The Wiser Approach
King of the Gamblers
By Rob Wiser
Breaking the rules of casino design made Sheldon Adelson the richest man in gaming
This year, when Forbes published its list of the richest Americans, surely you were familiar with Bill Gates (#1) and Warren Buffet (#2). But how much do you know about Sheldon Adelson, the man who ranked third, and how he amassed his $28 billion fortune? He must be the richest American that most people have never heard of.
While Gates and Buffet have been legends in their respective industries for decades, Adelson only recently became the richest man to run casinos. In fact, no one in history has gotten as rich, as fast, as Sheldon Adelson. In December 2004, his company Las Vegas Sands Corp. went public, and over the next two years his net worth skyrocketed by $17.5 billion. (In other words, he was making almost $1 million an hour, 24 hours a day, including weekends and holidays.)
The son of a cab driver, raised in a tough blue-collar Boston neighborhood, Adelson began his entrepreneurial pursuits at age 12 when he borrowed $200 from his uncle so that he could sell newspapers. He would later drop out of City College in New York City to become a court reporter, and over the years, he tried his hand at a variety of businesses—from peddling toiletry kits to motels, to the mortgage-broker business, to starting a charter tour company.
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Adelson sold Comdex to Softbank of Japan in 1995, pocketing over $500 million from the $862 million sale. Then in his 60s, Adelson could have cashed out; instead, this would only be the first chapter of a whole new career that would dwarf his previous successes. His next move was to demolish the Sands and construct the $1.5 billion Venetian casino-hotel, its magnificent design inspired by his honeymoon in Venice.
Yet when the Venetian opened in 1999, the industry greeted it with skepticism. Adelson had veered away from the fundamentals of casino design by gearing it towards hosting conventions, rather than gamblers. Its extravagantly spacious hotel rooms, every one of them advertised as a suite, had fax machines and mini-bars. This, too, broke from conventional casino wisdom, which dictated that standard hotel rooms should be low on frills—so that guests would spend every waking moment at the slots and tables.
Adelson proved them all wrong. The massive gatherings constantly being held in the attached convention center filled his hotel rooms midweek, with guests who were willing to pay high rates. It was also a magnet for tourists, who flocked to its massive shopping mall, shows, nightclubs, restaurants, and of course its giant casino. Today, the Venetian is the Strip’s second most profitable property, behind only the Bellagio, and just a third of its revenue comes from its gambling floor. Additions such as the show “Phantom: The Las Vegas Spectacular” and the restaurant-nightclub TAO (now the highest-grossing nightlife venue in the country) have made it one of the most iconic resorts in the world.
Now, with the opening of its $1.9 billion Palazzo tower—a resort unto itself, with its own casino, restaurants, clubs, shopping, hit Broadway show (“Jersey Boys”), and over 3,000 rooms—Las Vegas Sands Corp. has become the operator of the world’s largest hotel and convention complex under one roof.
As you’d expect of a man who rose from blue-collar roots to become one of the world’s wealthiest tycoons, Adelson, 74, is known as a relentless, hardnosed businessman. The local Vegas newspapers have been covering his legal quarrels for years; he filed claims and counterclaims against scores of contractors who worked on the Venetian, and has also taken on the local A.C.L.U., the Culinary Workers, the Las Vegas Convention and Visitors Authority, and the local power company, arguing they should cover the cost of removing utility poles from the Venetian site.
His most famous nemesis, however, is Steve Wynn. The two moguls have feuded over everything from the volume of the artificial volcano in front of Wynn’s Mirage resort, to the size of the Venetian’s parking garage. Now they’ve moved the battlefield to the Far East, where they both operate resorts in the red-hot Chinese gambling enclave of Macau.
In Las Vegas, Wynn was well established as king of the Strip when Adelson burst onto the scene with Venetian. In Macau the situation was reversed; Adelson was the first American operator to open there in 2004, with his Sands Macau Casino. (An instant sensation, the Sands recouped its $265 million investment within its first year.) Wynn followed, opening his exquisite Wynn Macau in 2006.
But while Wynn seems to be weighing other options in Macau, Adelson is plowing full-steam ahead, single-handedly aiming to transform the region into the Las Vegas of Asia. In August 2007 he unveiled his $2.4 billion Venetian Macau, a stunningly ambitious resort featuring a 15,000-seat arena, a convention center, and 3,400 slots and 800 tables on a gaming floor three times the size of Las Vegas’s largest. And that’s just the beginning; Venetian Macau will serve as the anchor for Adelson’s “Cotai Strip,” a stretch of land which will contain $10 billion worth of luxury hotels.
Las Vegas Sands Corp also won a highly coveted license to enter the Singapore market, where it is constructing a $3.6 billion casino hotel. And the company is hardly slowing down on the domestic front: its $600 million Bethworks Casino in Pennsylvania is scheduled to open by mid-2009, while Adelson is keeping close tabs on his hometown of Massachusetts, where Governor Deval Patrick is campaigning to legalize casinos. In a meeting with Patrick’s advisers last May, Adelson claimed he could create “the largest building in the world in two years” if granted permission to expand into Massachusetts.
Adelson’s long-stated goal has been to surpass Bill Gates and Warren Buffet as the richest man in America. If Wall Street rallies behind him as he builds new gaming, entertainment, convention and shopping complexes throughout Asia and the U.S.—with Europe one of his other potential markets—there’s no telling how large his bankroll will grow.
Anything is possible, because Sheldon Adelson thinks, and gambles, bigger than anyone in the business. “You have to challenge the status quo,” he told CNN in an interview last year. “You have to change the status quo, and if you change it in any business, success will follow you like a shadow.”