Gaming
Outside Nevada: Singapore Picks Sands
By Howard
Stutz - Las Vegas Gaming Wire
LAS VEGAS
AND SINGAPORE -- The news from Singapore was coming and
Las Vegas Sands Corp. prepared for the worst.
The casino
company learned late Thursday
night that the Singapore government was about to award the right
to build a potentially lucrative hotel-casino complex in the
city-state's marina district. So, Las Vegas Sands, one of several
bidders for the site, drafted two press releases: one announcing
a victory, another conceding defeat.
Las Vegas
Sands President Bill Weidner was ready to distribute the latter.
"We
wanted to tell the market that we were still alive and kicking,"
said Weidner, whose company operates The Venetian.
After a
phone call from Singapore authorities at 2:15 Friday morning
announcing the company had been awarded one of the most hotly
contested gaming opportunities in the past few years, Weidner
told Las Vegas Sands spokesman Ron Reese to destroy all evidence
of the conceding statement.
The victory
gives Las Vegas Sands the right to build an estimated $3.6 billion
integrated resort, which will include Singapore's first casino.
The Singapore
government began the process of opening its borders to casino
gambling two years ago as a way to increase tourism to the small
island off the tip of Malaysia. Bids for a second casino location
are due in the fall.
The process
attracted some of the gaming industry's largest casino operators,
many of whom, such as Harrah's Entertainment and MGM Mirage,
forged partnerships with Asian entertainment, convention and
retail companies in their bids.
Las Vegas
Sands chose to go it alone.
"We
basically put ourselves out there, saying, 'here's what we've
accomplished and here's what we're proposing,' " Weidner
said.
In its bid
to the Singapore government, Las Vegas Sands said the proposed
Marina Bay Sands would include 2,500 hotel rooms, 1.2 million
square feet of meeting space, 1 million square feet of retail,
and three entertainment venues, in addition to the casino.
Singapore's
Deputy Prime Minister S. Jayakumar said the proposal best met
the city-state's economic and tourism objectives, and would
significantly strengthen Singapore's position as a leading destination
for conventions and exhibitions.
"The
(Sands) proposal also possesses unique design elements which
will provide a memorable image for Marina Bay," Jayakumar
said.
According
to the Singapore Tourism Board, the bidders were judged based
on four criteria: tourism appeal and contribution; architectural
concept and design; development investment; and strength of
each consortium and its partners.
Many analysts
and observers had ranked the Las Vegas Sands bid behind proposals
from rival casino giants Harrah's and MGM Mirage because of
those companies' Asian partnerships. Malaysia-based Genting
International PLC also bid on the project with Star Cruises
Ltd.
In addition,
questions were raised about Las Vegas Sands' commitment to Singapore.
The company operates the Sands Macau in China and is developing
Macau's Cotai Strip, a destination that is being billed as "Asia's
Las Vegas," with plans for nearly two dozen hotel-casinos.
The company is also spending $3 billion to build the Venetian
Macau to anchor Cotai.
In the end,
Weidner believes the company's track record in Las Vegas and
development plans for China helped convince Singapore leaders
to support the bid. The company's experience in the meetings
and its convention and exhibition businesses, which has included
building and operating large convention facilities, also impressed
decision makers.
"There
were questions, but northern Asia is going to be driven by Chinese
tourism and southern Asia (Singapore) will be driven by visitation
from other areas," Weidner said. "This allows us to
create not only a large footprint in northern Asia, but now
a huge footprint in southern Asia that will enable us to generate
mutual benefits for both economies and for visitors alike."
Weidner
said the company's history in building destination resorts may
have also been a factor.
"We
don't acquire properties. We design and build them from the
ground up," Weidner said. "I think our ability and
our track record helped."
Deutsche
Bank gaming analyst Marc Falcone agreed with Weidner's assessment
in a note to investors Friday.
"We
believe Las Vegas Sands' well known familiarity with the convention
and exhibition business played a key role in deciding the bid,"
Falcone said. "It remains difficult to determine the return
potential for the project, as the regulations and specifications
remain uncertain."
Investors
were bullish on Las Vegas Sands following the announcement.
The company's price on the New York Stock Exchange had taken
a beating much of the week due to profit-taking, analysts said.
Friday's
announcement sent shares soaring more than 12 percent when the
market opened. By the end of the day, more than 7.5 million
shares were traded with the price closing at $69.63, up $5.96,
or 9.36 percent.
Weidner
said Las Vegas Sands would jump into the final design process
for Marina Bay Sands on Tuesday. He was unsure when construction
would begin. However, he said the company will open 100 percent
of the facility sometime in 2009.
"We're
doing a press conference in Singapore on Tuesday to introduce
the design consultants and our partners," Weidner said.
"We have a lot of our people in place."
Singapore
Trade and Industry Minister Lim Hng Kiang said the Marina Bay
Sands would directly employ 10,000 people and result in 20,000
jobs being created in other industries.
On the other
end of the spectrum, both Harrah's and MGM Mirage released separate
statements commending the Singapore government for conducting
a "thorough and detailed process."
However,
while Harrah's Chairman Gary Loveman congratulated Las Vegas
Sands, MGM Mirage made no mention of its competitor.
Loveman
was complimentary to Singapore, leading some analysts to believe
the company would bid on the city-state's second casino site
on Sentosa Island. Responses to Singapore's request for proposals
on that location are due Oct. 10.
Bear Stearns
gaming analyst Joe Greff said Harrah's could scale down its
Caesars Singapore proposal for Sentosa Island. He believes MGM
Mirage will take its development dollars to Atlantic City and
build a project similar to its planned $7 billion Project CityCenter
in Las Vegas.
MGM Mirage
spokesman Alan Feldman said the company wouldn't bid on the
Sentosa Island site. Harrah's spokesman Alberto Lopez was noncommittal
on the company's plans, saying executives still had time to
review options in regard to Sentosa Island.
Other gaming
companies expected to bid on the Sentosa site include Kerzner
International and Isle of Capri casinos.
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