It wasn’t long ago that Sheldon Adelson was singing the praises of the Macau government as one of the most investor-friendly his company had ever dealt with.
Last week though his right-hand man William Weidner, the President and Chief Operating Officer of Las Vegas Sands Corp., hinted that the love-in is over. It follows the company’s suspension of new construction and laying off of up to 11,000 building workers on its Cotai site.
“Macau, because of what has happened, has kind of created for itself unfinished or semi-finished projects. I don’t think we’re alone in not completing developments,” Mr Weidner told journalists on the opening day of the G2E Global Gaming Expo in Las Vegas.
Mr Weidner was however gracious enough to acknowledge that political events, let alone economic ones, were not immediately in Macau’s control.
“There have been some changes in the central government’s attitude towards Macau. We don’t think it’s necessarily all that prudent to put more money in until we see how that attitude works its way out.”
Even allowing Mr Weidner the executive defence of being quoted out of context, some might see his viewpoint as a decidedly partial and even disingenuous analysis of events. The reason that auditors issued a warning about the future viability of LVS a few weeks ago had very little to do with the rationing of visits to Macau for heavy gamblers by the Chinese government. It had everything to do with a general crisis of international confidence and a highly leveraged company being caught up in an extraordinary global credit crisis and being unable to sell its project to the debt market.
Mr Adelson’s rival Steve Wynn has previously said he takes no pleasure from his competitors’ discomfort in the current turmoil, but his media statements since then have done a passing impression of a gloat.
“If someone tries to build six hotels at once and finds the market can’t accommodate it, there’s a problem with the planning,” Mr. Wynn said in an interview with Bloomberg Television on Wednesday.
“The government attempt to moderate the impact of explosive growth in Macau was well considered and well timed,” suggested Mr Wynn.
“There’s no question the economy had been overheated. If people who work for us can’t afford to live in apartments in the city, that is surely a sign that expansion had been too rapid.”
So there.
