The Gambler
Interview | John Arlidge Sheldon Adelson, the richest casino boss on earth and the third wealthiest man in the USA, is betting his entire £10bn fortune by going global THANKS TO HOLLYWOOD’S portrayals and ‘the mob’, everyone knows that casinos are tough places. But no matter how tough they get, it’s unusual to find a [...]
Interview | John Arlidge
Sheldon Adelson, the richest casino
boss on earth and the third wealthiest
man in the USA, is betting his entire
£10bn fortune by going global
src="http://www.bmivoyager.com/images/2008/apr/voyager_apr_082.jpg">
THANKS TO HOLLYWOOD’S portrayals and ‘the
mob’, everyone knows that casinos are tough
places. But no matter how tough they get, it’s
unusual to find a billionaire gambling boss sitting
in his private suite, surrounded by his bodyguards,
picking a fight with his arch-rival in front of the press.
It was 2pm on a chilly Las Vegas day in January and
there were just hours to go before Sheldon Adelson opened
the biggest hotel in the world – the 50-storey Palazzo,
which is linked to the Venetian to create a hotel complex
with more than 7,000 rooms and 50 restaurants, cafés
and bars. But the 74-year-old was more interested in
tearing strips off his arch-rival, Steve Wynn, owner of the
neighbouring Wynn Las Vegas, than tearing the ribbon that
would seal his place in the history books.
“He thinks his pearly white teeth, or his veneers or caps,
shine very good… that he is some kind of superior being. He’s
not,” Adelson sniffed. “If he’s so much smarter than I am, why
isn’t he richer than I am? He’s worth 10% of what I’m worth!”
Squabbling in public is an unconventional way of starting
a week-long party to celebrate a new £1bn venture, but then
Adelson is an unconventional operator. He’s spent a lifetime
doing things his way and it has paid off – in spades. He’s the
richest gambling magnate in history and the third richest
man in America, with a personal fortune of more than £10bn.
“I’ve always been the outsider,” he declared at the launch
of his newest venture. “My modus operandi – to see and
do what others don’t, to overturn the status quo and to
confound the critics. I’ve been doing it all my life.”
alt="The world’s biggest hotel complex."
src="http://www.bmivoyager.com/images/2008/apr/voyager_apr_087.jpg">
He’s still at it. With the US slipping into recession, gaming
analysts are warning the chips are down for the casino
business. Indeed, the share price of Adelson’s Las Vegas Sands
Group slumped in the last quarter. But he is betting that high
rollers and vacationers will keep flooding into Sin City. He’s
not only opening the world’s biggest hotel, he’s looking at
building another multi-billion-pound casino hotel complex in
town, with up to 5,000 rooms and 1,000 condominiums.
He’s spending billions overseas, too. Last August he opened
the Venetian Macau, the first of 15 hotel/casinos that he is
building in the former Portuguese colony that reverted to
Chinese rule in 1999. At a cost of £6bn, the development,
with 20,000 rooms and 20,000 slot machines, is the largest
gambling and tourism project in history. “I’m building a city:
Asia’s Las Vegas,” he said.
Adelson is investing a further £2bn trying to persuade
the clean-living citizens of Singapore that cold beer and hot
girls is what they really want. The Marina Bay Sands, the citystate’s
first casino resort, is due to open next year and will be
followed by a network of resorts and casinos in Japan, Korea,
Thailand, Taiwan and India. He’s even talking about creating a
mini-Las Vegas in Europe.
The total bill for the expansion will exceed £10bn and, if
things go his way across Asia, could exceed £20bn – twice his
net worth. It is the biggest punt anyone has taken on sequins
and seven-card stud. Not, of course, that he sees it that way.
“Biggest punt? A bet? No, no. It’s a surety,” he laughs. “This
business is recession-resistant, almost recession-proof. When
things are good, people want to come and celebrate. When
things are bad, they want to escape. Either way, they come.”
src="http://www.bmivoyager.com/images/2008/apr/voyager_apr_086.jpg" alt="The Venetian and Palazzo Resort in Las Vegas, makes history">
He points out that The Venetian and Palazzo is already
running at almost 100% occupancy, thanks to the booming
convention business, good marketing and a highly-sensitive
room-pricing system. This year he predicts his firm’s Vegas
gambling, room, entertainment, and restaurant and bar
revenue will push turnover towards £1bn for the first time. He
predicts similar numbers for Singapore.
