We haven’t written much about Macau, because well, Macau isn’t Las Vegas. But its ties to Las Vegas and the companies that operate casinos in both locales are very strong. There are 3 US companies that operate casinos in Macau, Wynn Resorts, Las Vegas Sands, and MGM-Mirage. Recently though, one of those operators, Las Vegas Sands, has become the target of multiple lawsuits regarding the securing of its gaming license. Quick geography lesson, Macau is classified as a Special Administrative Region of China, similar to Hong Kong. Governed by China, it is located about 45 miles west of Hong Kong, as is comprised of only 21 square kilometers of land. The big deal here, though, is that gambling is legal, and it’s proximity to the many Asian gamblers makes it a gold mine, as many companies have already discovered. In fact, recently Macau became bigger than Las Vegas in gaming revenue, for the first time.
Having traveled to China, and studied in detail the way business is conducted there, it’s no surprise that allegations of impropriety would arise. Connections and who you know reign supreme as far as getting deals done in China, with family connections and friends of friends taking precedent over traditional channels, or being able to throw money at a problem. Payoffs and kickbacks are commonplace, and it seems like the LV Sands lawsuits are an example of the difficulties in a foreign company entering a mostly closed market.
From an article in the Las Vegas Business Press:
Three multi-million-dollar lawsuits against Las Vegas Sands and owner Sheldon Adelson have shone a light on events leading up to the company's casino expansion into Macau. Potentially, they expose a grittier side to the company's foreign business practices.The lawsuits -- two filed in District Court and one in Federal Court -- allege a series of broken promises and possibly questionable business practices by Adelson and top Las Vegas Sands executives in their rush to secure Macau's final casino concession in 2002.
When the gambling monopoly in Macau was lifted, predictably the competition for the few gambling permits was fierce. Allegedly LV Sands entered into a partner ship with a Hong Kong businessman, as well as a Taiwan Corporation, and then reneged on its deal when they obtained the license through alternate channels. Both parties are suing to get their promised cut.
For those of you that don’t know, Sheldon Adelson is currently the 2nd richest man in America behind Bill Gates, as LV Sands stock has been one of the hottest of the last year. He also has a very public feud with Steve Wynn; call it a clash of very large egos, for these 2 neighbors in Las Vegas. (Adelson’s Venetian is next door to Wynn Las Vegas) Anyway, we have zero inside knowledge on this topic, or of the legal precedents, but this looks like a set of cases that will never make it to court, either by being thrown out, or at the very most, resulting in a settlement.
Gaming isn’t always a clean business, especially coupled with the shady environment in Macau…but it makes for good theater, and we will definitely keep you updated.
A gritty side of Las Vegas Sands
We haven’t written much about 
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