"Milken was largely involved with kick-starting investments in Nevada, which for many years was the fastest-growing state in the United States. Milken funded the gaming industry, newspapers and homebuilders, and among the companies he financed were MGM Mirage, Mandalay Resorts, Harrah's Entertainment and Park Place."
Milken was busy cheating death by overcoming advanced prostate cancer at about the same time his friend and bond client, Sheldon Adelson, was creating the old Sands Exposition Center -- a venue in Las Vegas for Bill Gates to promote the idea of personal computers. More about that later. First we need to understand how money works in this type of business deal.
The Sands hotel was a rather small casino started by Jakie Freedman of Houston, Texas; his partner was Mack Kufferman. According to Marguerite Johnston, when he lived in Houston, Jakie Freedman--a professional gambler who had a huge casino on South Main near where the Astrodome would be built--was the largest depositor at Houston's City National Bank, founded by James E. Elkins, an attorney who was one of the named partners in Vinson and Elkins. Freedman was known to accompany Elkins and his friends, members of the Suite 8-F Crowd, to the Kentucky Derby every year. Governor James Allred once said: "Judge Elkins doesn't practice law, he practices
influence." As proof of that, the Elkins firm would take influence peddler John Connally as a partner of the firm upon his exit from the Governor's mansion in Austin in 1969. Elkins died in 1972.
Now the connection between some of the owners of the Sands Hotel with bankers in Houston, Texas is fascinating, to say the least, especially given the fact that in the mid-1960s, Howard Hughes purchased the hotel and added a 500-room circular tower (pictured below) in 1967.
K.J. EVANS in a Las Vegas Review-Journal article, using the CIA-connected Robert Maheu as his primary source, writes:
In 1966, the Desert Inn rented Hughes its entire top floor of high-roller suites, and the floor below it, for 10 days only. Check-out time came and went, and Hughes didn't move. Moe Dalitz and Ruby Kolod, co-owners of the Desert Inn, were furious. New Year's, one of Las Vegas' busiest holidays, was looming, and the suites had been promised to high rollers. The squeeze was on Maheu.
"Get the hell out of here or we'll throw your butt out," growled Kolod.
"It's your problem," Hughes told Maheu. "You work it out."
Maheu called in a favor from Teamsters Union President Jimmy Hoffa, who phoned the DI boys and asked them to leave "my friends" alone. The reprieve lasted into the new year of 1967, when Maheu told the boss he had played out his options with the DI guys.
"If you want a place to sleep, you'd damned well better buy the hotel," Maheu told Hughes.
To most investors, negotiating a purchase is the means to an end. To Howard Hughes, it was recreation. After months of arduous log-rolling, Hughes and Dalitz agreed on a price of $13.25 million....
The next purchase was the Sands, then a Strip showplace. Dalitz was consulted, and allowed that it "would be a good acquisition." Hughes paid $14.6 million for the Sands, which included 183 acres of prime real estate that would become the Howard Hughes Center. That was followed by two smaller places, the Castaways and the Silver Slipper, then the Frontier. All three had one thing in common, they came with enormous parcels of empty land. He made a deal to buy the Stardust for $30.5 million, but was prevented from closing by the U.S. Securities and Exchange Commission, which was worried about Hughes holding a monopoly on Las Vegas lodging....
"Once he was in both (the gaming and hotel business) he didn't want anyone bigger than he," said Maheu. "That's why he tried to stop Kirk (Kerkorian) from building the big place. But he was not willing to do it at the expense of himself continuing to build, or expanding the ground that he had. It doesn't make sense, but it happens to be the truth. He wanted to be the biggest; he didn't want Del Webb to ever be as big. When he bought a piece of land, he wanted all the land around it. He wanted to control. He would have been very happy to be the biggest if no one got bigger than that."
Kerkorian's International Hotel (now the Las Vegas Hilton) began to rise in early 1968. So did Hughes' anxiety. He announced plans for a $100 million "Super Sands," hoping Kerkorian would flee into the desert at the news. He didn't.
Hughes saw the solution to "the Kerkorian problem" in the Landmark. The tower, a fat concrete cylinder topped with an oversized saucer, rose in the early 1960s, but sat dark most of the decade. Its problem was its design. It had too few rooms, too little casino space. But at 31 stories, it was slightly taller than the International. For that reason, Hughes wanted it.
"A lot of people have given me credit for paying 100 cents on the dollar ($17.3 million) for it." said Maheu. "It wasn't my idea, it was his. He was on a public relations kick at the time." Hughes said he would personally direct planning for the grand opening.
"I knew from that point on that I was in trouble," said Maheu. "He was completely incapable of making decisions."
Kerkorian's camp had announced that the International would open July 2, 1969....
But no one could quell his fear of disease and germs, perhaps his mother's most profound phobia. If Howard sniffled or coughed, he was rushed to a doctor, lavished with attention and sympathy. Allene Gano Hughes saw every playmate as a disease carrier, and discouraged her only son from socializing....
During all his years as a recluse, there were only a handful of people who saw him personally each day. This was the so-called "Mormon Mafia," which took orders from Bill Gay, chief of Hughes' Los Angeles office. Its mission consisted of feeding Hughes occasionally and drugging him regularly.
On Nov. 5, 1970, Hughes was carried from the Desert Inn and put on a jet for the Bahamas. It was, according to Maheu, a coup.
"The reason I know, is that that they tried to get me to join on two occasions," said Maheu.
In April 1976, Hughes died at age 70 aboard a plane en route to Houston, ostensibly of kidney failure. However, his dehydration, malnutrition and the shards of broken hypodermic needles buried in his thin arms suggested other factors.
"If sheer neglect qualifies as a weapon," said Maheu, "they killed him."
Because no Hughes' will was ruled legitimate, his empire was divided among his many cousins. The company, now renamed Summa Corp., finally began to show a profit.
 |
| Kuffernan and Freedman |
influence." As proof of that, the Elkins firm would take influence peddler John Connally as a partner of the firm upon his exit from the Governor's mansion in Austin in 1969. Elkins died in 1972.
