The site for Spain’s landmark EuroVegas development has now been confirmed with the town of Alcorcon near Madrid primed for the project which would initially include four huge casino complexes based on Circus themes and New York’s Time Square.
Although spearheaded by Las Vegas Sands, any future operator for the project will have to win out in a tender launched for the licence.
In confirming the location, Ignacio Gonzalez, President of Madrid’s regional government, said: “For some time we’ve been working on an inspiring and extraordinary project the goal of which is to make Madrid the international reference point for conventions, fairs, exhibitions and leisure in Southern Europe. This is a very important day for Madrid and for Spain. We have worked intensively for months on this project and now it is beginning to see the light. We have been committed to developing a legislative framework and now that legal framework is a reality. Las Vegas Sands will invest 35 per cent of the first phase, the rest being financed elsewhere. We anticipate that the first phase will be completed in 2017, which is great news for Madrid as there is no other project as ambitious or spectacular as this anywhere in the world.”
If it does go ahead, EuroVegas will be built on 750 hectares in Alcorcon, located a lucky 13km south-west of Madrid. Work on the first and most expensive phase is expected to be completed by 2017. The first phase would include four resort casinos housing up to 12,000 hotel rooms.
Speaking at the recent International Casino Conference in London, Las Vegas Sands’ President and COO Mike Leven said it would be ‘the most memorable and exciting resort experience in Europe.’
“This will be Europe’s version of Las Vegas, not the Las Vegas Strip in Europe. It will be a pristine experience; the best in the world,” he said. “We believe in the long term future for Europe.”
He described the vision as being ‘clean, tasteful and able to attract all audiences’ with visitors being able to smoke ‘in some areas.’
If selected, Sands will develop the four casino resorts in the first phase and then allow other operators to pitch their projects for the subsequent phases of the development.
To quantify, Mr. Leven pitched the size of each resort as being similar to the Integrated Casino Resort that Sands opened in Marina Bay, Singapore. Marina Bay Sands is the second most expensive resort casino to ever be developed after CityCenter in Las Vegas.
“In Singapore, which is about the size of one resort, we have 10,000 people on our payroll,” he explained. “This project has both enormous economic implications and enormous employment opportunities.”
Spanish company Promomadrid revealed that the completion of all three phases would see the development dramatically boost gross domestic product by 4.5 per cent, creating 164,000 jobs directly and a further 97,000 indirectly. This would equate to roughly 50 per cent of unemployment in the area. Job creation is at the centre of the project’s economic promise. At around 26 per cent, Spain’s unemployment rate has increased to the highest in Europe.
The focus in terms of customers will very much be on the mass market with the initial phase opening with just 58 VIP tables. The operator does though plan to fly in some Asian customers. Mr. Leven highlighted that Sands owned the largest private air fleet in any private industry and with Spain being an ‘interesting destination’ for Asians, he expects EuroVegas to get some of that traffic.
The Las Vegas giant has already invested over $11m researching and promoting the project. Mr. Leven revealed at the ICC that early designs included a circus-themed casino and one based on New York’s Time Square. He joked that it would be New Year’s Eve every night for guests staying at that particular resort. In terms of financing, Sands said it will front up to 35 per cent of the project with the rest coming from external sources.
“That money is available,” he explained.
Mr. Leven predicted the project would draw 15 per cent of its customer base from the Madrid area, highlighting that over a billion people lived within a five hour flight time of Madrid. The comparative catchment for Las Vegas is less than 420m.
The project received a huge boost in December when Madrid’s parliament approved a reduced tax rate of ten per cent on GGR for Integrated Development Centres but the project’s passage could still hinge on the smoking ban that Sands wants lifting for EuroVegas. Some observers have questioned whether Sands will still commit to a no smoking EuroVegas with some even suggesting the whole thing is more a case of smoke of mirrors to lift Sands’ share price; the premise being that the operator knows the Spanish government won’t overturn its policy on smoking so it will never actually come to fruition. For a variety of reasons, Sands shares have so far increased 16 per cent on last year’s valuation. The official word from Mr. Leven though is completely positive.
“We expect to lay the first stone at the end of the year,” he said. “This is the biggest investment that will take place in Spain in the coming years.”