hotel rooms, Adelson said at a briefing in Macau today. Adelson, whose 70 percent stake in Sands China is worth about HK$162 billion ($21 billion), opened the first phase of his Cotai Central resort in April.
Sands China Ltd. (1928), the company’s Hong-Kong listed Macau operator, was granted a three-year extension in July on the permit to build its new property in the city after Sands Macau, The Venetian Macau, The Four Seasons Hotel Macau and Sands Cotai Central. The company will pay a penalty of 900,000 patacas ($112,700) for the delay in developing the so-called Parcel 3 plot, where it will build the newest resort.
CLSA Ltd. forecast gambling revenue in Macau will jump to $100 billion by 2020.
Adelson said today Sands hopes to build casinos in Korea, Japan and Vietnam as well as Taipei or Kaohsiung in Taiwan should governments in those countries grant permits.
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