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Las Vegas Sands announces plans for Eiffel Tower replica in Macau

20 September 2012

Apparently, the gaming industry needs two Eiffel Towers.

Las Vegas Sands Corp. Chairman Sheldon Adelson said Thursday in Macau the company would build a scaled-down replica of the Eiffel Tower as part of a new $3 billion hotel-casino on the Cotai Strip region.

Adelson unveiled plans for The Parisian during the opening of a Sheraton hotel, which is part of the second phase of the company's $4.4 billion Sands Cotai Central.

On the Strip, Caesars Entertainment Corp. owns Paris Las Vegas, which includes a 46-story version of the Eiffel Tower, roughly half the size of the 1,050-foot-tall original in Paris.

Paris Las Vegas is attached to Bally's Las Vegas. It opened in 1999 and was built by Hilton Hotels and was developed by the late Arthur Goldberg.

Adelson said The Parisian would have 3,000 hotel rooms and feature a "50 percent scale-to-scale" replica of the French monument.

He told media in Macau his company's version of the Eiffel Tower would be more realistic than the Strip version because the legs would be free-standing instead of passing through other buildings.

"I guess copying is the highest form of flattery," said Jan Jones, senior vice president of communications and government relations for Caesars Entertainment.

During a news briefing in Macau, Las Vegas Sands President Michael Leven said the company would fund The Parisian with $1.5 billion in bank loans and $900 million to $1 billion in cash.

The hotel-casino would include family-oriented facilities to lure middle-class gamblers from China, the company said.

David G. Schwartz, director for Gaming Research at the University of Nevada, Las Vegas, said there wouldn't be much confusion between the Strip and Macau because the Sands version of Paris will attempt to attract middle-class Mainland Chinese customers.

"Since the middle-class Chinese market will not likely visit the Strip, this may be the only Eiffel Tower they ever see," Schwartz said.

Macau is the world's largest gaming region, producing more than $33.5 billion in gaming revenue in 2011. China's economy has slowed, but Adelson dismissed concerns that Macau's boom days were over.

"We would not be expanding if we did not think there was a future here," Adelson said during the briefing.

Hong Kong-based CLSA Ltd. forecast gambling revenue in Macau would jump to $100 billion by 2020.

"Growth within the mass-market segment, particularly on Cotai, has remained exceptionally strong," said a research report from Citigroup's Hong Kong office. "We continue to favor the mass-focused Cotai operators."

SJM Holdings and MGM Resorts International are awaiting approval from the Macau government to build hotel-casino projects on the Cotai Strip. Earlier this year, Wynn Resorts Ltd. was approved to build a $4 billion hotel-casino complex on the Cotai Strip.

A new rail line linking Macau to the Guangzhou region and relaxation of visa requirements will help drive up revenue, especially for resorts that target middle-class gamblers instead of the high-rollers, where demand growth has decelerated, said analysts at Citigroup.

Completion of the Cotai Central development would give Las Vegas Sands almost 9,000 hotel rooms in the region. The Sheraton has almost 4,000 hotel rooms, joining the much smaller Holiday Inn and Conrad properties. A 400-room St. Regis hotel is under construction. The hotels are connected by casinos, retail, restaurants and convention and meeting space.

In addition to Sands Cotai Central, the company operates the Sands Macau, the Venetian Macau and the Four Seasons Macau.

Macau is the only place in China where casino gambling is legal.

Las Vegas Sands is exploring gaming expansion opportunities in Europe, Japan, Korea and Vietnam. Adelson said he would also invest in Taiwan if the government legalizes casino gambling.

Earlier this month, Las Vegas Sands officials said they chose Madrid as the preferred location for a $22 billion integrated gaming and resort development, dubbed EuroVegas.