Spain looks to be Sheldon Adelson’s next big bet as the Las Vegas Sands’ (LVS) chairman announced he intends to invest US$35bn (€26.6bn) to build the Eurovegas casino resort. Adelson was speaking at the opening of the US$ 4.4 billion Sands Cotai Central in Macau – one of Adelson’s most successful gambles to date.

One has to wonder from where his confidence comes from for his European venture. Last summer Global Betting and Gaming Consultants published an analysis as to recessions affect the gambling industry and the worst affected segment proved to be casinos.
Europe, and particularly the Eurozone, is currently in the midst of its worst economic crisis since the Depression, and regardless of the outcome of the crisis, the negative effects on European consumers’ disposable income will be felt for years to come.
European casinos are suffering. The four Italian casinos lost 8.4% of revenue in 2011 compared to 2010, with the largest casino, Casino di Venezia, losing 13.2%. In Q1 2012, the four casinos’ revenue continued its fall, down 13.7% compared to the same period of 2011. 

In Greece preliminary results show that for 2011 the nine casinos generated a revenue 18.5% lower than 2010, which itself was the worst year in a decade. Casino attendance also declined by 5.5%.
Groupe Partouche, France’s biggest casino operator, derives 99.7% of its casino revenue from European operations. In 2011 revenue derived from casino gaming declined by 3.2% compared to 2010.
2011 data for Spain’s casino sector are yet to be published but the economic indicators do not indicate a surge of casino gambling. The Spanish central bank expects private consumption to decrease by 1.5% in 2012 and increase between +0% and +0.5% for the next two years. Additionally, unemployment is expected to remain above 20% until at least 2014 and there might be additional tax rises on top of those already announced.
Seeing the state of casinos in most European countries would deter even the most optimistic of investors, but not Adelson. 
The LVS Chairman is also driving a hard bargain with the local, regional and central governments in Spain, who are bending over backwards to accommodate him. Barcelona and Madrid are the two candidate cities eager to house EuroVegas.
With the Spanish economy forecast to shrink in 2012 and 2013 and with unemployment remaining around 22%, the investment is highly attractive to all concerned and Adelson knows that. He provided Spanish authorities with a long list of what he would like if they want LVS to build the huge resort in Spain, including a 10-year gambling tax holiday and an exemption from the smoking ban and labour regulations. 
What initially seemed like excessive demands on Adelson’s part now seems like a well-judged call because the Spanish government is still sitting at the negotiating table.
Even if the Spanish government satisfies most of his wishes, the whole operation is still a huge gamble mainly due to size of the project. LVS intends to build 12 integrated resorts with 12 hotels, three golf courses, six casinos, a stadium and a number of restaurants. Once completed, the resort will have 36,000 rooms and in scale it would be equivalent to half of the Las Vegas Strip. 
Warwick Bartlett, CEO of GBGC, said, “Adelson took a big gamble with both Macau and Singapore and both paid off handsomely.  The investment in Spain is huge although it is over a longer time period but in a difficult European market. LVS must be betting on an eventual European recovery.  The problem with raising the stakes to these levels is that if the investment return doesn’t match the plan you risk everything”.