Bloomberg News

Adelson Says He Can’t Recall 2000 Macau Licensing Talk

April 04, 2013

Las Vegas Sands Chairman Sheldon Adelson

Sheldon Adelson, chairman of Las Vegas Sands Corp., said yesterday that after the Macau government in 2001 created a public tender process for gaming concessions, Richard Suen’s ability to get Las Vegas Sands a license was “completely cut off” because it had become a “beauty contest.” Photographer: Daniel J. Groshong/Bloomberg

Las Vegas Sands Corp. Chairman Sheldon Adelson told a jury a Hong Kong businessman who seeks $328 million over claims he helped the casino operator get a Macau gaming license couldn’t deliver what he promised.

“I think he asked me whether or not, if he could deliver a license, I would like it,” Adelson testified yesterday at a trial in state court in Nevada, recalling his early meetings with Richard Suen, a business friend of his brother Leonard Adelson. “He never said anything more than I know somebody who knows somebody who knows somebody.”

Adelson said under questioning from Suen’s lawyer, John O’Malley, that he didn’t recall discussing the possibility of pursuing a Macau license with Suen in 2000 because at that time nobody knew for sure whether the Macau government would discontinue the monopoly Stanley Ho had on gambling in the former Portuguese colony.

Suen alleged in his complaint that Adelson breached a 2001 agreement to pay him and his associates $5 million and 2 percent of the net income from the company’s Macau casinos if it was awarded a permit.

Second Time

This is the second time the claims have gone to trial. The Nevada Supreme Court in 2010 reversed a $43.8 million jury award two years earlier in favor of Suen and sent the case back for a new trial. The state high court found that the trial judge incorrectly allowed so-called hearsay evidence linking meetings with government officials in Beijing that Suen helped arrange with the award of the gaming license.

Adelson, 79, said yesterday that after the Macau government in 2001 created a public tender process for gaming concessions, Suen’s ability to get Las Vegas Sands a license was “completely cut off” because it had become a “beauty contest.”

“He couldn’t give us anything that wasn’t available to us,” Adelson said.

Clark County District Court Rob Bare denied a request yesterday by Suen’s lawyers for a mistrial after Adelson brought out brochures to demonstrate that he didn’t need Suen to lobby for him with the Macau government about Las Vegas Sands’s ability to bring convention business in addition to gambling to Macau.

‘Our Qualifications’

“This is exactly what the Macau government wanted,” Adelson said, referring to the books he pulled out of a briefcase while on the witness stand. “These were our qualifications.”

Bare instructed Adelson not to produce any further items he might have brought to court.

Suen claims that meetings he arranged between Adelson and Chinese officials, including the mayor of Beijing and the vice premier responsible for Hong Kong and Macau, were instrumental in leading Edmund Ho, the former chief executive of the Macau Special Administrative Region, to award the company a gaming license in 2002. Edmund Ho initially had expressed misgivings about Las Vegas Sands’s large-scale plans, according to Suen.

Brother Lenny

Adelson said he attended the meetings at the urgings of his brother Lenny, who had told him it would be good to show Chinese officials that he was interested in their interests. Adelson said the meetings were organized by a Chinese committee to promote international trade rather than by Suen and his associates, as he had earlier believed. In a 2005 deposition played in court, Adelson said that Suen or his associates had set up the meetings.

The Chinese officials only cared about whether he would make an investment in China, Adelson said yesterday.

Adelson added the officials were also interested in what, if anything, he could do about opposition in U.S. Congress to Beijing’s bid to host the Olympics.

Calling DeLay

Adelson testified that he called Congressman Tom DeLay of Texas, then the Republican Majority Whip, from a cell phone. The Sands chairman confirmed his earlier testimony that he relayed to a deputy of the Beijing mayor that the House of Representatives wasn’t going to vote on a resolution discouraging the U.S. Olympics Committee from endorsing Beijing’s Olympics bid on human rights grounds until after the vote, later that month, by the Olympics committee.

Adelson is expected to continue testifying today.

Before the Portuguese colony became part of the People’s Republic of China in 1999, gambling in Macau was a monopoly concession that since 1962 had been in the hands of a company controlled by billionaire Stanley Ho. In 2001, the Macau government invited bids for casino concessions to boost growth through competition.

Las Vegas Sands has said in court filings that it obtained the Macau license after it took the suggestion of the local government and joined the bid by Galaxy Entertainment Group Ltd. (27), backed by two “prominent and wealthy Hong Kong families” who had the wherewithal to invest in Macau and lacked casino expertise.

2002 Concessions

Wynn Resorts Ltd. (WYNN:US), Stanley Ho’s company SJM Holdings Ltd. (880) and the Galaxy/Las Vegas Sands group were awarded the three concessions issued by the Macau government in 2002. Las Vegas Sands later that year got a subconcession from Galaxy to build its own casinos in Macau.

Adelson disputed that the subconcession was a license, saying that Las Vegas Sands operates its casinos under Galaxy’s license and that, unlike Ho’s company and Wynn Resorts, the company can’t sell subconcessions to other casino operators.

“The government wanted our expertise to change Macau, and that’s what we did,” Adelson said. “We changed Macau.”

The case is Suen v. Las Vegas Sands Corp. (LVS:US), 04A493744, Nevada District Court, Clark County (Las Vegas).

To contact the reporter on this story: Edvard Pettersson in Los Angeles at epettersson@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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