BUSINESS

How long before US casino firms transfer corporate HQs to Asia?

TAGs: Asia, las vegas sands, sheldon adelson, Wynn Resorts

us-casinos-corporate-hq-asiaThis week brought news that the total amount Las Vegas Sands’ titan Sheldon Adelson donated to Republican political candidates during the last election cycle was far greater than originally touted. The Huffington Post reported that Adelson spent upwards of $150m backing the GOP, emerging with very little to show for it beyond a stream of media attention. With the exception of ensuring that Sen. Dean Heller (R-NV) kept his seat, the overwhelming majority of GOP recipients of Adelson’s largesse failed to win their respective races.

Yet Adelson doesn’t feel the least bit chastened by this setback. On Tuesday, Adelson told the Wall Street Journal he’d “double” his future GOP contributions. The casino boss said he happened “to be in a unique business where winning and losing is the basis of the entire business, so I don’t cry when I lose. There’s always a new hand coming up.” Besides, what’s $150m when you just agreed to cut yourself a $1.2b dividend check in time for Christmas?

Already looking ahead to 2016, potential GOP presidential nominees are lining up to curry Adelson’s favor. Politico reported that Republican governors Bobby Jindal (Louisiana), John Kasich (Ohio) and Bob McDonnell (Virginia) all made pilgrimages to the Venetian in Las Vegas shortly after November’s election to supplicate themselves before Gondolier #1 (as Nevada journalist Jon Ralson refers to Adelson).

Adelson’s backing of the GOP is based largely on his conviction that the party holds a more benevolent view of Israel than the Democrats. But during the campaign, Adelson told Politico he was also motivated by the sense that he and his casino company were being subjected to a witch hunt by the US Department of Justice looking into allegations of money laundering for Mexican meth barons, transferring money around the globe on behalf of Asian triads and bribery of Chinese officials that could result in LVS being charged under the Foreign Corrupt Practices Act (FCPA). Adelson paid a visit to Capitol Hill on Tuesday, meeting with House of Representatives Speaker John Boehner and House Majority Leader Eric Cantor. The HuffPo claimed Adelson intended to discuss potential revisions to the FCPA, but other sources claimed the FCPA was not on this week’s agenda.

At the recent Asian Gaming and Hospitality Congress in Macau, a former Sands China general counsel suggested the increased legal scrutiny of US-based casino firms with operations in Asia might lead those companies to “seriously consider moving their headquarters to Asia where the business is at the moment.” Luis Mesquita de Melo stressed that these views were his own and not necessarily that of his former employer, but the suggestion is not a new one. In 2010, Steve Wynn told a Hong Kong reporter he was considering moving Wynn Resorts’ corporate headquarters to Macau. Although he later attempted to qualify that statement, it’s worth noting that Steve’s firm has since become the subject of a US legal investigation into Wynn’s controversial $135m donation to the University of Macau.

Of course, just because there’s smoke doesn’t mean a firestorm is imminent. But Asia now contributes the vast majority of both LVS and Wynn revenues, and MGM China represents the only significant growth element on MGM Resorts’ balance sheet. The eastward tilt detailed by PriceWaterhouseCoopers is expected to “fundamentally reshape the landscape of the global gaming industry,” resulting in Asia overtaking the US market less than three years from now. As the revenue streams realign, a corporate shift to Asia will become inevitable. And while Adelson’s personal interests will continue to influence his contributions to the GOP, US companies will increasingly only be paying attention to Asian politics.

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