Investor Confidence Failing for Sands Macau Amidst Adelson’s Legal Problems
Sheldon Adelson has always been a bullish businessman. He was the one responsible for transforming the Sands into a viable casino franchise, and his success in the US was also duplicated in Macau. However, the Sands—and Adelson, in extension—have made waves in the news recently, and not for the right reasons.
Situation one: the revenues from Sands Macau—while not exactly in its direst yet—have been increasingly falling lately. Part of it may have been due to the fact that China, Macau’s traditionally stronger market, has been imposing stricter visa issuances, and that Singapore is also imposing limits on their own by restricting underprivileged local pokie gamers access into the country’s casino.
Situation two: the months-long legal struggle between Adelson and his former employee at Sands, Steven Jacobs, has taken a toll at the Sands Cotai’s reputation. It was only late last month when Jacobs submitted to the court documents alleging that Adelson knew, and even personally approved, of instances of prostitution happening inside his casino, along with the other charges that he was supposedly favouring members of the local mob with access to the most lavish of services that the venue can provide.
Situation three: he pledged to give about ten million dollars to US presidential candidate Mitt Romney’s political action committee (PAC)—the amount of which numbered to about half of the receipts collected by the Sands franchise worldwide for this June. Adelson is a savvy businessman, so it was expected that some pundits have already made a stink about it being a risky move for him.
So, were there any consequences to his actions so far? As if you still have to ask: the public shares for Las Vegas Sands have tumbled to about $36.18 a piece—a steep twenty per cent drop from last week’s figure. The last time that Sands have been traded this low was as far back as October 2010. However, the Sands was not the only one suffering on the economic horizon; MGM, Wynn, and Caesars have all reported varying drops of revenues in the last quarter, which is “highly correlated to the pace of economic growth”, as an analysts for Forbes Magazine had put it.
The future looked so bright then for the Asian gaming market; what gives? Well, the least we can do is to expect those involved to weather the storm soon.
Thailand Billionaire Favours Opening the Country to Pokies
"We should accept the truth that we have underground businesses." That was the stark reminder of Thailand’s wealthiest man, Dhanin Chearavanont, and also head of the country’s mutli-headed conglomerate, the Charoen Pokphand (CP) Group, in an interview with Forbes Magazine.
One of Thailand’s biggest income generators is its tourism sector. Perhaps taking his cue from the successes of the country’s Asian neighbours like Macau and Singapore—just two among the dozens of Asian countries that are similarly trying to structure a highly functional gambling sector—Chearavanont proposed that, instead of stamping out pokies completely, the government should instead embrace it and build a hub from which Thailand’s tourism industry can grow to even further heights.
“Because gambling is illegal, they don't pay tax but instead run the business underground and pay money under the table. Why don't we legalise it?” the wealthy businessman reasoned out. He also urged the government to “study Singapore’s case”, noting that ever since the latter had overturned its ban on casinos in 2005, foreign investors had been flocking to that country and building businesses and infrastructures that have made it the envy of most of its Southeast Asian neighbours; the Universal Studios theme park, which is the region’s only internationally marketed theme park, had been funded mainly from its revenues from casinos and online pokies two years ago.
He also suggested in the interview that, if ever there were investors willing to put up the money to build a casino in Thailand, Chiang Mai, Phuket, and Pattaya should be likely locations because of these places’ reputations for being major tourist pit stops. “If Thailand opens a casino, we will get more revenue than Macau,” he projected.
However, there is still the issue of sectarian opposition to contend with; more than ninety per cent of the country’s sixty-seven million people—according to the latest census as of this month—are all devout Buddhists. One do not need a degree in Sanskrit studies to know how this will turn out.
Nevertheless, these may be only temporary road blocks to Thailand’s progress to success.