When the Macau development is finished in 2010, he
estimates the Sands Group will pull in almost £6bn a year
from it, giving him 60% of the local gambling and tourism
market, up from his current share of about 30%. If Adelson
is right, he will, by his 80th birthday, be within touching
distance of his stated goal of surpassing Bill Gates and
Warren Buffett, the only two titans ahead of him on Forbes
magazine’s most recent list of America’s wealthiest people.
It would be the ultimate rags to riches story. Adelson grew
up poor in a working-class neighbourhood of Boston, the son
of Jewish immigrants from eastern Europe. His father was a
cab driver and his mother ran a sewing shop. “We didn’t even
have money for comic books,” he recalled.
He hawked newspapers at the age of 12, borrowing £100
from his uncle to lease two city corners. After military service,
he moved to New York, dropped out of college, sold adverts
for financial trade publications and tried his hand at the
mortgage broker business, before returning to Boston in the
1960s to run his own charter tour business. By the mid-1980s
he moved into the convention and expo business, building the
computer industry’s premier trade show, Comdex. He rented
floor space at 15 cents a square foot, then leased it
to exhibitors for up to $40 a square foot.
Adelson’s move into the hotel-casino business came in
1989, when Comdex was thriving. He bought the ageing
Sands Hotel for £64m and built the largest privatelyowned
convention centre in the US on the site, with
1.2 million square feet of floor space. Old Vegas hands
were dubious. Adelson had always fed customers to the
hotels, not competed with them. But he filled the hotel
and the convention centre, single-handedly establishing the
convention market in Vegas. The city is now America’s
No 1 convention destination.
After selling Comdex and 16 smaller shows to Japan’s
Softbank for £431m in cash – pocketing £255m himself – he
razed the Sands in 1996 in a spectacular implosion, complete
with warm-up fireworks display, and borrowed hundreds of
millions to build the £750m Venetian on the site.
The development broke the basic rules of Vegas design
by being geared toward conventions, rather than centred on
the casino. There were fancy bars, restaurants and ballrooms,
and the rooms had mini-bars and fax machines – luxuries
previously unheard of in a town where hoteliers wanted
guests to spend as little time as possible in their rooms. Again,
Vegas’ old guard laughed but he filled the 4,000 rooms – and
did it with the highest average daily room rate on the Strip.
The Venetian is now the Strip’s second most profitable casino
hotel, behind only the Bellagio.
In 2004 he took the Sands Group public, raking in almost
£500m. Over the next two years his company’s stock and
his net worth soared by £8.5bn, which works out at almost
£500,000 an hour – weekends, holidays and nights included.
“He got richer faster than anyone else in history,” said Peter W
Bernstein, co-author of All The Money In The World: How The
Forbes 400 Make – And Spend – Their Fortunes.
alt="Predictions that Las Vegas’s casinos may bear the brunt of a US recession mean Edelson is taking a big gamble with his new venture"
src="http://www.bmivoyager.com/images/2008/apr/voyager_apr_088.jpg">
Today, Adelson travels the world on any one of his four
private jets with his bodyguards. He claims they are employed
mainly to protect the two sons he fathered in his 60s with
his second wife, Miriam, a doctor, who runs the multimillionpound
global medical research foundation that Adelson funds.
He also has another child from a previous marriage.
His family were there in Vegas at the beginning of this year
to watch him take the biggest gamble in a life of chance.
Diana Ross sang Ain’t No Mountain High Enough in front of
croupiers toying with piles of chips and fireworks exploded
from the roof of The Venetian and Palazzo. When he left the
party, the question many were asking was: will his latest
developments be his last? After all, he will be almost 80
when they are all complete. “Retire?” he laughed. “For what?
Everything that I want to do in retirement I am doing today.
I spend time with my family. I spend time in business and in
medical research. I travel extensively. What else would I do?”
And, with that, he walked to his £300,000 Maybach
limousine and headed off into a night sky blasted with neon
from a development which – if the cards fall for him – will
help to secure his place in business history as the shrewdest
gambler of all time.
The Palazzo Resort Hotel Casino, 3325 Las Vegas
Blvd South, Las Vegas, +1 866 263 3001;
www.palazzolasvegas.com
