Inside Asian Gaming

INSIDE ASIAN GAMING | December 2010 8 Hotel, is given a new completion deadline of April 2013. December 2009 —LVS announces it has secured in principle US$1.75 billion debt funding towards the US$4.1 billion cost of Cotai 5 and 6 and that it will recommence construction at the earliest available opportunity. March 2010 —the Macau government says it will impose a 5,500 cap on the number of live gaming tables in the market henceforward until the end of 2013. That reduces by roughly one- third the number of live tables permitted for GalaxyMacau, Galaxy Entertainment Group’s new Cotai project, and Sands China’s Cotai 5 and 6 in their first phase openings. April 2010 —LVS says in its first quarter results filing to the SEC that it could lose its entitlement to Cotai Plot 3, and with it US$35.6 million in capitalised costs, if it is not able to develop the site. April 2010 —the Macau government announces a ‘one-for- one’policy on construction labour recruitment (i.e. one local hired for every imported worker). This effectively stops dead LVS’s plans to ramp up building work on Cotai 5 and 6. May 2010 —The developers of the stalled Macao Studio City project on Cotai are sent a letter from the Macau government stating it is considering taking back the 32.3-acre site unless there is some evidence that the project (currently mired in litigation between two of the partners) will go ahead. June 2010 —Wynn Resorts announces plans to build a new resort on Cotai with a hoped for completion date in 2014. The land had previously been allocated to Wynn on terms similar to LVS’s neighbouring land concession; i.e., in principle but subject to final legal permission. June 2010 —Ambrose So, Executive Director and CEO of SJM Holdings, calls on the government to re-tender the rights to Cotai 7 and 8. July 2010 —Sheldon Adelson says a fourth quarter 2011 completion date for Cotai 5 and 6 is possible. August 2010 —Michael Leven, acting CEO of Sands China, says the company has spent US$162 million on preparatory work for Cotai 7 and 8 and says, in response to SJM’s stated interest in the land that it will “certainly defend positions on sites 7 and 8”. August 2010 —Francis Lui, Deputy Chairman of Galaxy Entertainment Group, tells journalists the labour squeeze has “slightly affected” the timetable for opening Galaxy Macau, the company’s US$1.8 billionCotai project. Privately analysts are briefed to expect a secondquarter 2011 opening, not the first quarter launch originally planned. September 2010 —Ambrose So reiterates to Inside Asian Gaming that SJMwould be interested in developing a project“possibly with an emphasis on recreation facilities” on the site of Cotai 7 and 8. September 2010 —SJM sends a letter to the Macau government asking to take over Cotai 7 and 8. October 2010 —Steve Jacobs, sacked in July as CEO of Sands China, files a lawsuit against LVS in a Nevada court alleging breach of contract.The deposition claimsMr Jacobs was asked to organise “secret investigations” on Macau government officials so that any negative information could be used against them. November 2010 —LVS says a completion date on Cotai 5 and 6“is not determinable with certainty”until adequate labour quota is received for construction work. November 2010 —A company controlled by Angela Leong, fourth consort of Stanley Ho, announces plans to build a US$1.3 billion ‘theme park’ on two million sq. ft of land next to the Macao Dome, an indoor sports facility built for the East Asian Games in 2005. 2nd December 2010 —The government sends a letter to Sands China, LVS’s Hong Kong-listed unit, saying its application for a land concession to develop the 1.1 million sq. ft Cotai land parcel referred to as Cotai 7 and 8, “has not been approved”. 2nd December 2010 —LVS issues a filing to the US Securities & Exchange Commission giving notice of the decision. 2ndDecember 2010 —LVS’s share price falls 4.2% toUS$49.17 in 4pm trading on the NewYork Stock Exchange after hitting a low of US$47.20 earlier in the day. 3rd December 2010 —LVS asks Macau’s Chief Executive to review the decision on Cotai 7 and 8. 3rd December 2010 —SJM again reiterates its interest in Cotai 7 and 8 – just in case anyone has forgotten. 5th December 2010 —Jaime Carion, Director of Macau’s Lands, Public Works and Transport Bureau, when buttonholed at the weekend by a journalist on the sidelines of a public event, says the government is now looking at developing non-gaming projects on Cotai. “We are looking at more diversification in the Cotai area rather than being exclusively for the casino industry. We want to promote more cultural activities, sightseeing and recreation for families,” he states. Just as interestingly, Mr Carion also said the Sands China application procedure for Plots 7 and 8 was not fully complete and the government would announce the result “at the most convenient time”. “Everything relating to land management will be done accordingly with the Land Law and its additional legislation. But the procedures are still ongoing and there is no final decision yet. The government will announce the decision in the most convenient time,” said Mr Carion. That phrase “not fully complete” suggests the door may still be open to LVS. As has been proven previously in Macau, though, such signals can mean everything or they can mean absolutely nothing. Given this opacity and the shortage of hard facts, it’s hardly surprising that analysts and commentators are forced to resort to speculation regarding the future development of Macau’s gaming sector. During the height of the Cold War between the Soviet Union and the US, when theWest sought to understand what was going on inside the Soviet leadership, such inspired guesswork was known as ‘Kremlinology’. Steve Wynn—Cotai plans Ambrose So of SJM— catching Cotai fever Cover Story