Casino mogul Adelson pressures Spain to bend rules for EuroVegas
American casino mogul Sheldon Adelson's EuroVegas project could bring Spain much-needed investment, but the deal comes with demands for unappealing legal and financial exemptions.
American casino mogul Sheldon Adelson has a “vision” of bringing a massive Vegas-style casino complex to Spain and is tempting officials with billions in investment and tens of thousands of jobs that are sorely needed.Skip to next paragraph
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But Mr. Adelson's proposal comes with big demands, which reportedly include fiscal breaks and substantive reforms to Spanish laws, and have already prompted a backlash that could upend the project altogether. His proposal is triggering a broader debate in Spain about just how far the country should be willing to go to exit its worst recession in decades. Spain's final decision on the proposal isn't expected until this summer.
The proposed project would involve building 12 hotels, six casinos, a concert hall, several theaters, and golf courses on about three square miles over the next decade. Ron Reese, vice president of public relations for Adelson’s Las Vegas Sands Corp., told officials and Spanish media during a tour last month that some 17 billion euros would be invested and around 260,000 jobs would be created.
Adelson’s company hasn’t made its case publicly and the aura of secrecy is raising even more suspicions. The company did not answer multiple requests for comment.
Analysts, politicians, and economists in Spain have suggested that the economic benefits are not realistic. With several casinos in three different cities, Adelson's company only hired 36,000 people, they say. And besides, the rate of employees per hotel room – a common unit of measurement for Spain's tourism industry – for Adelson's proposal is much smaller than that of Spain's overall average.
At the time, Mr. Reese also acknowledged that any decision will depend on the “flexibility” of authorities as they consider Adelson’s terms. Both the company and Spanish authorities have yet to confirm what incentives are being negotiated, but both have said talks are in advanced stages.
Some of Adelson’s terms have been widely published in the press. They reportedly include tax breaks; social security exceptions; and reforms to anti-smoking, labor, and immigration laws; on top of land concessions and significant public spending in surrounding areas. Some of them violate existing Spanish laws – such as bans on smoking in casinos, gambling by minors and gambling addicts, and money laundering – and exceptions or changes to the laws would require parliamentary approval.
Both Barcelona and Madrid are being considered for the project and both cities made their case in Las Vegas last week. Madrid appears more than willing to make exceptions for Adelson. Its leading regional politicians, aligned with the Spanish government, have insisted they will do anything in their power to win Adelson’s business. All officials admit there is room to negotiate, as long as it’s within the law, but they have been intentionally vague about the specifics of the deal.
Adelson’s demands, or at least the public perception of them, are indeed threatening the EuroVegas project.
“Just because someone offers money doesn’t mean we should do them any favors,” says Xavier Sala i Martín, a well-known Spanish economist and professor of development economics at Columbia University. “The bar should be equality under law. Whatever authorities offer Adelson has to be offered to all companies. Some laws should be changed, indeed, because it’s in better for Spain – but not to attract an investment.”