George Tanasijevich, president and chief executive officer of Marina Bay Sands Pte. Ltd. and managing director of Global Development for Las Vegas Sands Corp., talks to The Saigon Times Daily about this corporation’s investment plan in Vietnam. Excerpts follow.
The Saigon Times Daily: Building casinos is a hot issue more than ever in Vietnam, as covered on local media. Do you follow this debate in Vietnam and what is your comment on this?
Yes. We follow the news in Vietnam. I think that when a new market is considering casino-style gaming and integrated resort (IR), it is always good to have a healthy debate at the beginning so the people can express their opinions, so that they can learn more about the industry. The information can be gathered and that is the best way for a new market to make the right decision about IR.
Your project will have to face legal framework issues in Vietnam as Vietnamese people are not allowed to enter a casino. To our knowledge, the Government is examining some options for legalising casinos and gambling centers. Recently, the Minister of Finance went to Singapore to learn about this. Do you have any comment on this?
I think at the early stage that Vietnam is in right now, it’s critical to gather all of the relevant information and make sure that you are working off the facts, not misperceptions. And if you start with that, you can have a proper discussion that will lead to the right decision. I think the controversy that might have been expressed relates to social issues and Singapore provides a good model for Vietnam to study, because it has done a very good job of creating a system of social safeguards that are designed to protect people from going to a casino too frequently or to even keep some people out. There is an entry levy system here which requires Singaporeans and permanent residents to pay a levy to be allowed into a casino for a certain period of time. There are certain groups of people who are excluded from the casino because of their statuses of being on public assistance or bankruptcy or having a certain background.
So there is a whole range of things that a new market can look to incorporate into its system of regulations for casinos and Vietnam needs to decide what the appropriate arrangement is for it. It may be something similar to Singapore or maybe something different but we, as an experienced operator, are available to participate in discussions with the Government about these types of measures to assure the people of Vietnam and its Government are comfortable with the concept and that you have a positive result in the event that you move forward with the IR.
Some sources from the Vietnamese government revealed that your project has been approved by the Government, or has received positive signals. Is it true?
No, no. That’s not true. We’ve had some discussions with Government people to help them understand what our industry is about and how we put together an IR that is appropriate for a particular market, how we manage the casino aspect of it and effectively implement social safeguards. So it is really a part of the due diligence process that the Government is going through in order to understand what the opportunity is and to make the right decision.
So far, most of the gambling center projects in Vietnam are located in remote areas or in tourism or coastal areas. But as announced, you want your projects to be developed in highly populated cities like Hanoi and HCMC. Why?
The city environment is where our business model is most effective. Our IRs are very much focused on both the leisure traveler and the business traveler. We look to invest billions of dollars in creating iconic architecture structures that are very strong in terms of attracting tourism and we need to be in a market that is well connected to markets outside of where we operate. Therefore, strong international airports are very important for us. The distant or the remote leisure destination lacks this kind of accessibility and does not work for our business model and does not position the IR to deliver the positive results that you see Singapore is experiencing at this time.
Actually we still wonder why you are so fascinated in creating your IR in Vietnam, even two IRs in HCMC and Hanoi, while there are only a few IRs in the world. Could you please say why you want to invest in Vietnam?
- We think that Vietnam is a very exciting place for tourism today. We think that Vietnam is on the upswing. Vietnam has rich cultural history and lots of existing sites that are attractive to international tourists. We think that an IR serves as a very strong entry point for those international tourists who can come in and experience what we have to offer but then dig deeper into Vietnam and experience some of the great things that you have in your country.
We also like the geographical location of Vietnam. We think it is positioned well within Asia. Asia is a very strong performing part of the world in terms of its economy. We think we could deliver benefits within Vietnam that would be very important to the Vietnamese people. We’re looking to come in there and create tens of thousands of jobs that would provide a source of economic vitality to this market. It could give careers and job opportunities to Vietnamese people. We think, in that respect, it positions Vietnam to prosper and continue on the track they are now right now and well into their future.
To my knowledge, whether or not to have a casino had also been a hot debate topic in Singapore before they said yes to your project. So could you please tell us how you convinced Singapore to say yes?
