Casino owner is tycoon most have never heard of
Sheldon Adelson, the casino mogul, has seen his personal net worth plummet by more than $15 billion in recent months as Wall Street investors...
The New York Times
LAS VEGAS — Sheldon Adelson, the casino mogul, has seen his personal net worth plummet by more than $15 billion in recent months as Wall Street investors have grown more bearish about the prospects of casino companies that are pushing aggressively into Asia.
That slide might put a crimp in his stated goal of surpassing Bill Gates and Warren Buffett, the only two titans ahead of him on Forbes' recent list of the richest people in the United States.
But a few miserable months on the financial front are not likely to have much of an impact on him — or the charities and various conservative political causes he supports.
Adelson, 74, still holds $19 billion worth of stock in the Las Vegas Sands, which operates the Venetian here and also a pair of giant casinos in Macao, the Chinese territory near Hong Kong that has surpassed the Las Vegas Strip as the world's top gambling market.
This past week, the Venetian formally opened its new Palazzo tower. At 7,200 rooms, the expanded Venetian is the world's largest hotel.
Few Americans have made as much money in China as Adelson, and he is a major donor to the Republican Party.
Yet Adelson may well be the richest American that most people have never heard of.
One explanation for his relative anonymity is that he is a newcomer to the highest altitudes of the fabulously wealthy.
The Las Vegas Sands went public in December 2004, and over the next two years his net worth soared by $17.5 billion.
That works out to almost $1 million an hour, weekends, holidays and nights included.
"He got richer faster than anyone else in history," said Peter Bernstein, co-author of "All the Money in the World," a book about the people on the Forbes 400 list.
Certainly people in Las Vegas know Adelson, a querulous figure who has existed in a near-constant state of embattlement since building the Venetian in the late 1990s.
He filed claims and counterclaims against scores of contractors who worked on that project, and over the years he has started legal fights with the local American Civil Liberties Union, the Culinary Workers Union, the Las Vegas Convention and Visitors Authority and even the power company, which he thought should pay the cost of removing utility poles from the Venetian site.
"Sheldon is a brilliant businessman, but he can be enormously difficult," said Gary Loveman, chief executive of Harrah's, the Las Vegas casino giant.
"He's very tough," he added. "Some would say unreasonably tough."
Adelson declined repeated requests to comment for this article.
Longtime friends and associates said his hard exterior is rooted in his days growing up in a rough-and-tumble section of Boston, where his father drove a cab.
"Rich in our neighborhood then was having $3 in your pocket," said Irwin Chafetz, a Sands board member and former business partner who has known Adelson since grade school.
Today Chafetz's childhood friend owns homes in Las Vegas, Malibu, Boston and Tel Aviv, and keeps several jets, including a Boeing 767, a 747 and a 737.
Adelson started a business selling toiletry kits to motels, tried his hand at the mortgage-broker business, and in the 1960s he joined Chafetz and another friend from the old neighborhood, Ted Cutler, in a charter tours startup.
But it was not until he founded Comdex, the premier computer trade show through much of the 1980s and 1990s, that he hit on an idea that propelled him into the upper reaches of the wealthy.
To this day, Cutler is not sure if his longtime friend even knows how to use a computer ("we always had people working for us who understood them").
But then a passion for technology was not what spurred Adelson, a college dropout then in his mid-40s, to create this yearly festival for technology buffs held every November in Las Vegas.
Rather, friends and former work associates said, he was enthralled by the idea of renting convention space for 25 cents a square foot and selling it to vendors for $25 or more. Adelson's timing on Comdex could not have been better — yet he seemed to feel more pressure, not less, according to former colleagues.
"His yelling was legendary," said Peter Young, a public-relations practitioner who worked for Adelson for the 17 years he ran Comdex.
"To work with Sheldon you need to have a coat of Teflon," said Jason Chudnofsky, chief executive of Comdex under Adelson from 1987 to 1995.
It helped that his demanding and exacting boss was helping to make him rich, Chudnofsky said — and that his rants seemed largely about his own larger ambitions.
