Slowly but surely, Las Vegas Sands
It was more than a year ago that we first began hearing about the development some are calling EuroVegas. Madrid and Barcelona appear to be fighting for the honor to host such a development, and the dollars being thrown around are staggering. The preliminary details are as follows:
- $20 billion to $22 billion investment over 10 years in 12 hotels and six casinos.
- 36,000 hotel beds to welcome guests, an incredible size.
- 18,000 slot machines, three golf courses, a convention center, shopping, and, of course, world-class dining.
Spain is desperate for the development, with unemployment around 23%, a shrinking economy, and a huge budget deficit hanging over the county. So, like Japan, the Philippines, and Vietnam, Spain is looking to casinos to boost the economy and bring investment to the country.
Why Las Vegas Sands?
If Adelson is so excited to build this massive resort, why isn't everyone else? The first issue is sheer size. No one can match Las Vegas Sands' balance sheet and ability to make massive bets on a new gaming territory.
Simply put, Adelson is the only man to talk to who can consider throwing $20 billion around. There's no word whether he may be able to bring partners in, but for now it appears he's on his own.
The good and bad of Spain
Europe has casinos spread about the continent, but nothing like what's on the Las Vegas Strip. A new strip could be a major tourist attraction and bring in players from around the world. We've seen that even new casinos in old locations, like Atlantic City, can revitalize an area for a period of time. But it's still unclear what the revenue potential would be -- I would say probably in line with Las Vegas as opposed to Macau.
Building in Spain would probably be more expensive than building in Macau, and I can't imagine the payback would be higher, so I'm looking at this with a level of skepticism. With unemployment so high in Spain and all of Europe struggling to pull out of the recession, it seems like the wrong time and the wrong place.
There's also the spread of gambling around the world to consider. There are already numerous casinos throughout the U.S., Europe, Singapore, and Macau, not to mention the number of potential new locations around Asia.
Foolish bottom line
I don't see this as a good move, but Adelson has proved that he knows what he's doing when he develops a resort. The Venetian in Las Vegas was a huge success, Macau has been phenomenal, and the highly sought-over expansion in Singapore was a coup for Las Vegas Sands. Maybe Spain will be next?
When Adelson begins speaking about the development and more details are in place, it will be easier to make a judgment. For now, I'll remain hopeful but skeptical about this massive project in Spain. If anyone can prove me wrong, it's Sheldon Adelson.
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Fool contributor Travis Hoium has no position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw. The Motley Fool has a disclosure policy. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.