Issue 285
February 27 - March 5, 2006
Volume 6
page 1
 

This Issue

Gaming News

Sheraton and St. Regis Newest Names Added to Cotai Strip(TM)

Olympia Gaming on the move

Top two locals casino operators take different paths to prominence

Property investors get decisive on Macau casino boom

Borgata Hotel Casino and Spa Announces Details of The Water Club at Borgata

Show Time Kevin James entertains fans at The Mirage's Danny Gans Theatre.

Column Drooling Dogs, Pecking Pigeons, and Sanguine Slot Zealots by Alan Krigman.

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Sheraton and St. Regis Newest Names Added to Cotai Strip(TM)

Press Release

LAS VEGAS, Nevada - Las Vegas Sands Corp. (NYSE: LVS - News) and Starwood Hotels & Resorts Worldwide, Inc. (NYSE: HOT - News) announced today the addition of a new 1,200-room Sheraton hotel and a new 300-room St. Regis hotel to the Cotai Strip currently being developed by Las Vegas Sands in the People's Republic of China Special Administrative Region of Macao. The parties have entered into a non-binding letter of intent and expect to enter into binding definitive agreements before the end of the second quarter of 2006.

"Well known for its innovative spirit and stable of renowned brands, Starwood's participation furthers our goal of establishing the Cotai Strip as Asia's Las Vegas(TM)," said Sheldon G. Adelson, chairman and chief executive officer of Las Vegas Sands Corp. "With its significant global footprint and warm service culture, the Sheraton flag will be a comforting presence to travelers from all over Asia and beyond, while St. Regis' uncompromising luxury will serve as a beacon to the world's most elite jet setters."

The deal sets the stage for the development of a complex that will feature the 1,200-room Sheraton Macao and a 300-room St. Regis hotel, as well as 300 vacation suites, all operated by Starwood. In addition, the complex will also showcase retail, entertainment facilities and casino gaming which will be operated by Las Vegas Sands Corp.

"The Cotai Strip is a marquis project in the world's most dynamic market, and as we continue to aggressively develop hotels throughout China to secure our position as the country's number one operator of upscale and luxury properties, this was a great opportunity to fly our flags," said Steven J. Heyer, Starwood's chief executive officer. "We are excited to play a key role in the Strip's future success and look forward to doing our part to enhance the vitality of the area and attract leisure, business and convention travelers."

The Cotai Strip is a master planned development of resort and casino properties on Cotai, an area of reclaimed land between the islands of Taipa and Coloane in Macao. Las Vegas Sands has previously announced plans to develop other hotel projects including The Venetian Macao which is currently under construction, a Four Seasons hotel, a Shangri-La Hotel and a Traders hotel. Las Vegas Sands said it expects to make additional hotel, retail and entertainment announcements in the weeks and months ahead.

Starwood Hotels & Resorts has expanded its portfolio in China significantly in the last two years with the opening of Sheraton hotels in Haikou on Hainan Island and Dongguan, Le Meridien She Shan, Shanghai, and Four Points by Sheraton Shenzhen. In the past 24 months, the company has signed agreements to manage new hotels in Shenzhen, Xiamen, Beijing, Changsha, Haikou, Guiyang, Hong Kong, Dameisha, Urumqi, Changshu, Shanghai, Zhejiang, Zhongshan and Guangzhou. With these two latest hotel deals, Starwood now has 22 hotels and resorts under construction or development in China under its Westin, Sheraton, W Hotels, Le Meridien and Four Points by Sheraton brands.

Statements in this press release which are not historical facts are "forward looking" statements that are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Forward- looking statements involve a number of risks, uncertainties or other factors beyond the Company's control, which may cause material differences in actual results, performance or other expectations. These factors include, but are not limited to general economic conditions, competition, new ventures, government regulation, legalization of gaming, interest rates, future terrorist acts, insurance, and other factors detailed in the reports filed by Las Vegas Sands Corp. with the Securities and Exchange Commission.

Las Vegas Sands Corp.

Las Vegas Sands Corp. is a hotel, resort, and gaming and exhibition/convention company headquartered in Las Vegas, Nevada. The company owns The Venetian Resort Hotel Casino and the Sands Expo and Convention Center, where it hosts exhibitions and conventions, in Las Vegas and the Sands Macao in the People's Republic of China Special Administrative Region of Macao. The company is also developing additional casino hotel resort properties, including The Palazzo Resort Hotel Casino in Las Vegas and The Venetian Macao Casino Resort in Macao.

Starwood Hotels & Resorts

Starwood Hotels & Resorts Worldwide, Inc. is one of the leading hotel and leisure companies in the world with approximately 850 properties in more than 95 countries and 145,000 employees at its owned and managed properties. Starwood® Hotels is a fully integrated owner, operator and franchisor of hotels and resorts with the following internationally renowned brands: St. Regis®, The Luxury Collection®, Sheraton®, Westin®, Four Points® by Sheraton, W®, Le Meridien® and the recently announced Aloft(SM). Starwood Hotels also owns Starwood Vacation Ownership, Inc., one of the premier developers and operators of high quality vacation interval ownership resorts.


Olympia Gaming on the move

As Reported by Las Vegas Sun

LAS VEGAS, Nevada - Developer Garry Goett has more than doubled the number of hotel rooms he plans to build at his Southern Highlands resort, a project at the southernmost tip of the Las Vegas Valley that would ultimately have some 3,200 rooms and rival those on the Strip in size and scope.