“By the 1930s, Judge James A. Elkins was a quiet power in Houston. One of his admirers once said, ‘Judge doesn’t practice law, he practices influence.’…LBJ sometimes lamented the fact that he was often called a ‘tool of the oil industry’ outside of Texas and ‘a wild-eyed liberal’ when he sought campaign funds in some quarters of his own state. The 8-F endorsement would help him, both in votes and in contributions.“Johnson ran for the Senate with full 8-F backing. ‘One of his best fund-raising sessions was held on the top floor of the Kentucky Hotel in Louisville, as the group gathered for their traditional weekend at the Kentucky Derby,’ Dr. [Patrick James] Nicholson wrote.“Judge Elkins was famous for putting a bet on every starter. He had just come out ahead after severe losses in the traditional crap game. When Jet Pilot won, Judge Elkins was so pleased that he gave all his winnings to Herman Brown for the LBJ war chest and promised a substantial contribution as well. Everyone else followed suit. Congressman Johnson became Senator Johnson in the famous eighty-seven-vote win over Coke Stevenson.“ ‘Every year 8-F went to the Kentucky Derby,’ Posh Oltorf said, ‘Jim Abercrombie, Judge Elkins, Jesse Jones, Gus Wortham, Jakie Freedman, George and Herman Brown, Milo Abercrombie, Naurice Cummings, William Smith. They would stay two or three days, and LBJ and Senator Russell and maybe one or two other senators would fly over and join them.’ "
When George and Herman Brown decided to buy the Big-Inch and Little-Inch pipelines from the government after the war, the plan was hatched in Suite 8-F, and all the members were in on it. The legal work was handled by Charles I. Francis of the Vinson and Elkins firm.
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| Augie in later years |
Financing was arranged by August Belmont IV of Dillon Read—no doubt working through contacts with N.M. Rothschild of London to sell the securities. It could have been at the same time that Rothschild's Five Arrows Group acquired an interest in Elkins’ bank, according to the 1976 Report issued by the House of Representatives Committee on Banking and Currency, which was investigating connection in of United States chartered banks to International Banking networks.
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| The Sands, as modified by Howard Hughes |
In 1966, the Desert Inn rented Hughes its entire top floor of high-roller suites, and the floor below it, for 10 days only. Check-out time came and went, and Hughes didn't move. Moe Dalitz and Ruby Kolod, co-owners of the Desert Inn, were furious. New Year's, one of Las Vegas' busiest holidays, was looming, and the suites had been promised to high rollers. The squeeze was on Maheu.
"Get the hell out of here or we'll throw your butt out," growled Kolod.
"It's your problem," Hughes told Maheu. "You work it out."
Maheu called in a favor from Teamsters Union President Jimmy Hoffa, who phoned the DI boys and asked them to leave "my friends" alone. The reprieve lasted into the new year of 1967, when Maheu told the boss he had played out his options with the DI guys.
"If you want a place to sleep, you'd damned well better buy the hotel," Maheu told Hughes.
To most investors, negotiating a purchase is the means to an end. To Howard Hughes, it was recreation. After months of arduous log-rolling, Hughes and Dalitz agreed on a price of $13.25 million....
The next purchase was the Sands, then a Strip showplace. Dalitz was consulted, and allowed that it "would be a good acquisition." Hughes paid $14.6 million for the Sands, which included 183 acres of prime real estate that would become the Howard Hughes Center. That was followed by two smaller places, the Castaways and the Silver Slipper, then the Frontier. All three had one thing in common, they came with enormous parcels of empty land. He made a deal to buy the Stardust for $30.5 million, but was prevented from closing by the U.S. Securities and Exchange Commission, which was worried about Hughes holding a monopoly on Las Vegas lodging....
"Once he was in both (the gaming and hotel business) he didn't want anyone bigger than he," said Maheu. "That's why he tried to stop Kirk (Kerkorian) from building the big place. But he was not willing to do it at the expense of himself continuing to build, or expanding the ground that he had. It doesn't make sense, but it happens to be the truth. He wanted to be the biggest; he didn't want Del Webb to ever be as big. When he bought a piece of land, he wanted all the land around it. He wanted to control. He would have been very happy to be the biggest if no one got bigger than that."
Kerkorian's International Hotel (now the Las Vegas Hilton) began to rise in early 1968. So did Hughes' anxiety. He announced plans for a $100 million "Super Sands," hoping Kerkorian would flee into the desert at the news. He didn't.
Hughes saw the solution to "the Kerkorian problem" in the Landmark. The tower, a fat concrete cylinder topped with an oversized saucer, rose in the early 1960s, but sat dark most of the decade. Its problem was its design. It had too few rooms, too little casino space. But at 31 stories, it was slightly taller than the International. For that reason, Hughes wanted it.
"A lot of people have given me credit for paying 100 cents on the dollar ($17.3 million) for it." said Maheu. "It wasn't my idea, it was his. He was on a public relations kick at the time." Hughes said he would personally direct planning for the grand opening.
"I knew from that point on that I was in trouble," said Maheu. "He was completely incapable of making decisions."
Kerkorian's camp had announced that the International would open July 2, 1969....
But no one could quell his fear of disease and germs, perhaps his mother's most profound phobia. If Howard sniffled or coughed, he was rushed to a doctor, lavished with attention and sympathy. Allene Gano Hughes saw every playmate as a disease carrier, and discouraged her only son from socializing....
During all his years as a recluse, there were only a handful of people who saw him personally each day. This was the so-called "Mormon Mafia," which took orders from Bill Gay, chief of Hughes' Los Angeles office. Its mission consisted of feeding Hughes occasionally and drugging him regularly.
On Nov. 5, 1970, Hughes was carried from the Desert Inn and put on a jet for the Bahamas. It was, according to Maheu, a coup.
"The reason I know, is that that they tried to get me to join on two occasions," said Maheu.
In April 1976, Hughes died at age 70 aboard a plane en route to Houston, ostensibly of kidney failure. However, his dehydration, malnutrition and the shards of broken hypodermic needles buried in his thin arms suggested other factors.
"If sheer neglect qualifies as a weapon," said Maheu, "they killed him."
Because no Hughes' will was ruled legitimate, his empire was divided among his many cousins. The company, now renamed Summa Corp., finally began to show a profit.
Mrs. Howard Hughes, Sr. before her marriage was Allene Gano, and her closest relative was a sister, Annette, who married Dr. Fred Lummis. Dr. Lummis' mother had been born Minnie Rice, daughter of Frederick A. Rice, from an old established family in Houston closedly related to William S. Farish, one of the most important founders of Humble Oil Company, which eventually became Exxon. Howard Hughes, Jr.'s "cousins" mentioned above--who inherited his properties and control of his foundation when he was officially declared dead in 1976--were these Texans related to the Rice family, and primarily consisted of Annette's son, William Rice Lummis, an attorney and partner at Andrews, Kurth, the law firm which controlled the Hughes Tool drill bit patent. Lummis became chairman of Summa Corporation and moved to Las Vegas where he supervised the operation of the Hughes companies, including the medical research foundation he had set up for his cousin before his death.
***
All this brings us back to Newt Gingrich and Sheldon Adelson.
Thanks to Michael Milken's junk bonds, Kirk Kerkorian (MGM) had the funds to buy the Sands in 1988, transferring these funds to the beneficiaries of Hughes' estate. Then, only seven months later in 1989 the old hotel was purchased from Kerkorian by Sheldon Adelson's holding company, the Interface Group. According to Jeff Burbank in License to Steal: Nevada's Gaming Control System in the Megaresort Age, Adelson had a 58.8% interest in the holding company, and five other men involved in his businesses each had less than 15%.