Well, the Singapore government made its own decision. They went around the globe to all the major markets that had casino-style gaming and did a study of what worked there, what did not. After completing that process, they determined that the upside or the benefits that could come from IRs far outweighed any type of negative consequence. In fact, there are ways to mitigate the negative consequences that sometimes people focus on, through the selection of the appropriate operator and establishing the right framework for the operation of casinos. And they decided to get serious about tourism.
And the results have been dramatic and immediate. The first year of partial operations of the IRs in Singapore led to 20% increase in the number of foreign tourists coming there in 2010. Last year, we (Singapore) welcomed 13.2 million tourists - a growth rate of around 13%. The number of people coming in is growing dramatically and the amount of money they are spending here to stimulate the economy has been substantially more. And this is all leading to an economic impact that really goes throughout the island. Marina Bay Sands has been estimated by The Economist to have been responsible for the creation of 37,000 jobs, island wide. So you see the positive benefits that come from it.
Could you tell us the number of Vietnamese visitors in Marina Bay Sands?
We do not specifically break that down. We are a publicly-traded company so we have certain disclosure requirements that determine what we can release to the public. But rest assured that Vietnam is an important source of tourism to Singapore. It is one that we are looking to grow everyday. We conduct road shows in Vietnam to try to explain to the people who are the organizers of the events or leisure tourist agents on what we are offering in Singapore in order to promote Marina Bay Sands to Vietnamese travelers.
I would like to have a follow-up question on your entertainment component and cultural investment. If your project in Vietnam is approved, how much will you invest in the cultural component in comparison with other elements such as gaming center and hotel?
- This is the kind of thing that we would learn through research as we move forward with the development of our concept. The best way for us to answer your question correctly is by working closely with local people. We will do this through the people we hire; we would do this through consultants, through our communication and collaboration with the government. There are so many ways that we could be able to do our research to figure out physically what element should be put in this building to reflect Vietnamese culture or would be able to host the events that would be cultural in nature and promote Vietnam and its history. So it is a part of the process that we go through as we’re designing a building and deciding how we can program it. It is a collaborative effort and we do not assume to know the answer right now.
How patient are you with your project in Vietnam? To make it specifically, if we assume that the Government does not approve it this year or next, will you be patient enough to wait for another two or three years? What is your roadmap or timeline for this project?
It is our belief that IRs designed and developed by Las Vegas Sands contribute immensely to the markets in which we operate. So our view is you can’t do it too soon but you could not possibly do it too late. We do not put a precise timetable on this project because as I say, it does not depend on us, but it is the decision of the Vietnamese people and Vietnamese Government. What we are trying to do is to facilitate that process and to provide information on how our industry works, to explain how we manage responsible gaming issues, to show them our track record, to host them on our property. So they are informed about what we can do and what benefits we could bring to the local society and hopefully things could move along.
The Government still stands firm on banning local people from the casino. So if this decision does not change, will you still move forward with your project in Vietnam?
I think the objective of the government should be to figure out what part of Vietnamese society should be allowed access to the casino and which part should not. Honestly, the way we look at the opportunity in Vietnam is that there is a segment of society that can afford to responsibly participate in gaming activities and therefore they should be allowed entrance to the casino. There are certain groups, because of the income that they make and certain circumstances that is not appropriate for them to participate in gaming activities, so they should not come in. We don’t want them as our customers.
I heard that you have already created the design for the HCMC project. What about Hanoi?
We haven’t built any models yet. We have done some designs. We are exploring Hanoi right now to see where the most appropriate location for our project could be. It is the important first step because it could impact the design and the style of our project. So we are still in the process of doing our homework on that. Generically speaking, we are looking to create something that is not existed in Hanoi, something that is iconic for the city, something that could represent Hanoi as a landmark property.
We are very impressed with your design for the HCMC project with the image of two sails in a ship. How you could be sure that it is could be the iconic image for HCMC and Vietnam?
We go out and find the world’s best designers and architects and engineers. And we challenge them to create something that is new and different, something that is interesting and challenging and could draw attention and tourism. So we have a lot of creative minds working on this right now and I’m very confident that we could come up with something that is appropriate for both cities.