Madrid government rejoices at news of EuroVegas decision
Opposition politicians fear “tax haven” abuses as doubts amid lingering doubts over macro-project’s financing
The announcement that EuroVegas will finally be built in Madrid after months of uncertainty was welcomed with “great joy” by the regional government, which called the news “a liberation.”
“The regional premier’s determination has brought this project here over other serious candidates like Barcelona,” said a spokesperson for Esperanza Aguirre, of the conservative Popular Party (PP).
Madrid and Barcelona had been fighting over the chance to host what amounts to a Las Vegas franchise — an enormous gambling complex that could hold up to 12 resorts with 3,000 rooms each, six casinos, an auditorium with a seating capacity for 15,000 people, nine show rooms, seven theaters, dozens of restaurants, bars and nightclubs, between one and three golf courses and 40,000 parking spots. The project is the brainchild of the US business tycoon Sheldon Adelson, the world’s 14th richest individual and owner of Las Vegas Sands (LVS), who said he wants “to create a mini-Las Vegas in Europe.”
“Perhaps today, unlike 30 years ago, Madrid is more cosmopolitan and more open than Barcelona,” said Aguirre in a radio interview to justify Adelson’s decision to snub the Catalan nationalist government. “Catalonia has an advantage that we cannot compete with, which is the sea, but perhaps the sea is not so interesting to someone who just wants people to be in his hotels, his theaters, his museums and his sports areas.”
The public tug-of-war between both regions met with public protests over the plans and numerous question marks regarding just how much money and jobs EuroVegas will bring. Spanish politicians rushed to say that Adelson’s project will mean a 16.9-billion-euro investment and 261,000 new jobs, but the fact is that the figures have been changing from one month to the next. In the meantime, Adelson has demanded special legal treatment for his complex, including exemptions from labor laws, the smoking ban and major tax breaks for a decade.
Madrid’s Socialists say they will be “very vigilant” when it comes to “the secret conditions” negotiated between Aguirre’s government and the magnate because “the law must be the same for everyone,” said the party branch secretary general, Tomás Gómez.
Meanwhile, UPyD spokesman Luis de Velasco noted that his group has opposed this project from day one “because we disagree with this growth model based on gambling for the region; we disagree with the final goal, with the legislative concessions and with the public economic resources that will be used.”
The leader of the United Left (IU) coalition, Cayo Lara, went even further and said that EuroVegas will “use up resources to finance a factory of compulsive gamblers” and that it will create “a tax haven with all the undeclared money of someone who is used to financing the Tea Party in the United States,” in reference to Adelson’s declared support for certain Republican politicians.
Be that as it may, the 79-year-old Adelson is now on the verge of closing a deal to buy up a third of the surface area of Alcorcón, a municipality of 170,000 residents located 13 kilometers southwest of the capital. This is where LVS plans to build a complex that mirrors similar projects in places like Macao, China.
In October 2011, LVS handed Spanish authorities a confidential economic impact report drafted by Boston Consulting Group, to which EL PAÍS has had access. This report has been the basis for Madrid’s enthusiastic support for EuroVegas; however, the consulting firm warned that its conclusions are preliminary. For starters, the forecast at the time that the report was made talked about a progressive improvement of the Spanish economy, yet soon later Spain slipped into a recession for the second time in four months.
Additionally, LVS officials have also made changes to the investment figures and deadlines. While the Boston group’s report talks about a global investment of 15 to 18 billion euros (the equivalent of 65 to 80 percent of total foreign investment in Spain in 2010) and takes the average as a reference number (16.9 billion euros), in October 2011 that was 23.5 billion dollars, whereas at the current exchange rate it is 21.3 billion dollars. In April 2012 Adelson talked about 26.9 billion dollars.
In the fall, another study by a prominent Wall Street firm noted that LVS was planning to replicate its Macao model in Spain: first it would build a casino, then enlarge the complex depending on the profits.
Michael Leven, director general of LVS, confirmed that they are expecting a 20-percent return on investment, but that the company would only be putting up a third of the cost, with the rest coming from bank loans.
According to Boston Consulting Group, EuroVegas will be built over the next decade up to 2022, although Madrid premier Aguirre has said it will be ready before that.