Sands confirms Cotai project on schedule for late 2011
Las Vegas Sands (LVS) executives foresee Macau casino revenues increasing by more than 30 percent in the second half of this year and have confirmed their Cotai project is on target for completion in the third quarter of 2011.
LVS chairman Sheldon Adelson and chief executive officer of its unit Sands China, Steve Jacobs, spoke to reporters after a meeting of Sands China shareholders in Hong Kong on Saturday.
Adelson pointed out that in the first half of this year there was a substantial revenue increase of 60 percent year-to-date that he considered “easy income”. “Last year, in the middle of the economic tsunami, the income was very low. So in the first six months of this year the increase was much accelerated. I expect in the second half that the income would be more difficult to grow,” he said.
The casino tycoon is expecting a “natural growth” of 30 or 35 percent of gaming revenues year-on-year, which will benefit all six concessionaires.
Jacobs confirmed that phase 2 and 3 of the Cotai project will open in the third quarter of 2011. “The third quarter of 2011 was the date we gave to our lenders,” he said.
When asked about the schedule for the start of construction, Adelson did not give details. “It takes a few months to mobilize. [...] We had 11,000 Macanese construction workers when we stopped in November 2008, and we have to recruit them again, as well as contractors. It’s our job to get those people,” he pointed out.
Sands China last month secured USD 1.75 billion of financing from lenders to complete its new casino hotel complex in Macau. The expansion will include two casinos, 800,000 square feet of retail area and 800,000 square feet of meeting space. This USD 4 billion project will add 6,000 rooms to the 3,600 the casino operator currently has in Macau.
No to caps on tables
According to Jacobs the company will “wait and see” how the imported labour restrictions imposed by the Government will effect them, but will work collaboratively with the Executive.
Talking about restrictions, Adelson was not happy with the Government’s decision to cap the number of new gaming tables in Macau at 500 over the next three years, bringing the total table number to 5,500.
“I don’t believe the gaming tables cap is what really defines the capacity. The number of tables is more meaningful for us, because our target is mass market and VIP market. As opposed to our competitors that are more focused on the VIP market. I don’t want to criticise the Macau Government, they can do whatever they want. Is it best for everybody? Probably not.” he said.
Instead of limiting the tables, he continued, there should be caps on the number of casinos for each operator. “What is more important is the number of places that people have the choice of going to. Because when a customer says he is going to the casino number 22, he has no idea of the number of gaming tables that is in the casino number 22,” he said.
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