Thanks to Michael Milken's junk bonds, Kirk Kerkorian (MGM) had the funds to buy the Sands in 1988, transferring these funds to the beneficiaries of Hughes' estate. Then, only seven months later in 1989 the old hotel was purchased from Kerkorian by Sheldon Adelson's holding company, the Interface Group. According to Jeff Burbank in License to Steal: Nevada's Gaming Control System in the Megaresort Age, Adelson had a 58.8% interest in the holding company, and five other men involved in his businesses each had less than 15%.
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| The Milken Connection to Sheldon Adelson and The Sands |
A FRESH STACK OF CHIPS
Adelson bet on conventions just as that market exploded in Vegas. If the same happens in Macau, there's a pile to be made away from the tables there as well.
GAMBLING BIG ON MACAUBy Rik KirklandFortune, 10/17/2005, Vol. 152, Issue 8
Sheldon Adelson has made billions of dollars by seeing things others do not. But even he was stumped three years ago [2002] when he first laid eyes on the real estate that Chinese officials were offering him to build a new casino in Macau. "It's very nice, very picturesque," he thought. "But it's underwater! They've relegated me to the boonies!"
Like every other bigtime casino developer, he was well aware of Macau's potential: The former Portuguese colony south of Hong Kong is the only place in the Chinese-speaking world where betting is legal. It's located a short drive or plane ride away from a billion-plus Chinese--who, by the way, are the world's most ferocious gamblers. But out here? On a future landfill project several miles from the crowded downtown peninsula where the action had always been?
Still, the more Adelson thought about it, the more he became convinced that he had spotted something glittering beneath the blue water of the South China Sea. More than glittering: a gold mine. A bustling gambling boomtown. "What I saw was as plain as the nose on my face," he says.
And so he dove in. To grab a beachhead, learn the ropes, and--not the least of it--make some money, Adelson first cut a deal with the Chinese government to erect his "temporary casino." The $265 million Sands, a gleaming Vegas-style palace, opened downtown near the ferry terminal in May 2004. The traffic is so high--40% of the 16 million people who visited Macau in 2004 passed through here, according to the research firm CLSA--and the action so intense that Adelson recouped his initial investment in 12 months.
In the year ahead the gambling operation at the Sands is on track to generate north of $320 million in pretax cash flow. That's more than Adelson made last year from the 4,000 hotel rooms and the restaurants, showrooms, shops, gaming tables, and slots at his highly profitable Las Vegas flagship, the Venetian.
But the real money spinner, Adelson believes, will be on that lonely expanse of freshly poured landfill. It's the only spot in Macau--the most densely populated place on earth--with enough room for what Adelson has in mind: a brand-new Chinese Vegas, complete with a long boulevard of casinos, hotels, shops, deluxe theaters, the works. The first big development on the Cotai Strip (the name was concocted from Coloane and Taipa, the two former islands that border it) is Adelson's $2 billion Venetian Macau, now under construction. It will boast the world's biggest casino (some 600,000 square feet of gambling space, about five times the size of your state-of-the-art Vegas gaming floor), 3,000 hotel rooms, acres of pools, 850,000 square feet of shopping, a 15,000-seat showroom, and a 1.2-million-square-foot convention center. Beyond that, Adelson intends to invest another $2 billion or so to put up hotel-mall-casino complexes that will open alongside the Venetian around the end of 2007 and be run by leading hotel operators, such as Four Seasons and Shangri-La. (He will retain control of their showrooms and casinos.) And although it took at least 30 years for Vegas to become Vegas, he figures it'll take about five for Cotai to become Asia's--and thus the world's--biggest gambling and entertainment mecca.
ODDS ARE you've never heard of Sheldon Adelson, 72, chairman and CEO of Las Vegas Sands Corp. (You may not even be too sure about Macau--except maybe as one of the locales in the James Bond movie The Man With the Golden Gun.) In the creation myth of modern Las Vegas, mobsters Meyer Lansky and Bugsy Siegel get credit for building it. Then comes Steve Wynn, 63, the dashing dream merchant who reinvented Vegas as an adult Disneyland by developing the casino-as-destination--places like the Mirage, Treasure Island, and the Bellagio. A low-profile newcomer, Adelson didn't even own a casino until 1989. But within the industry, he's known as the man who, more than anyone, made Vegas boom as a destination for conventioneers and business travelers--a less sexy but even more lucrative market. He's right up there in the pantheon alongside Wynn. But unlike Wynn, the pugnacious Adelson isn't trying out for the role of industry statesman.
"I was never part of the old-boy network," he says. "I wasn't swaddled in green felt cloth."
And there are a few other things Sheldon Adelson would like you to know. First, this whole recreating-the-Vegas-Strip-in-Macau thing is going to be far bigger than anything he's ever done before. "I've never been involved in something like this," he says. "I don't know of any entrepreneur who has."
It was his idea: "It was my dream. My vision. When I laid it out for [Macau's chief executive] Edmund Ho, he said, 'If you do this, you will put us ahead 20 years.' "
And it cannot fail: "This is the best bet I've ever made in my life--the best. It's a no-risk, no-brainer bet."
COMMAND CENTRAL of Adelson's empire is a sunlit, spacious, but sparely furnished office on the third floor of the Venetian hotel, right on the Vegas Strip. Part of one long wall holds blow-up pictures of his family: his second wife, Miriam, an Israeli internist whom he married in 1991 (her specialty is treating drug addicts), and their two young sons.
Closer to his oval-shaped working table hangs his gallery of fame--some 25 magazine covers, mostly from the likes of Computer Reseller News, Casino Journal, Travel Agent, Meeting & Conventions, Expo, and other trade publications. They capture the decidedly non-glitzy career that propelled him into the celebrity- and power-laden world he now occupies, a world reflected in the photos on the wall across the room: Sheldon (and Miriam) with George Bushes 41 and 43, with Ariel and Bibi, with Rudy and Arnold, and with other notables.
We're lunching at his table, and I'm wrestling with first impressions. Pale, balding, a barrel-chested 5-foot-7, Adelson has been plagued for the past four years by plexitis, a rare nerve inflammation that has temporarily left him unable to walk. (He gets around in a motorized chair and uses a walker for short distances.) Taking two unaided steps, he observes, "That's the most I've done in a long time," but then insists that through daily physical therapy he's going to lick this thing. He dotes on Miriam and her two grown daughters by a first marriage; they wander in and out of our meetings. He tells some touching stories about his father and a fascinating tale about going bust in his late 30s and getting depressed. Contemplating people jumping out of buildings, he looked out the window of his Boston estate, imagined himself "lying scratched in the shrubbery," laughed at his self-pity, and got back to work. The force of his personality has long since dispelled any notion of frailty.