"Sheldon wanted to be richer than Bill Gates," he said.
To accommodate their growing trade business, Adelson and his partners — Chafetz, Cutler and Jordan Shapiro, an optometrist from the old neighborhood ("the boys," as they were often called internally) — bought the aging Sands Hotel and Casino from the financier Kirk Kerkorian, for $128 million.
"The Sands had enough land to build a convention center," Chafetz said. "That's why we got into the casino business."
When it was completed, at the start of the 1990s, the Sands Expo and Convention Center stood as the largest privately owned exhibition center in the country.
In 1995, Adelson sold Comdex to Japan's Softbank for $862 million, giving him a personal payoff of just over $500 million.
He and his partners were all in their 60s, but where the three other "boys" chose to semi-retire, Adelson made even bigger bets.
He demolished the Sands in a spectacular implosion (replete with an anticipatory fireworks show), borrowed hundreds of millions of dollars and in its place built the Venetian, which cost $1.5 billion and opened in 1999.
With the Venetian, Adelson broke the basic rules of casino design by building a facility that was geared toward conventions rather than centered on the casino.
Where the old way was to motivate guests to spend time on the casino floor by offering few amenities in the room, the Venetian parted from Las Vegas tradition, installing minibars and fax machines in each guest room.
His plans were met with skepticism, if not scorn. But the Venetian is now the Strip's second most profitable casino hotel, behind only the Bellagio, said Robert LaFleur, an industry analyst with Susquehanna Financial Group, though only a third of its revenues come from its gaming floor.
"He's shown people in Las Vegas that there's a different way to do things," said Mike Sloan, a retired casino executive who now consults for the MGM Mirage and other gambling concerns.
Yet despite the influential role he played in establishing Las Vegas as a top convention destination, he is better known locally for his quarrels and legal battles.
To cite but one of a long list of examples: his attempts to bar members of the Culinary Workers Union from picketing on the sidewalk in front of the Venetian, a case he pursued all the way to the U.S. Supreme Court (he lost). The Venetian is the only major Las Vegas casino that is nonunion.
Then there is his feud with Stephen Wynn, who built the Mirage and Bellagio, among other large Strip properties.
The two tycoons have fought over everything from the noises emitted by the artificial volcano in front of the Mirage to the size of the Venetian's parking garage.
"Sheldon is a man who harbors a lot of animosity toward a lot of people," Wynn said. "And when Sheldon is angry, he gets nasty."
The two are at it once again, this time in Macao — and so far, a stock-market slump notwithstanding, Adelson is beating his longtime foe.
He already runs two resorts in Macao (one has a casino three times larger than Las Vegas' biggest gaming floor), and his company, the Las Vegas Sands, is in the midst of spending $7 billion to $9 billion to build 13 more hotels there. The Sands is also spending an additional $3.6 billion on a casino hotel in Singapore.
Wynn, who is less bullish on Macao's prospects than Adelson, operates a single property in Macao.
"So much of their value is on the come, as they say in the gambling business," said LaFleur, the analyst, explaining the inflated price of Sands stock relative to Wynn Resorts and other competitors.
Adelson has five children from two marriages. He has given tens of millions of dollars to charitable causes, most of them Jewish-related, and has talked about donating billions more to foster medical research.
Last January he gave $1 million to American Solutions for Winning the Future, former House Speaker Newt Gingrich's political group, and more recently he helped to fund Freedom's Watch, a conservative response to MoveOn.org.
Yet Adelson is hardly slowing down to enjoy other aspects of life.
He is looking past Asia, already talking about replicating his Macao strategy and creating a mini-Las Vegas somewhere in Europe.
"I work for a guy who's obsessed," said Robert Goldstein, one of a troika of top executives who have been with Adelson since 1995.
Every time the Sands reaches another milestone, Goldstein said, his boss establishes a new, harder-to-reach goal.
"He has more money than he can ever spend but he has to grow it bigger," he said.
Copyright © 2008 The Seattle Times Company
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