Playing Outside Nevada: Singapore Picks Sand

News from Singapore was coming up and Las Vegas Sands was ready for the worst.

The casino company learned late Thursday night that the Singaporean government is set to award the right to build a hotel-casino complex in the city-state's Marina district, which could be profitable. So Las Vegas Sands, one of several bidders for the site, wrote two press releases: one announcing victory and the other admitting defeat.

Las Vegas Sands chairman Bill Weidner was ready to distribute the latter.

"We wanted to tell the market that we're still alive and kicking," said Weidner, whose company runs The Venetic.

After receiving a call from Singapore authorities at 2:15 a.m. on Friday morning, Widener told Las Vegas Sands spokesman Ron Reece to destroy all evidence of the concession statement after announcing it had been named one of the fiercest gaming opportunities in years.

The victory gives Las Vegas Sands the right to build a $3.6 billion integrated resort that includes Singapore's first casino.

The Singaporean government began the process of opening its borders to casino gambling two years ago to boost tourism to a small island on the tip of Malaysia. Bidding for a second casino location is scheduled for the fall.

The process has attracted some of the biggest casino operators in the gaming industry, many of whom have partnered in bids with Asian entertainment, convention and retail companies such as Harah's Entertainment and MGM Mirage.

Las Vegas Sands chose to go alone.

"We basically put ourselves forward by saying, 'Here's what we've achieved and here's what we're proposing,'" Weidner said.

In a bid for the Singapore government, Las Vegas Sands said the proposed Marina Bay Sands would include 2,500 hotel rooms, 1.2 million square feet of conference space, 1 million square feet of retail stores and three entertainment venues in addition to casinos.

Singapore's Deputy Prime Minister S. Jayakumar said the proposal would best meet the country's economic and tourism objectives and greatly strengthen the country's position as a leading destination for conventions and exhibitions.

"The (sand) proposal also has a unique design element that will provide Marina Bay with a memorable image," Jayakumar said.

According to the Singapore Tourism Authority, the bidders were rated on four criteria: tourist attraction and contribution, architectural concept and design, development investment, and strengths of each consortium and partner.

Many analysts and observers rated the Las Vegas Sands bid as lagging behind those of rival casino giants Harah's and MGM Miraza. Malaysia-based Genting International PLC also made a bid for a project with Star Cruises Ltd.

In addition, questions have also been raised about Las Vegas Sands' commitment to Singapore. The company operates Sands Macau in China, has plans for nearly two dozen hotel casinos, and is developing Macau's Kotai Strip, a destination called "Las Vegas of Asia." The company is also spending $3 billion to build Venice Macau to anchor Kotai.

After all, Weidner believes the company's track record in Las Vegas and its development plans for China have helped persuade Singaporean leaders to back the bid. The company's experience with convention and exhibition businesses, including conferences and the construction and operation of large convention facilities, has also impressed decision-makers.

"As there were questions, North Asia will be driven by Chinese tourism and South Asia will be driven by visits from other regions," Weidner said. "This will not only create a big footprint in North Asia, but now it will create a huge footprint that will both benefit the economy and visitors."

Weidner said the company's history of building destination resorts may also have been a factor.

"We don't acquire properties. We design and build them from scratch," Weidner said. "I think our capabilities and our performance have helped."

Deutsche Bank gaming analyst Mark Falcon agreed with Widener's valuation in a note to investors on Friday.

"We believe Las Vegas Sands' well-known profile of convention and exhibition businesses played a key role in determining the bid," Falcon said. "With regulations and specifications uncertain, it remains difficult to judge the profitability of the project."

Investors were bullish on Las Vegas Sands after the announcement. Analysts said on the New York Stock Exchange that the company's shares had won most of the week due to profit-taking.

Friday's announcement sent the stock soaring more than 12% when the market opened. By the end of the day, more than 7.5 million shares had traded and the price had risen $5.96, or 9.36%, to close at $69.63.

Weidner said Tuesday that Las Vegas Sands will enter the final design process for Marina Bay Sands. He was not sure when construction would begin. But he said the company would open 100% of the facility sometime in 2009.

"We are having a press conference in Singapore on Tuesday to introduce design consultants and partners," Weidner said. "We have a lot of people."

Singapore's Trade and Industry Minister Lim Hong Kiang said Marina Bay Sands would directly hire them to create 20,000 jobs in other industries.

At the other end of the spectrum, Harrah's and MGM Mirage issued separate statements praising the Singapore government for carrying out a "thorough and detailed process."

However, MGM Mirage made no mention of its rival while Harrer's chairman Gary Loveman celebrated Las Vegas Sands.

Loveman has lavished praise on Singapore, leading some analysts to believe the company will bid for the site of Singapore's second casino on Sentosa Island. Responses to Singapore's request for a proposal for the region are due on Oct. 10.

Bear Stearns game analyst Joe Greff said Haras could downplay Caesars Singapore's offer for Sentosa Island. He believes MGM Mirage will take the development money to Atlantic City and build a project similar to the $7 billion Project City Center planned for Las Vegas.

MGM Mirage spokesman Alan Feldman said the company would not bid on the Sentosa Island site. Harrer's spokesman Alberto Lopez did not comment on the company's plans, and said executives still had time to review options related to Sentosa Island.

Other game companies expected to bid on Sentosa's site include Kurzner International and Isle of Capri Casino. 릴게임