As lunch wraps up, Adelson is getting increasingly frustrated. He wants to show me what he's doing in Cotai, and no one can find the right map. Aides rush in and out. Are we about to witness an explosion? No. An assistant walks in with a cup of forbidden ice cream. (Miriam has been getting him to improve his diet.) He smiles, says thanks, and lifting his spoon, looks over at me with a smile: "Like the little boy said, 'I can resist anything except temptation.' "
I've heard too many stories about Adelson the over-the-top battler to doubt that reality. But the truth, as usual, is more complicated. Is he a tough, demanding boss with a healthy ego? Yes, but he's not driven by Trump-like self-absorption so much as by a desire to get things done yesterday. "My objective," he says, "is singular: Win." He has had a loyal team around him for years. He can be funny and charming. (Accused of being a micromanager, he replies, "My job now is producing strategy. They lock me in a room at nine in the morning, give me a Ouija board and a crystal ball, feed me lunch through the mail slot--I insist on a hot lunch!--and at five o'clock they unlock the door and say, 'Okay, where's your vision for the day?'")
Most of all, what I'm struck by is the truth of something real estate investor Tom Barrack of Colony Capital told me before I flew out to Vegas: "This company runs above all else on the stupendous size of one man's gut."
LIKE MANY golden guts, this one started out hungry. Adelson grew up in a poor Jewish neighborhood near Boston, where his Lithuanian immigrant father drove a cab and his mother (her parents were from Ukraine) ran a knitting shop in the living room. He got beaten up as a kid by the Irish from South Boston; sold newspapers and ran his own business, the Vend-a-Bar candy company, while still in high school; skipped college to learn a trade (court reporting) before serving in the Army; moved rapidly through a series of jobs as an executive assistant, ad salesman, investment advisor; and finally emerged in his late 30s as a low-tech venture capitalist with a $5 million net worth. Still, there was little to suggest that Adelson would ever become anything more than another successful, small-time multimillionaire.
But five decades of hard-knock entrepreneurship taught him a couple of key lessons. Unlike a certain type of company founder who feels he is born to launch only a biotech or a publishing or a software firm, Adelson early on figured out that for him the bottom line on building a company was, well, the bottom line. On a road show in the mid-1990s to raise money to build his first hotel, an analyst asked what the theme of his new place would be. "How about 'making money'?" Adelson replied. "Where does it say in the Bible 'Thou shalt have a theme' when you build a Vegas hotel?" (Later, at Miriam's suggestion, he settled on Venice, where they had gone on their honeymoon.) "I've started more than 50 businesses," Adelson says. "For me, businesses are like buses. You stand on a corner and you don't like where the first bus is going? Wait ten minutes and take another. Don't like that one? They'll just keep coming. There's no end to buses or businesses."
By the late 1970s Adelson had developed a clear vision of what all successful businesses have in common--and more important, a growing belief in his own knack for spotting such opportunities. Call them Adelson's Rules: "It isn't enough to have a good product. The most important thing is to understand the direction of the industry." And "Study any industry, and you inevitably hear two things: 'I've always done it this way,' or 'Everybody does it this way.' When you hear that, know there's an opportunity to do something different and add value."
Adelson's first big score came as he approached 50. He had gotten a whiff in the late 1970s of an industry changing direction:
Bringing Comdex to Las Vegas generated another big contrarian insight: The town's establishment, by focusing mainly on drawing high rollers and Middle Americans out for a few nights on the wild side, was missing a huge opportunity. Why not lure even more conventions and corporate meetings to Fun City? The suits would fill the hotels and casinos from Sunday to Thursday, while leisure travelers would pile in on weekends.
In 1989, Adelson paid $128 million for the old Sands hotel, the only place in town with enough room to build what he was really after--America's largest private exhibition center. This approach is now conventional wisdom in Vegas, which welcomed fewer than 300 conventions in 1970 and today hosts more than 4,000 a year. But when he first built his 1.2-million-square-foot Sands Exposition Center, it was revolutionary. "What Sheldon did by seeing what the convention center could do for the hotel was unique in my 30 years of doing business in Vegas," says Michael Milken, who raised junk bonds to finance the deal.
A few years later Adelson concluded that he could use his rising tide of business travelers to fill a far larger, all-suites resort. So once again he rolled the dice.
He blew up the Sands, sold Comdex in 1995 to Japan's Masayoshi Son for $862 million, borrowed up to his eyeballs, and at age 66 opened his first luxury hotel, the $1.5 billion Venetian, across the Strip from Steve Wynn's Bellagio.
"People didn't just think I was nuts--they knew I was nuts!" Adelson recalls. Today the Venetian is consistently the first- or second-most-profitable hotel in Vegas, with the first- or second-highest occupancy rate--alongside the Bellagio.
Even as he built his fortune, Adelson's combativeness--especially when he feels wronged--maintained his outsider status. The man can hold a grudge the way Dean Martin held liquor, and he's got tenacity to match. He engaged in a bitter fight with the Culinary Workers to win the right to open the Venetian in 1999 as a non-union shop, which didn't go down well in this strong union town. Later he battled the construction company Bovis for half a decade over costs at the Venetian. Most of all, he has fought with Steve Wynn--his next-door rival in Vegas and the other foreigner with casino rights in Macau.
In those verbal duels, Wynn deploys a rapier; it's sharp but so smooth you barely feel it going in. "I took the long-term view and decided not to compromise the brand by confusing people," says Wynn, whose $1.1 billion copper-sheathed twin of his new $2.7 billion Wynn Las Vegas won't open in downtown Macau until mid-2006. "It was costly in the sense that you could've done something like the Sands and made $300 million or $400 million more. But I'm not there for that kind of money. By having the discipline to wait and make sure we expand, enrich, and deepen the market by delivering a higher-quality building, a higher quality of service, we'll be rewarded with a better reputation."
That kind of talk exasperates Adelson, who wields the rhetorical equivalent of a lead pipe. "Wynn is very good at creating mystique," he says. "He's in it for fun and design gratification. My creativity extends to matching my tie to my suit. But I'm very good at making money, and that's what an economic enterprise is all about. I'm simply a much better businessman."
On this, the points on the scoreboard back up Adelson. Based on his 86% ownership of the Las Vegas Sands, which he finally took public last December in one of the year's hottest IPOs, Adelson today has a net worth of more than $10 billion, which makes him much richer than Wynn (whose estimated fortune is just under $2 billion). His company also plays in a different league. With only two casino properties and one expo center, some 11,000 employees, and projected annual revenues of roughly $2 billion next year, Las Vegas Sands enjoys an $11 billion market capitalization, which is more than twice as big as Wynn's and just behind that of the two much larger, merger-fattened industry giants: Harrah's and MGM Mirage.
