The high cost of hosting EuroVegas

On February 23, 2009 the six most powerful men in the Macau casino business met to "promote their common interests." At the head of this association was placed Stanley Ho, the richest man in Macau, who a US government agency suspects of links to organized crime. A few months before the meeting, the director of Macau's gaming commission, Manuel Neves, told the US consul general in Hong Kong that two triad-related groups, 14k and Shui Fong, were active in the city. Neves surmised that the income of these triad gangs would fall in 2009 in line with gaming profits in Macau, "implicitly relating" mafia and the casinos.

The supposed links between organized crime and the casinos were mentioned in the WikiLeaks-released State Department cables, but of course that was no secret beforehand. A 2011 report by the US government's Strategy for the International Control of Narcotrafficking said of Macau: "It is the principal gaming market in the world [...] and the risk of money-laundering and financing of terrorist activities exists. The main criminal activities are related to drugs, organized crime and illegal bets."

Vegas Sands wants to change laws related to terrorism and money laundering

They promise the creation of 164,000 direct and 97,000 indirect jobs

At the center of suspicion are the so-called junkets, people or businesses (some of which are listed on Nasdaq) "subject to a lax regulation that exists to capture VIP players and accounts for 80 percent of the money moved" by the casinos. In 2010 Macau, one of two Special Administrative Regions of China along with Hong Kong, which among other peculiarities is the only place in the country where gambling is permitted, generated $34 billion, six times more than Las Vegas.

Essentially, the junkets finance travel, accommodation and assume the risk of financing bets and covering debts. In return, the junkets receive a fixed, tax-free commission and a split of the casinos' profits. Part of their success is that the profits of various people are kept in a single account, which maintains anonymity and could also create the conditions for money laundering. In Macau there are 190 licensed junkets but only 40 of them account for 80 percent of the market. VIP players of the sort sought by the junkets never dip below $400,000 per hand.

Las Vegas Sands is a US company that grew in the Nevada desert but now draws 55 percent of its adjusted Ebitda from investments in Macau, according to the US Stock Market Commission. Its owner, Sheldon Adelson, is the 16th richest man in the world and one of the six gambling kings of Macau. If his investments in Singapore are taken into account, 83 percent of his profits come from Asia. Now, Adelson has fixed his gaze on Spain for the fourth part of his empire: EuroVegas. The plan involves between 15 and 18.8 billion euros of investment up to 2022 to raise a giant complex of 12 resorts (36,000 rooms), six casinos, nine theaters and three golf courses.

A promise of the creation of 164,000 direct and 97,000 indirect jobs - half of the current unemployment figure in the Madrid region - seduced the outgoing Socialist government and the Popular Party regional and city authorities. But Adelson's plan requires sweeping legal changes and concessions on the part of the three administrations, including a gift of 5.8 million square meters of land, a fiscal vacation that would exempt him from practically all tax, changes to the labor law and the waiving of the smoking ban in his establishments.

Nothing if not ambitious, Adelson also wishes to change the regional Gaming Law to allow junkets to operate, the reversal of a law prohibiting gambling on credit and changes to the national Civil Indictment Law that deals with the execution of gaming debts. Finally, Adelson is seeking a modification of tax regulations so that gamblers are only required to pay tax in their home countries and changes to the money laundering and financing of terrorism legislation that would only oblige him to identify clients on entry and when they wish to change or buy more than 2,000 euros.

Far from hooting with derision, and despite the lordly demands of Adelson, the parties have continued to meet. Madrid regional premier Esperanza Aguirre has said: "If there is need for any modification that is within my principles, it will be done." Ignacio González, Aguirre's number two, said a few weeks ago that conversations were "quite advanced." Sources close to the negotiation say that much of the drive comes from González, whose position in the Madrid PP hierarchy was recently strengthened by the departure of political rival Francisco Granados.

The acting industry minister, Miguel Sebastián, has said that he does not view the plans in a bad light and even described Las Vegas Sands as "the best" company in the world in its field.

In its 2010 report to the US Stock Market Commission, Las Vegas Sands admitted it depended in large part on the activity of junkets, the system it now wishes to transport to Spain, and that the company is responsible for a large portion of the revenues and income from gaming in Macau. The report adds: "We cannot ensure that the junkets with which we are associated will comply with the standards we demand of them, which could damage our reputation and could lead to sanctions by the regulators."