Sheldon Adelson is attempting to reverse the methods that have typically served the gambling industry when opening new markets. Traditionally, gaming businesses have promised various incentives to new communities to persuade them to grant casino licenses. In a bold move, Adelson announced his willingness to replicate the profitable Cotai Strip model of resort development in other Asian markets – provided the country offers the proper concessions. As the Chairman and CEO of Las Vegas Sands Corporation and the 12th richest man in the world, Adelson just may have the clout to pull it off.

This stunning announcement was made recently at a luncheon at JP Morgan Chase & Co investment conference that was held at the Sands-owned Venetian hotel in Las Vegas. Adelson said his company has conducted a number of economic impact studies on emerging Asian markets where gambling legalization is being considered. The studies show how an integrated resort can help the country’s tourism and consumer spending, similar to the effect shown in Macau where the resorts are pulling in 26 million tourists annually.

Macau is the place that the other countries look to for a model of what gambling and integrated resorts can do for the economy of an area. An economic report issued by Macau’s Statistics and Census Service shows that the country’s gross domestic product for 2007 grew by 27.3% from the year before. The country’s annual visitors had risen by more than 22% and total visitor spending (not including gaming expenses) had grown by close to 14% over the year before. Another benefit that Macau enjoys is the low unemployment rate of less than 3%.

Macau’s gambling revenue surpassed the Las Vegas strip in 2006 and rose another 46.6% in 2007 to $10.4 billion dollars. Latest reports show the trend shows no signs of slowing down in 2008 as Macau’s February revenue was up by 67% over the same month last year. This is a tempting success story for other Asian nations considering capitalizing on the desire for gambling.

Adelson went on to say that the Sands Corp. is willing to spend billions of dollars to develop an integrated resort with a casino, hotel rooms, convention and meeting space, restaurants, retail areas and other features. This would be a resort similar to what the Sands is developing in Singapore with its planned $4 billion dollar Marina Bay Sands resort. Adelson said Las Vegas Sands would put in “a couple hundred million to build a big box” if the country just wanted an ordinary casino.

To get the same economic benefits as Macau’s Cotai Strip, however, a jurisdiction would need a string of integrated resorts. In Macau, the Las Vegas Sands is investing at least $12 billion to build a string of 14 casinos complete with 20,000 hotel units, 3 million square feet of retail space, dozens of restaurants and a further 3 million square feet for meeting and convention space. Adelson said at the luncheon that an Asian market that wants its own version of the Cotai Strip should be willing to waive taxes and fees, build roads and other services, and even offer additional unnamed benefits to the developer.

Adelson said the economic impact studies on various potential Asian gaming markets amply demonstrate how much an integrated resort could benefit a country’s tourism industry and elevate consumer spending. That is an extremely attractive and lucrative picture to paint for some of the poorer economies currently found in many Asian countries.

“We would make the largest investment in that country’s history, which would bring in 8 to 10 million incremental new tourists annually. That might be more than that country’s population,” Adelson boasted. “We’ll also create a couple of hundred thousand new jobs. That’s a very attractive proposition for any politician.”

He went on to say, “With 20,000 hotel rooms, we would create 130,000 jobs at the low end and up to 180,000 jobs at the high end. We would move a country’s GDP [gross domestic product] needle by at least 2.7%.”

Adelson’s take on the Asian gambling markets has both gaming analysts and rival casino companies thinking in a different direction. Joel Simkins, a gaming analyst with Macquarie Capital, thinks that a “desperate, Third World economy” just may be willing to accept Adelson’s offer.

Bill Lerner, an analyst with Deutsche Bank, said the Sands and similar companies have shown their willingness to invest in foreign markets. Those investments have resulted in increased tourism and job growth for the country involved. As Lerner puts it, “I think the history affords them the right to start demanding concessions in order to mitigate their risks. These companies have a track record of success.”

Other casino operators have also been intrigued by Adelson’s philosophy. Steve Wynn, the Chairman of Wynn Resorts Ltd., said the Sands’ success record is noteworthy. His company is also heavily invested in the Cotai Strip with its Wynn Macau resort.

“Obviously, Sheldon has something in mind…” said Wynn. “He has done a fabulous thing and I admire him. We’ll see where he’s going with this.” For someone who has a record of being at odds with Adelson, this is a glowing endorsement of Adelson’s new stance.

MGM Mirage Senior VP, Alan Feldman, was a bit more skeptical when asked for his response to Adelson’s proposal. He felt that the countries most likely to accept Adelson’s terms “might not be places where people would want to do business.” Obviously, despite the negativity, the idea is attractive to Feldman as he went on to say, “But who wouldn’t want a jurisdiction to forgo gaming taxes?”

Many Asian markets are at least considering large-scale gaming opportunities including Vietnam, Thailand, Japan, Korea and Taiwan. These countries have seen the incredible rise in prosperity of the tiny Chinese enclave of Macau and the success of its wildly popular Cotai Strip. Many of these countries are hoping that Macau’s success can be duplicated in their countries. Only time will tell if serious markets will be willing to accept Adelson’s proposal. Industry analysts and rival casino owners alike are watching with interest.