Which brings us back to Macau, where, if Adelson is right, the biggest bus of his career is about to barrel into his stop.
IT'S A SAFE BET THAT Broken Tooth Koi isn't reading Austrian economists these days. Koi, a notorious Macau mobster, helped lead a 1930s-style gangland war during the run-up to Macau's handover by Portugal in 1999. More than 30 people were killed in the fighting among the triads, criminal secret societies with deep roots in China. (One of the great moments in PR: A police official reassured wary tourists by noting that the city had "professional killers who don't miss their targets.") The arrest of Koi, a notorious triad kingpin who was sent to prison for 15 years, signaled that Beijing was in charge and that Macau's Dodge City phase was over.
But if Koi wants to grasp why Macau will look so radically different when he gets sprung a decade from now, then Joseph Schumpeter's famous concept of "creative destruction" provides the answer. That's the process the Communist Party has repeatedly unleashed in recent years by inviting foreign capitalists to spur innovation--and inspire local champions--in industries ranging from semiconductors to autos to big-box retailing.
Now it's gambling's turn.
Until the Americans appeared, the standard in Macau had been set by Stanley Ho Hung-sun, an 83-year-old homegrown multibillionaire who for 40 years held the local monopoly on gambling--and who also owns the ferry, the largest department store, a bank, luxury hotels, acres of real estate, and stakes in the local airline, airport, racetrack, and TV station. That empire, which generates two-thirds of Macau's tax revenue, explains why no one was shocked that the old lion landed one of the government's three new gaming concessions.
At Ho's flagship Lisboa, low-ceilinged VIP rooms that cater exclusively to "whales" (high rollers) are sprinkled along winding hallways that vibrate with enough glass, jade, colored tiles, pink and black marble, and twinkling lights to make St. Vitus jitterbug. The place hasn't changed in years. In many of these rooms and others like them, triads still extend--and collect--credit, an important function, since the legal limit for bringing in currency from the mainland, $5,000, is about the minimum bet in such spots.
But to meet the new competition, even Ho has been forced to play a new game. Across the Avenida da Amizade, near where Wynn's place is rising, MGM Mirage has begun building a 600-room, $1 billion resort-casino in a joint venture with Ho's daughter Pansy. Behind the Lisboa is a hole in the ground where Ho is erecting a more lavish whale catcher, the Lisboa Grand. Down by the Sands, construction is well along on his new Fisherman's Wharf joint venture--a mass- market attraction that will feature replicas of the Forbidden City, a Portuguese fort, a Colosseum, a giant volcano ride, and of course lots of gaming tables and slots.
How big can the market get? This year Macau will surpass the Vegas Strip and generate more than $6 billion in gambling revenue. That's with 1,400 gaming tables and just under 10,000 hotel rooms (vs. 2,600 tables and 135,000 hotel rooms in all of Las Vegas). Aaron Fischer, an analyst at CLSA, projects Macau's gambling revenue could top $12 billion by 2010, as the number of tables rises to 4,000 and hotel rooms roughly triple. By then Macau could be attracting 37 million visitors a year (up from ten million in 2003)--about the traffic Vegas draws today. If all goes as planned, this mostly Chinese crowd will also be sticking around longer (the average overnight stay in Macau today is barely one night, vs. nearly four in Vegas) and spending a lot more on shopping, eating, and shows. To grease this red-hot engine, the government is spending billions on infrastructure, including a second ferry terminal and a new light-rail system. Later this fall should come the biggest announcement yet: a $4 billion, 18-mile bridge that will link Macau, the mainland, and Hong Kong's Lantau Island, where the new Disneyland just opened to overflow crowds.
The bedrock of this market's bright future, everyone agrees, is the Chinese passion for gambling. Last year, with just 4% of the slot machines in Vegas and 40% of the gaming tables, Macau generated roughly the same gambling revenue. (That also reflects the difference in risk-taking propensity between a market currently reliant on high-rolling whales and one dominated by blue-haired ladies pulling slots.) What explains this intensity? You hear the same answers again and again--luck is a central concept in Chinese culture; look at all the ways they try to shape and discern fate through lucky numbers, feng shui, I Ching, and the like. (Navigating a street near the Lisboa, I'd nearly tripped over a woman who had arranged a roast pig, a raw chicken, flowers, and an urn of burning incense outside a new jewelry store--offerings for a truly grand opening?) But until you walk into a place like the Sands, you can't fully grasp what one Asia hand told me: "The difference between Westerners and the Chinese is that for Westerners gambling is about entertainment and calculating probabilities. For the Chinese it's a battle with destiny."
THE SANDS BUZZES with a good vibe on a Saturday night. Its cavernous main floor is stuffed with baccarat tables, the game the Chinese favor. Here the typical minimum is just $40. The goal in baccarat is to see who gets closest to nine (face cards and tens count as zero) with a maximum of three cards. At the first table, I watch what I assume is one player's unique style. While the dealer waits, he's slowly peeling back the corner of one card until…ahhh, the eight of clubs. He then repeats this ritual with his second card. Hardly anyone drinks anything stronger than the tea served up in highball glasses from carts pushed by ladies in brown and gold Mao jackets. But you could cut the cigarette smoke with a bent Jack of diamonds. I watch for a few minutes. Suddenly I look up and realize the exact same battle with destiny, including the card-bending routine, is going on at every table. There's nothing like this in Vegas.
The only real debate about Macau's future is over how quickly the market evolves. Skeptics think the new boys are getting way ahead of themselves. "This is not Las Vegas; Asians want to gamble, not go shopping or see Celine Dion shows," insists Anthony Carter, a Brit who's spent 35 years in the region and is CEO of Hong Kong's Galaxy casino group, itself a recent arrival in Macau. "That will come in due course. But right now I just don't see that the demand for these new facilities the Americans are building will meet the cost."
To which both Adelson and Wynn--and here we finally discover a point they can agree on--reply, Nonsense. "To look at the high level of shopping and consumer taste in Shanghai and Hong Kong and still suggest that the Chinese won't care about luxury is a ridiculous denial of reality," says Wynn. "The transformation of Macau in the next 60 months will be the most remarkable metamorphosis in modern history." Told that Galaxy's Carter believes the correct "Asian price point" for a hotel room is under $100, Adelson snorts, "I'm going to have five price points in Cotai! I want the mass market and the high-roller market. My target is to maximize every opportunity." That includes MICE--as in meetings, incentives, conventions, exhibitions (a.k.a., the group-travel business). "My guy just came back from ten days on the mainland checking out the MICE market," Adelson continues. "The words he kept using were 'mind-blowing' and 'blown away.' It's like a firecracker. They've lit the fuse, and it's ready to explode."
