Las Vegas Sands Said to Drop $35 Billion Spanish Casino ProposalSharon Smyth and Christopher Palmeri
Las Vegas Sands Corp., the casino operator controlled by billionaire Sheldon Adelson, will drop plans to build a $35 billion mega-resort in Spain, according to a person close to the company.
Las Vegas Sands said in February it had chosen Alcorcon, a suburb of Madrid, as the site for what would have been Europe’s largest resort. The project was to be carried out in phases over 10 to 12 years, according to the company. At completion, it would have included 12 casino resorts with 36,000 rooms.
The person, who asked not to be named because the decision isn’t public, didn’t provide a reason for Sands’ move. It ends the prospect of a large, long-term project that proponents said would help Spain improve its ailing economy. Adelson, who visited Madrid last month, sought assurances from Spanish officials that tax rates and other conditions wouldn’t change with future governments. He also sought exceptions to Spain’s ban on cigarette smoking in public places and limits on Internet gambling in the country.
Patricia Madrigal, a spokeswoman for Adelson's external public relations company in Spain, declined to comment, saying only that a statement would be made at 12 p.m. in Madrid.
Sands, the world’s largest casino company, fell 0.4 percent to $76.18 yesterday in New York. Shares of the Las Vegas-based company have gained 65 percent this year.
The pro-business People’s Party government in Spain had said the development, known as Eurovegas, would help the country recover from a five-year economic slump and improve its 26 percent unemployment rate.
Investors had expressed skepticism that the project would be economically viable. Adelson said on several occasions that the company would only pursue new developments that would produce 20 percent cash-on-cash returns.
Adelson, ranked 12th globally in the Bloomberg Billionaires Index with a fortune estimated at $36 billion, has also said he was interested in new casino resort opportunities in South Korea and Japan. The company, based in Las Vegas, draws most of its revenue from Asia, where it has resorts in Macau and Singapore.
The proposed first phase would have included four casino-resorts with 12,000 rooms, according to the company.
If all three phases were completed, the project would boost the region’s gross domestic product by 4.5 percent, according to estimates by Promomadrid, a government-owned company that tried to attract foreign investment to the Madrid area before being dissolved last year. It projected the development could create 164,000 jobs directly and a further 97,000 indirectly, or about half the number of unemployed in the region.