Eurovegas not coming to Madrid after company demands rejected
Casino tycoon Adelson wanted guarantees of financial compensation in the event of future legislative changes
The Spanish government has said “no” to the latest demands made by a US casino magnate in exchange for choosing Madrid as the location of a mammoth new gambling resort.
Las Vegas Sands has announced that it is no longer interested in Spain and will seek to set up its project elsewhere, likely Japan or Korea. Until now, the town of Alcorcón, 13 kilometers southwest of Madrid, had been the preliminary choice for a complex dubbed Eurovegas.
But at the latest meetings between the Spanish government and Las Vegas Sands representatives, officials said that Spain was not willing to accept some of the company’s conditions, which included lower gambling taxes and guarantees of financial compensation in the event of future legislative changes under different governments. The US company was concerned that a new administration might reverse controversial agreements such as lifting the nationwide smoking ban inside the casino premises and giving the resort major tax breaks.
Sources familiar with the situation said that some of the conditions imposed by representatives of the business tycoon Sheldon G. Adelson were laid out at the last minute, and have no precedent in any other of the countries where Adelson owns similar mega-resorts. Providing compensation for future legislative changes, thereby ensuring that the company's profits do not fall, would have violated European competition laws. But company officials said the conditions were not negotiable.
The project included 12 hotels with 36,000 rooms, six casinos, golf courses, shopping malls, a convention center, bars and restaurants. The initial investment was estimated at around six billion euros (going up to 17 billion by the completion date) and it was going to create 25,000 construction jobs and 75,000 more in the services sector.
For a while, Barcelona and Madrid competed against each other for the privilege of being home to EuroVegas. The conservative PP had initially hailed the development as a much-needed boost to the Spanish economy that would bring jobs and wealth to the region.
But the project was controversial from the beginning, with critics pointing out that all the tax breaks essentially meant that the resort would not be contributing that much to regional wealth. Another major criticism levied against the Popular Party (PP) government was that it was willing to let a foreign entrepreneur with a lot of money bypass the country's non-smoking laws, affecting workers’ health. Opponents of the mega-resort also said that it would only provide low-paying jobs.
In a statement issued Friday, the company said that after months of continuing talks at several levels with the government of Spain and an in-depth analysis, Las Vegas Sands Corp will not be presenting a formal investment offer of 30 billion dollars in a series of integrated resorts in Madrid.
“While the government and many others have worked diligently on this effort, we do not see a path in which the criteria needed to move forward with this large-scale development can be reached. As a result we will no longer be pursuing this opportunity,” Adelson said in the statement.
“Developing integrated resorts in Europe has been a vision of mine for years, but there is a time and place for everything and right now our focus is on encouraging Asian countries, like Japan and Korea, to dramatically enhance their tourism offering through the development of integrated resorts there,” the statement added.
The Spanish secretary of state for the economy, Fernando Jiménez Latorre, said that investments are neither good nor bad per se but depend on whether conditions are acceptable.
The government’s Madrid delegate, Cristina Cifuentes, added that while the EuroVegas project in Alcorcón is “very important for the region of Madrid and for Spain, we cannot create a permanent exception.”
Cifuentes referred specifically to the lower taxes demanded by Adelson as well as the request to let people smoke inside his hotels and casinos.
“The law is the same for all citizens,” said Cifuentes, before adding that “I would like for this not to be a definitive decision and for both parties to reconsider so that such an important project can move forward.”