What's also certain to explode is the Cotai Strip, whose virtues Adelson has championed louder and longer than anyone. Among the prominent recent converts: Stanley Ho. Ho's youngest son, Lawrence, heads a new family joint venture with Australia's richest man, Kerry Packer. Ho and Packer's project in Cotai, the $1 billion City of Dreams, will be designed very much with Adelson in mind. Rather than go "head to head" with the neighboring Venetian, Lawrence has dropped a convention center and large retail complex from his original master plan to focus on building "a special casino" that will sit beneath a giant aquarium.
"In conventions, Sheldon Adelson is the master," Lawrence Ho says.
"Why would we want to compete with him?" Wynn told me he too will soon be announcing plans to add to his Macau stake with some major new projects in Cotai.
Might there be something a bit bubbleicious about this stampede--which is driving property prices into the stratosphere and causing labor shortages and infrastructure bottlenecks? Maybe. There's also the "anchovy theory" espoused by a top American financier with China experience. "In a Caesar salad," he warned me right before I flew out to Macau, "the anchovy is the first thing to get chopped up. That's what we foreigners are in China: the anchovy." The major blow would come if gambling, which was everywhere in China until the Communists took over in 1949 and promptly banned it (along with prostitution, private property, and other capitalist vices), were suddenly made legal on the mainland. But that strikes most analysts as a bridge too far for the current leadership, who seem happy for now with a dynamic, growing, cleaned-up Macau. The more pressing problem is the kind of regulatory confusion that has swirled up in a recent dispute between Adelson and one erstwhile partner, Hong Kong's Regal Hotels group. Regal is now petitioning the government to develop a site that Adelson claims as his own. He says he's "completely certain" he will prevail.
At our final dinner Adelson waves a hand to dismiss once and for all the "naysayers" I keep bringing up who question his vision. He then mentions he'd just that day seen a June 1955 Life magazine cover. Over a photo of showgirls ran this headline: "Las Vegas: Is the Boom Overextended?" Point taken. We're not talking, after all, about the late, great Internet boom, where a Pets.com or Webvan spent billions to meet needs no one had. We're talking about investing multiples of that to soak up travel dollars and leisure spending in the middle of the richest region in the fastest-growing part of the world. Barring catastrophe--war in the Taiwan Straits, some horrific new plague--how can it not work?
IN THE YEARS AHEAD, Adelson expects to put a lot of miles on his personal Boeing 767. (He upgraded earlier this year from a 737, and now that he's public, only charges the Las Vegas Sands for the cost of a first-class ticket.) Beyond Macau, gambling seems set to go global--just as it exploded out of Nevada and across the U.S. Singapore, Thailand, Britain, and Korea are among the countries that once banned casinos and are now either taking bids on new concessions or considering doing so. Like his rivals, Adelson is chasing hard after every opening.
What drives a guy entering his eighth decade to place the biggest bet of his career? Adelson's old friend Mike Milken answers by putting him in context with other aging megamoguls he's known. "I didn't even meet Dr. Armand Hammer until he was 80," says Milken, "and we raised more capital for him after that than we did for anyone in the world. John Kluge was 70 when we did the biggest financing ever up until then so he could take his firm private. Kirk Kerkorian just did the biggest deal of his life at 87." That's the kind of eternally energetic, entrepreneurial company Adelson has bulled his way into.
One last thing: Despite his congenital focus on the bottom-line, Adelson is playing for more than just the bucks. What he's really burning for is a little credit. Does he feel he doesn't get enough acknowledgment, certainly compared to Wynn, for his role in reinventing the business model in Vegas? "Absolutely." Does he worry the same thing could happen again in Macau? Damn right. "Nobody had ever thought of recreating Las Vegas in Cotai," he says. "Nobody. They all decried it. Ho and Wynn dismissed it. Now they're all coming out of the woodwork to be part of it." So take a note, you future historians: Mr. Sheldon Adelson respectfully requests that you put this caption next to his photo: The Man Who Built the Las Vegas Strip--in China. If he delivers on all or even most of what he's promised, he deserves it.
But five decades of hard-knock entrepreneurship taught him a couple of key lessons. Unlike a certain type of company founder who feels he is born to launch only a biotech or a publishing or a software firm, Adelson early on figured out that for him the bottom line on building a company was, well, the bottom line. On a road show in the mid-1990s to raise money to build his first hotel, an analyst asked what the theme of his new place would be. "How about 'making money'?" Adelson replied. "Where does it say in the Bible 'Thou shalt have a theme' when you build a Vegas hotel?" (Later, at Miriam's suggestion, he settled on Venice, where they had gone on their honeymoon.) "I've started more than 50 businesses," Adelson says. "For me, businesses are like buses. You stand on a corner and you don't like where the first bus is going? Wait ten minutes and take another. Don't like that one? They'll just keep coming. There's no end to buses or businesses."
By the late 1970s Adelson had developed a clear vision of what all successful businesses have in common--and more important, a growing belief in his own knack for spotting such opportunities. Call them Adelson's Rules: "It isn't enough to have a good product. The most important thing is to understand the direction of the industry." And "Study any industry, and you inevitably hear two things: 'I've always done it this way,' or 'Everybody does it this way.' When you hear that, know there's an opportunity to do something different and add value."
Adelson's first big score came as he approached 50. He had gotten a whiff in the late 1970s of an industry changing direction:
Computers were starting to go personal, and sales were shifting from direct salesforces to new third-party channels. "It was a very, very strong fragrance," he says. "It smelled to me like the early auto industry, where no company had the scale to set up national distribution, so they invented a distribution system called dealers."His idea for breaking the industry pattern: Start an independent trade show to bring together buyers and sellers at a time when only industry trade associations ran such things. He launched Comdex (for Computer Dealers Exposition) in Vegas in December 1979. Comdex exploded from 157 exhibitors and 4,000 attendees that year to 2,200 exhibitors and 225,000 attendees by the mid-1990s.
Bringing Comdex to Las Vegas generated another big contrarian insight: The town's establishment, by focusing mainly on drawing high rollers and Middle Americans out for a few nights on the wild side, was missing a huge opportunity. Why not lure even more conventions and corporate meetings to Fun City? The suits would fill the hotels and casinos from Sunday to Thursday, while leisure travelers would pile in on weekends.
In 1989, Adelson paid $128 million for the old Sands hotel, the only place in town with enough room to build what he was really after--America's largest private exhibition center. This approach is now conventional wisdom in Vegas, which welcomed fewer than 300 conventions in 1970 and today hosts more than 4,000 a year. But when he first built his 1.2-million-square-foot Sands Exposition Center, it was revolutionary. "What Sheldon did by seeing what the convention center could do for the hotel was unique in my 30 years of doing business in Vegas," says Michael Milken, who raised junk bonds to finance the deal.