Separately, Goett is moving ahead with plans to incorporate a casino into a future master-planned community in North Las Vegas despite concerns expressed by the city's mayor.

Goett made his name in Southern Nevada by developing Southern Highlands, a 2,750-acre master-planned community with at least 7,000 homes. But he plans to make a big mark on the casino business in the years to come as plans for multiple gaming properties take shape.

His gaming company affiliate, Olympia Gaming, originally received permission from the county to build as many as 610 rooms at the resort site, located near Southern Highlands at the northwest corner of Las Vegas Boulevard South and St. Rose Parkway.

The company received a special use permit from the County Commission on Wednesday to expand the resort, which would include 1,400 hotel rooms in its first phase. The project would eventually include a second hotel tower with 1,000 rooms and 800 condo-hotel units that would be owned and rented out.

Olympia expects to break ground this year on the first phase of the project, which would open by winter 2008.

In North Las Vegas, Goett recently purchased more than 2,600 acres to build a master-planned community similar in scope to Southern Highlands. The land would need to be zoned for gaming before a casino could be built there. The project could cost in the range of $700 million to build, Goett said.

North Las Vegas has four undeveloped sites already zoned for gaming, though two already are spoken for. Station Casinos plans to build a hotel called Aliante Station on one of those parcels, located within the Aliante master-planned community. Station is building the property in partnership with the real estate company owned by the Greenspun family, owners of the Las Vegas Sun.

And competitor Boyd Gaming Corp. expects to build another casino on a gaming zoned parcel at the southwest corner of Lamb Boulevard and Centennial Parkway.

North Las Vegas Mayor Michael Montandon said he objected to the idea of another casino beyond the four gaming-entitled sites.

"We're not looking at building a South Strip," Montandon said, referring to Goett's and other properties going up in unincorporated Clark County along Las Vegas Boulevard, south of Mandalay Bay. "That's basically an extension of the Strip. What we're talking about are neighborhood casinos."

Goett's land appears to meet the requirements of the 1997 state law that limits casino growth because it is far enough away from homes and schools, Montandon said.

Senate Bill 208 prevents developers from building casinos too close to homes, churches and schools.

Montandon said the city still retains the discretion to reject a casino that meets the initial burden of SB208. Land use experts agree with that assessment, saying that SB208 only prohibits jurisdictions from approving casinos where they are inappropriate. "There's no law anywhere that gives anyone an automatic right to build a casino," Montandon said.

Government shouldn't get into the business of determining how many casinos a city can support, Goett said.

"Let the market drive that decision," he said. "I don't think any area should turn down quality real estate development."

Goett, who paid $639 million for the land, said he expects to spend at least another $250 million on infrastructure, including a police station and fire station. That's more than any single company has paid up front to enter the North Las Vegas market, Goett said.

"If anyone was deserving of a gaming site in North Las Vegas it's us," Goett said. "We'd hope the council and the mayor will remain open-minded on this issue."

Montandon said he didn't have objections to Goett's project specifically and hasn't yet seen Olympia's plans for the site.

"We're in the process of negotiations" over the different elements of the project, including environmental concerns and street layout, Montandon said.

"Between the purchase of the land and infrastructure costs, they're approaching a billion dollars before they put the first house in - that's huge," the mayor said. "I don't remember that being a specific standard" for approving a casino, however, he said.

Goett said the decision to expand the Southern Highlands resort was based on a more detailed review of the resort's master plan, as well as additional research about future business prospects for the region.

"We were being cautious with our initial projections," he said. "We continue to do updated studies, and the results keep saying we need to have more and more rooms."

It has become commonplace for developers to upsize their projects based on a more bullish outlook once initial plans have been finalized, Goett said. Boyd Gaming, for example, decided to accelerate its expansion of the South Coast by building another 700 rooms onto the 650-room property, he said.

The Southern Highlands resort would be spread over 70 of the site's 100 acres, with the remaining 30 acres held for future development. By contrast, MGM Mirage and Boyd Gaming are each building more than 5,000 rooms - including multiple hotels, convention centers and shopping areas - on less than 70 acres on the Strip.

Goett said the resort would have a "spacious" feel and a country-club-like setting, as well as easy access from a planned upgrade to the existing Interstate 15 interchange at St. Rose Parkway.

The state Transportation Department is expected to complete the interchange by summer 2007.

"We're not going to be pushed in and squeezed in like some Strip projects are," Goett said.

The other amenities of the resort won't change with the hotel expansion, he said.

Goett envisions an upscale hybrid that would attract locals to its casino and drive-in tourists to its hotel.

"This will be a very attractive casino resort and spa that will address the multiple different segments of the market," Goett said. "We think it will do what the Strip is doing with a lot of their hotels, which is building for a lot of different customers."

The project will likely be most similar to a Green Valley Ranch or Red Rock resort, both Station Casinos properties that are more upscale properties, he said.

"I think our product will definitely be upscale," he said. "I think that's what people expect from Southern Highlands."

Goett said his company expects to develop future casinos without help from other gaming companies. Olympia Gaming has been approached by several gaming companies about potential partnerships.

Besides the Southern Highlands and proposed North Las Vegas projects, Goett also envisions building one and perhaps two casinos as part of a large, mixed-use project between Starr and Cactus avenues a few miles north of St. Rose Parkway between I-15 and Las Vegas Boulevard South.

The master plan would include homes as well as a large retail shopping center. Goett had previously indicated that the project could start construction by 2010.

Goett's company also owns land west of I-15 that is part of the Southern Highlands community and could accommodate a casino.

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