The dream of Las Vegas Sands Chairman and CEO Sheldon Adelson to reproduce his successes in Macau and Singapore in Spain came to an end in December, and the implications are large for the nation and the company.
After conducting a spirited competition between Madrid and Barcelona to be the site of the $30 billion multi-use development that included multiple hotels and casinos, a convention center, restaurants and shopping, Las Vegas Sands sought assurances from the Spanish government that the rules would not be changed and the massive investment would be protected.
Among Adelson’s demands were a low gaming tax and a guarantee that the tax rate, gaming regulations and government policy toward the project would not change. In addition, the company wanted an exemption from the strict no-smoking policy instituted by the government several years ago.
Deputy Prime Minister Soraya Saenz de Santamaria said the government was taken aback by some of the demands and could not agree to them.
“New conditions were put forward concerning taxes and legal protection, which could not be taken on board by the administrations involved,” she said. “The government needs to preserve the general interests of all Spaniards.”
Adelson said there was no chance that the government would see it his way.
“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,” he said.
Adelson said his company will now concentrate its expansion efforts in the Asia markets, mentioning specifically Japan and Korea.
Investors were not disappointed in the decision. Shares in Las Vegas Sands rose more than 5 percent in the week following the announcement.