Vegas Sands Targets Asia for 90% of Revenue as Rollers Return

Las Vegas Sands Corp., the casino company of billionaire Sheldon Adelson, expects 90 percent of its revenue to come from Asia by 2020, as its Singapore resort ramps up and more of China’s gamblers visit Macau.

“I don’t think there was a recession in this part of the world, and therefore that didn’t affect gaming very much,” Adelson said in an interview while in Singapore for the Marina Bay Sands resort’s grand opening. “We hope that 90 percent of our income comes from Asia” within 10 years, he said.

Asia accounted for about 73 percent of the company’s revenue at the end of last year. The casino operator is investing $5.5 billion in the Marina Bay Sands complex, a bet that economic growth in China and the region will boost demand for shopping, entertainment, gambling and tourism. Singapore has said the resort will help it lure 17 million visitors and triple annual tourism revenue to S$30 billion ($22 billion) by 2015.

Marina Bay Sand’s second phase, including a sky park atop the three 55-floor hotel towers, a waterfront plaza and more restaurants, opens today. Some convention facilities, shops, theatres, rooms and restaurants opened in April. The island nation’s other casino, Genting Bhd.’s $4.7 billion Resorts World Sentosa development that includes a Universal Studios theme park, opened in February.

Gambling Rebound

Adelson, in a Bloomberg Television interview, said gambling and tourism have recovered in Macau and in Las Vegas after the global credit crisis slashed demand in 2008.

Casino gambling revenue in Macau, the world’s biggest gambling hub, almost doubled last month, according to a person familiar with the information.

Gambling revenue for the city’s casinos in May rose to 17 billion patacas ($2.12 billion) from 8.8 billion patacas a year earlier, according to the person, who requested anonymity because the data isn’t public. The total for the five months through May rose to about 72 billion patacas from 43 billion patacas a year earlier, the person said.

The Venetian Macao gets about 40,000 visitors to its shopping malls during the week and about 65,000 on weekends, Adelson said. Visitors to Marina Bay Sands’ shops should be “more than twice as many” within the same timeframe, he said. The Venetian Macao opened in August 2007 on the Cotai Strip. The southern Chinese city surpassed the Las Vegas Strip as the world’s biggest gambling center in 2006.

Profit Outlook

Marina Bay Sands is forecast to generate earnings before interest, tax, depreciation and amortization of $329 million in 2010, based on the average of 13 analyst estimates compiled by Bloomberg.

Las Vegas Sands on June 3 estimated it will generate as much as $3 billion in adjusted earnings before interest, taxes, depreciation and amortization in 2011. The company’s majority- owned Chinese unit may generate $1 billion to $1.2 billion in 2010, it said in a June 3 regulatory filing.

The company’s U.S. gambling business is also recovering, Adelson said.

“Las Vegas got hit pretty hard during the recession and wasn’t helped by President Obama saying we don’t want companies who use debt to pay us money to bail out their balance sheets to go to Las Vegas for the Super Bowl,” he said. “But now we have a big automobile company that received a lot of money from the government, who’s going to have a very big event in our property in Vegas.”

As much as 50 percent of the company’s Las Vegas hotel bookings coming from conferences and exhibitions that are sometimes organized years in advance.

Pre-Crisis Levels

Gaming in Las Vegas should return to pre-crisis levels within two years, Adelson said.

“It’s not a case of optimism, but listening to our customers and seeing the bookings in our hotel that are more vibrant than they were before,” he said. Gaming activity in Las Vegas will return to “80 percent plus” of pre-crisis levels in 2011 and “probably about 100 percent in 2012.”

The company’s new Singapore property has surmounted some of the problems that led to complaints at its opening in April, Adelson said.

The Marina Bay Sands resort sued the organizers of the first conference it hosted after payment was withheld following a power failure. The Walt Disney Co. musical the Lion King has been delayed because the building isn’t ready.

Adelson also said opening glitches were “normal” and early visitor numbers at Marina Bay Sands “more than sustainable.” About 550,000 people visited the casino in the first 25 days of May with two-thirds either tourists or foreigners living in Singapore, and one-third Singaporeans, who pay a S$100 ($72) government fee to enter.

Thanks To : BUSINESSWEEK

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