Inside Asian Gaming

December 2010 | INSIDE ASIAN GAMING 9 Inside Asian Gaming doesn’t claim to have an inside track on Macau government thinking, but it has spoken to people familiar with the Cotai legal process. They suggest there is a real possibility that LVS may still get its hands on 7 and 8. That’s not because LVS has strong grounds for an appeal against the process (it apparently doesn’t). It’s because the government would probably prefer not to have to pay LVS compensation for the work it has already done on the site and because any such compensation claim could mire Cotai 7 and 8 in litigation that could effectively tie up the land and prevent it being used by anyone for years to come. “For the last two or three years the government has asked Sands China to do consolidation work on lots 7 and 8. LVS has spent somewhere between US$100 million and US$150 million,” a source told IAG . “The company could sue the government to reclaim that money, and I don’t think the government wants that. If that aspect of the matter goes to court, then the litigation could be endless. You could get a situation where no one will ever build anything on Cotai 7 and 8,” added the source. Dirty linen There are other consequences that could come from a court battle between LVS and the government over Cotai 7 and 8. All kinds of unpleasantness relating to the government’s relationship with the casino operators—the sort of cringe-making moments experienced during Hong Kong businessman Richard Suen’s lawsuit against LVS in Nevada—could become available to the media under the cloak of legally privileged court reporting. To use the language of the Cold War, that could risk what military analysts of the nuclear missile standoff between the US and the Soviet Union used to refer to as ‘mutually assured destruction’ or ‘MAD’ for short. Thus far, LVS is taking a subtler, and it hopes a more effective approach, based on administrative law. “LVS didn’t appeal against the decision stated in the government’s letter,” the contact told IAG . “A formal appeal means a court hearing. At that administrative level it’s only possible to appeal when there’s someone higher in authority to appeal to. This decision “to not approve” was made by the Chief Executive, so in terms of administrative law there’s no one beyond him. What LVS has done instead is to ask the government to re-evaluate and reconsider the position stated in the letter. “Technically, the government has 15 days from the date of LVS’s request for re-evaluation to give the company an answer. In reality, it might take longer. But if it’s kept at that administrative level, the decision could take less than two months. “It’s still possible the government will reconsider and grant [Sands China] the land.” Cotai—from gambling strip to family haunt in one easy policy shift Cover Story