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If you thought Sheldon Adelson would be content with the success of the Marina Bay Sands in Singapore and the Macau resorts, you are wrong, my friend. The eighth-richest person in America and chairman and CEO of Las Vegas Sands (NYSE: LVS ) is now interested in building his casino playground in Europe -- and Spain has become his likely choice.
After fruitless talks with Spanish authorities spanning a few years, the recent change in Spain's political environment and the dire need for an economic upturn seem to have made it easier for Las Vegas Sands to foray into the country.
Adelson's hunger for growth
Las Vegas Sands is focusing on investing a massive $22 billion earmarked for the "Eurovegas" construction in either tourist-centric Barcelona or business-centric Madrid. The company plans to build a total of six casinos, 12 hotels comprising 36,000 rooms, as many as three golf courses, and much more in terms of malls and restaurants in this area.
Although how much exactly Las Vegas Sands aims to generate out of this venture is still unknown, it cannot be compared to the company's resorts at Macau or Las Vegas. That leaves one of the company's most profitable ventures to date -- the Marina Bay Sands -- as a possible benchmark for comparison. And the results raise my hopes for the true potential of the upcoming Spanish property. Marina Bay Sands has earned $1.53 billion in earnings before interests, taxes, depreciation, and amortization over the last 12 months and is significantly smaller than what is planned for Eurovegas. Moreover, Spain has been consistently ranked as one of the top three most-visited countries in the world, while Singapore is somewhere far behind.
This may be the best time to invest in Spain, given the country's woeful economic condition. Any new investment plans made now stand a good chance of securing government support.
Spain has a high unemployment rate of about 23%, and to make things worse, the economy is expected to shrink by 1.7% in the current year. The very fact that Las Vegas Sands' investments made in Spain could possibly generate over 260,000 direct and indirect jobs should be reason enough for the government to offer major concessions. And that's not all, as the lack of major competition in the region could be a big win.
Spain is still unclaimed territory, free from industry rivals such as Melco Crown Entertainment and Wynn Resorts. Although newly listed peer Caesars Entertainment (Nasdaq: CZR ) tried to make inroads into Spain a few years back, the project failed to materialize.
The Foolish takeaway
Las Vegas Sands is expected to take a call on this investment within the next two months. But if you ask me, the Spanish venture has all the ingredients to become a sure winner.
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