A few years later Adelson concluded that he could use his rising tide of business travelers to fill a far larger, all-suites resort. So once again he rolled the dice.
He blew up the Sands, sold Comdex in 1995 to Japan's Masayoshi Son for $862 million, borrowed up to his eyeballs, and at age 66 opened his first luxury hotel, the $1.5 billion Venetian, across the Strip from Steve Wynn's Bellagio.
"People didn't just think I was nuts--they knew I was nuts!" Adelson recalls. Today the Venetian is consistently the first- or second-most-profitable hotel in Vegas, with the first- or second-highest occupancy rate--alongside the Bellagio.
Even as he built his fortune, Adelson's combativeness--especially when he feels wronged--maintained his outsider status. The man can hold a grudge the way Dean Martin held liquor, and he's got tenacity to match. He engaged in a bitter fight with the Culinary Workers to win the right to open the Venetian in 1999 as a non-union shop, which didn't go down well in this strong union town. Later he battled the construction company Bovis for half a decade over costs at the Venetian. Most of all, he has fought with Steve Wynn--his next-door rival in Vegas and the other foreigner with casino rights in Macau.
In those verbal duels, Wynn deploys a rapier; it's sharp but so smooth you barely feel it going in. "I took the long-term view and decided not to compromise the brand by confusing people," says Wynn, whose $1.1 billion copper-sheathed twin of his new $2.7 billion Wynn Las Vegas won't open in downtown Macau until mid-2006. "It was costly in the sense that you could've done something like the Sands and made $300 million or $400 million more. But I'm not there for that kind of money. By having the discipline to wait and make sure we expand, enrich, and deepen the market by delivering a higher-quality building, a higher quality of service, we'll be rewarded with a better reputation."
That kind of talk exasperates Adelson, who wields the rhetorical equivalent of a lead pipe. "Wynn is very good at creating mystique," he says. "He's in it for fun and design gratification. My creativity extends to matching my tie to my suit. But I'm very good at making money, and that's what an economic enterprise is all about. I'm simply a much better businessman."
On this, the points on the scoreboard back up Adelson. Based on his 86% ownership of the Las Vegas Sands, which he finally took public last December in one of the year's hottest IPOs, Adelson today has a net worth of more than $10 billion, which makes him much richer than Wynn (whose estimated fortune is just under $2 billion). His company also plays in a different league. With only two casino properties and one expo center, some 11,000 employees, and projected annual revenues of roughly $2 billion next year, Las Vegas Sands enjoys an $11 billion market capitalization, which is more than twice as big as Wynn's and just behind that of the two much larger, merger-fattened industry giants: Harrah's and MGM Mirage.
Which brings us back to Macau, where, if Adelson is right, the biggest bus of his career is about to barrel into his stop.
IT'S A SAFE BET THAT Broken Tooth Koi isn't reading Austrian economists these days. Koi, a notorious Macau mobster, helped lead a 1930s-style gangland war during the run-up to Macau's handover by Portugal in 1999. More than 30 people were killed in the fighting among the triads, criminal secret societies with deep roots in China. (One of the great moments in PR: A police official reassured wary tourists by noting that the city had "professional killers who don't miss their targets.") The arrest of Koi, a notorious triad kingpin who was sent to prison for 15 years, signaled that Beijing was in charge and that Macau's Dodge City phase was over.
But if Koi wants to grasp why Macau will look so radically different when he gets sprung a decade from now, then Joseph Schumpeter's famous concept of "creative destruction" provides the answer. That's the process the Communist Party has repeatedly unleashed in recent years by inviting foreign capitalists to spur innovation--and inspire local champions--in industries ranging from semiconductors to autos to big-box retailing.
Now it's gambling's turn.
Until the Americans appeared, the standard in Macau had been set by Stanley Ho Hung-sun, an 83-year-old homegrown multibillionaire who for 40 years held the local monopoly on gambling--and who also owns the ferry, the largest department store, a bank, luxury hotels, acres of real estate, and stakes in the local airline, airport, racetrack, and TV station. That empire, which generates two-thirds of Macau's tax revenue, explains why no one was shocked that the old lion landed one of the government's three new gaming concessions.
At Ho's flagship Lisboa, low-ceilinged VIP rooms that cater exclusively to "whales" (high rollers) are sprinkled along winding hallways that vibrate with enough glass, jade, colored tiles, pink and black marble, and twinkling lights to make St. Vitus jitterbug. The place hasn't changed in years. In many of these rooms and others like them, triads still extend--and collect--credit, an important function, since the legal limit for bringing in currency from the mainland, $5,000, is about the minimum bet in such spots.
But to meet the new competition, even Ho has been forced to play a new game. Across the Avenida da Amizade, near where Wynn's place is rising, MGM Mirage has begun building a 600-room, $1 billion resort-casino in a joint venture with Ho's daughter Pansy. Behind the Lisboa is a hole in the ground where Ho is erecting a more lavish whale catcher, the Lisboa Grand. Down by the Sands, construction is well along on his new Fisherman's Wharf joint venture--a mass- market attraction that will feature replicas of the Forbidden City, a Portuguese fort, a Colosseum, a giant volcano ride, and of course lots of gaming tables and slots.
How big can the market get? This year Macau will surpass the Vegas Strip and generate more than $6 billion in gambling revenue. That's with 1,400 gaming tables and just under 10,000 hotel rooms (vs. 2,600 tables and 135,000 hotel rooms in all of Las Vegas). Aaron Fischer, an analyst at CLSA, projects Macau's gambling revenue could top $12 billion by 2010, as the number of tables rises to 4,000 and hotel rooms roughly triple. By then Macau could be attracting 37 million visitors a year (up from ten million in 2003)--about the traffic Vegas draws today. If all goes as planned, this mostly Chinese crowd will also be sticking around longer (the average overnight stay in Macau today is barely one night, vs. nearly four in Vegas) and spending a lot more on shopping, eating, and shows. To grease this red-hot engine, the government is spending billions on infrastructure, including a second ferry terminal and a new light-rail system. Later this fall should come the biggest announcement yet: a $4 billion, 18-mile bridge that will link Macau, the mainland, and Hong Kong's Lantau Island, where the new Disneyland just opened to overflow crowds.
