Scepticism is still the backdrop to EuroVegas as people track its progress. Critics claim developing a 18bn-Euro complex is implausible in Spain’s current economic climate, with some even suggesting the project is a stunt to increase the share price of Las Vegas Sands. If this is the case, it has worked. Combined with the company’s on-going investment in Macau, shares have risen over 13 percent on last year’s valuation.
But despite long-term economic and social uncertainties, Sands’ CEO and casino visionary Sheldon Adelson is known to take big risks. It would be no surprise to see one last bold venture before his retirement, enabling Sands to leverage Spain’s healthy tourism industry and accessible location as a gateway into Europe. At the ICE exhibition in London last month, the company’s number two Michael Leven declared, “We expect to lay the first stone at the end of the year.”
That first stone would be the start of a 12-year master plan to bring a vast complex of casinos, hotels, golf courses, conference centres and retail stores to debt-ridden Spain. At a meeting in Madrid last month, Sands specified Alcorón as the site, a commuter town 13km southwest of the country’s capital.
Upon announcing the location, Ignacio Gonzalez, President of the regional government, avowed that EuroVegas would occupy an area equivalent to 750 football fields in the dormitory city. Despite fierce resilience that the project will increase crime and gambling addiction, government-owned PromoMadrid estimates that EuroVegas could create 164,000 jobs directly and a further 97,000 indirectly, equal to about half the number unemployed in the region.
“For some time we have been working on an inspiring and extraordinary project whose goal is to make Madrid the international reference point for conventions, fairs, exhibitions and leisure in Southern Europe,” explained Gonzalez, adding that with the recently built terminal, Madrid airport now has enough air capacity to handle the one million tourists from around Europe who are expected to visit each year.
Under plans, the destination will be triangular in shape with sides three kilometres long, roughly half the size of Las Vegas. It will house 36,000 hotel rooms and six casinos with over 18,000 slots and 1,000 tables. A recreation of Times Square New York will act as the centrepiece, amongst other attractions including a 20,000-arena pavilion and majestic skyscrapers dubbed “La Eme” that will be the tallest in Spain.
Built in three phases, the first is due to open at the end of 2017. Sands confirmed in Madrid that it has secured 9.8bn Euro to construct four casino resorts with up to 12,000 hotel rooms during phase one. Initial profits will be used for the next phases, which will allow other operators to pitch their projects.
Expected to open by 2022 and 2026, respectively, 79-year-old Adelson is hoping to see phases two and three operational by his 100th birthday. The total project is expected to cost in the region of 18bn Euro, the largest financial investment in Europe’s history.
Michael Leven confirmed, “There should be no concern about this company’s ability to have the financing and the money. We have it,” he said, indicating that Sands would fund 35 percent from its own resources and had banks lined up to finance the rest. Although, no bank agreements have yet been signed as Madrid’s government will first undertake a public tender process.
Deep in recession, Spain started the year with its worst quarterly economic decline since the second quarter of 2009, when the country was stuck in its first downturn. Further government austerity and a 26 percent unemployment rate is adding to the country’s swollen deficit. The EuroVegas project would not only provide jobs, but also attract foreign investment back into the country and promote consumer spending.
Ignacio Gonzalez virtually promised that Spain’s central government would deliver the tax changes, infrastructure as well as the controversial exemptions to the no-smoking laws requested by Adelson. “The smoking issue is also a matter for central government,” said Gonzalez, “It is working on it and will come up with a solution in the next few months, with a chance for restricted smoking.”