Spain Rejects EuroVegas Plan, Citing Developer's Conditions
Casino magnate Sheldon G. Adelson on Dec. 13 scuttled building plans for a 12-mile-long, four-hotel EuroVegas development on the outskirts of Alcorcón, Spain, eight miles southwest of Madrid, following the Spanish government's rejection of illegal demands for the $30-billion investment.
The EuroVegas plans, first announced in September 2012, called for a 36,000-room, 18,000-slot-machine complex with three golf courses, a convention center, and a 15,000-seat concert hall, plus shopping centers, bars and restaurants.
The 10-year project was touted as an undertaking that would create 260,000 new jobs. Adelson promoted it last year as a boost to Spain's stagnant economy, which is burdened by heavy debt and a 27% unemployment rate. However, the development faced fierce opposition from many locals who feared it would provide only low-paying jobs while attracting organized crime, prostitution and questionable financial dealings.
Las Vegas Sands Corp. (NYSE: LVS), at which Adelson serves as CEO, chairman and founder, demanded legal and financial guarantees that "did not comply with Spanish law or that of the European Union," said Spanish Deputy Prime Minister Soraya Saenz de Santamaria during a press conference. Adelson's wish list included tax benefits, financial compensation in the event of any future changes in law that could affect the project and an assurance that new operators would be not be allowed in the sector. Other requests included indoor smoking exemptions and building-height waivers. The excessive demands did not allow the government "to preserve the general interests of all Spaniards," Saenz said.
"While the government and many others have worked diligently on this effort, we do not see a path in which the criteria needed to move forward with this large-scale development can be reached," Adelson said in a company statement.
Las Vegas Sands now plans to focus on Asia. The operation draws 80% of its annual revenues and cash flow from hotel-casinos in Macau and Singapore. Investigations by the U.S. Securities and Exchange Commission and the Justice Dept. and a civil suit by a former LVS manager in Macau revealed questionable consulting fees that LVS paid Macau legislator Leonel Alves as well as corporate junkets that included Chinese triad members as guests.