The bedrock of this market's bright future, everyone agrees, is the Chinese passion for gambling. Last year, with just 4% of the slot machines in Vegas and 40% of the gaming tables, Macau generated roughly the same gambling revenue. (That also reflects the difference in risk-taking propensity between a market currently reliant on high-rolling whales and one dominated by blue-haired ladies pulling slots.) What explains this intensity? You hear the same answers again and again--luck is a central concept in Chinese culture; look at all the ways they try to shape and discern fate through lucky numbers, feng shui, I Ching, and the like. (Navigating a street near the Lisboa, I'd nearly tripped over a woman who had arranged a roast pig, a raw chicken, flowers, and an urn of burning incense outside a new jewelry store--offerings for a truly grand opening?) But until you walk into a place like the Sands, you can't fully grasp what one Asia hand told me: "The difference between Westerners and the Chinese is that for Westerners gambling is about entertainment and calculating probabilities. For the Chinese it's a battle with destiny."
THE SANDS BUZZES with a good vibe on a Saturday night. Its cavernous main floor is stuffed with baccarat tables, the game the Chinese favor. Here the typical minimum is just $40. The goal in baccarat is to see who gets closest to nine (face cards and tens count as zero) with a maximum of three cards. At the first table, I watch what I assume is one player's unique style. While the dealer waits, he's slowly peeling back the corner of one card until…ahhh, the eight of clubs. He then repeats this ritual with his second card. Hardly anyone drinks anything stronger than the tea served up in highball glasses from carts pushed by ladies in brown and gold Mao jackets. But you could cut the cigarette smoke with a bent Jack of diamonds. I watch for a few minutes. Suddenly I look up and realize the exact same battle with destiny, including the card-bending routine, is going on at every table. There's nothing like this in Vegas.
The only real debate about Macau's future is over how quickly the market evolves. Skeptics think the new boys are getting way ahead of themselves. "This is not Las Vegas; Asians want to gamble, not go shopping or see Celine Dion shows," insists Anthony Carter, a Brit who's spent 35 years in the region and is CEO of Hong Kong's Galaxy casino group, itself a recent arrival in Macau. "That will come in due course. But right now I just don't see that the demand for these new facilities the Americans are building will meet the cost."
To which both Adelson and Wynn--and here we finally discover a point they can agree on--reply, Nonsense. "To look at the high level of shopping and consumer taste in Shanghai and Hong Kong and still suggest that the Chinese won't care about luxury is a ridiculous denial of reality," says Wynn. "The transformation of Macau in the next 60 months will be the most remarkable metamorphosis in modern history." Told that Galaxy's Carter believes the correct "Asian price point" for a hotel room is under $100, Adelson snorts, "I'm going to have five price points in Cotai! I want the mass market and the high-roller market. My target is to maximize every opportunity." That includes MICE--as in meetings, incentives, conventions, exhibitions (a.k.a., the group-travel business). "My guy just came back from ten days on the mainland checking out the MICE market," Adelson continues. "The words he kept using were 'mind-blowing' and 'blown away.' It's like a firecracker. They've lit the fuse, and it's ready to explode."
What's also certain to explode is the Cotai Strip, whose virtues Adelson has championed louder and longer than anyone. Among the prominent recent converts: Stanley Ho. Ho's youngest son, Lawrence, heads a new family joint venture with Australia's richest man, Kerry Packer. Ho and Packer's project in Cotai, the $1 billion City of Dreams, will be designed very much with Adelson in mind. Rather than go "head to head" with the neighboring Venetian, Lawrence has dropped a convention center and large retail complex from his original master plan to focus on building "a special casino" that will sit beneath a giant aquarium.
"In conventions, Sheldon Adelson is the master," Lawrence Ho says.
"Why would we want to compete with him?" Wynn told me he too will soon be announcing plans to add to his Macau stake with some major new projects in Cotai.
Might there be something a bit bubbleicious about this stampede--which is driving property prices into the stratosphere and causing labor shortages and infrastructure bottlenecks? Maybe. There's also the "anchovy theory" espoused by a top American financier with China experience. "In a Caesar salad," he warned me right before I flew out to Macau, "the anchovy is the first thing to get chopped up. That's what we foreigners are in China: the anchovy." The major blow would come if gambling, which was everywhere in China until the Communists took over in 1949 and promptly banned it (along with prostitution, private property, and other capitalist vices), were suddenly made legal on the mainland. But that strikes most analysts as a bridge too far for the current leadership, who seem happy for now with a dynamic, growing, cleaned-up Macau. The more pressing problem is the kind of regulatory confusion that has swirled up in a recent dispute between Adelson and one erstwhile partner, Hong Kong's Regal Hotels group. Regal is now petitioning the government to develop a site that Adelson claims as his own. He says he's "completely certain" he will prevail.
At our final dinner Adelson waves a hand to dismiss once and for all the "naysayers" I keep bringing up who question his vision. He then mentions he'd just that day seen a June 1955 Life magazine cover. Over a photo of showgirls ran this headline: "Las Vegas: Is the Boom Overextended?" Point taken. We're not talking, after all, about the late, great Internet boom, where a Pets.com or Webvan spent billions to meet needs no one had. We're talking about investing multiples of that to soak up travel dollars and leisure spending in the middle of the richest region in the fastest-growing part of the world. Barring catastrophe--war in the Taiwan Straits, some horrific new plague--how can it not work?
IN THE YEARS AHEAD, Adelson expects to put a lot of miles on his personal Boeing 767. (He upgraded earlier this year from a 737, and now that he's public, only charges the Las Vegas Sands for the cost of a first-class ticket.) Beyond Macau, gambling seems set to go global--just as it exploded out of Nevada and across the U.S. Singapore, Thailand, Britain, and Korea are among the countries that once banned casinos and are now either taking bids on new concessions or considering doing so. Like his rivals, Adelson is chasing hard after every opening.
What drives a guy entering his eighth decade to place the biggest bet of his career? Adelson's old friend Mike Milken answers by putting him in context with other aging megamoguls he's known. "I didn't even meet Dr. Armand Hammer until he was 80," says Milken, "and we raised more capital for him after that than we did for anyone in the world. John Kluge was 70 when we did the biggest financing ever up until then so he could take his firm private. Kirk Kerkorian just did the biggest deal of his life at 87." That's the kind of eternally energetic, entrepreneurial company Adelson has bulled his way into.
One last thing: Despite his congenital focus on the bottom-line, Adelson is playing for more than just the bucks. What he's really burning for is a little credit. Does he feel he doesn't get enough acknowledgment, certainly compared to Wynn, for his role in reinventing the business model in Vegas? "Absolutely." Does he worry the same thing could happen again in Macau? Damn right. "Nobody had ever thought of recreating Las Vegas in Cotai," he says. "Nobody. They all decried it. Ho and Wynn dismissed it. Now they're all coming out of the woodwork to be part of it." So take a note, you future historians: Mr. Sheldon Adelson respectfully requests that you put this caption next to his photo: The Man Who Built the Las Vegas Strip--in China. If he delivers on all or even most of what he's promised, he deserves it.
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