The Madrid Heist: Sheldon Adelson's EuroVegas Casino Sets the Rules in Spain
The billionaire tycoon who tried to buy Mitt Romney the presidency is now muscling his Las Vegas Sands Corporation into Spain, re-writing the country's laws so that the new sprawling EuroVegas casino operates tax-exempt in Madrid.
After a long year full of budget cuts to health care, education, social services and research, Spain's government has not hesitated in showering the EuroVegas project with all the tax and legal exemptions that U.S. magnate Sheldon Adelson has required in order to develop his lawless city in our community.
In September, Spanish Congress modified local revenue services laws, allowing tax exemptions while approving budget proposals that suffocate the social system. Almost two months later, the Madrid Assembly ratified and broadened all the privileges it had offered EuroVegas, including the privatization of Madrid's health care system.
The Adelson scandal dates back to late 2011, when several Spanish media outlets published demands made by his Las Vegas Sands Corporation in order to get the EuroVegas gambling complex under way. The conditions included the modification of fundamental tax, labor and social laws.
Now, more than a year later we are witnessing what seemed unacceptable before: Spain's local and autonomous governments catering to each and every one of LVS's demands, and giving EuroVegas the red carpet treatment. It is the intolerable spectacle of a multinational corporation enacting laws that impact Spanish society, health and communities.
In November, a month before the last legislative modifications to the EuroVegas plan took place, Michael Leven, LVS president and COO, explained to the Council members that:
“Our EuroVegas Strip operations in Madrid are underway. We’re still meeting with government officials. Financial aid and incentives, legal tender, land acquisition and financing activities are also underway. Authorities await our detailed plans to be presented at the beginning of January. That will be the moment when we’ll have more details as to which laws will be approved in our favor.”
With the latest legislative modifications carried out by the Community of Madrid, this autonomous government — along with the central and local governments — are serving as mere managers of the multinational’s interests, legislating in areas that LVS executives were privy to long before Madrid authorities and citizens were informed.
Our calculations of the corporation's wrong-doing have not only been right, but in some cases they have surpassed our estimates. Despite this, the Spanish government has tried to discredit warnings with surreal-sounding rhetoric to justify the corporation's economic and legal abuses. Such is the case with the establishment of a new legal initiative, the Centros Integrados de Desarrollo (CID), or Integrated Development Centers, under the Fiscal and Administrative Measures Act of the Community of Madrid.
A mere euphemism for the EuroVegas project, this hastily designed institution prompts the rather alarming question: What do the Community of Madrid authorities actually understand, and mean, by "development"?
Although the new institution’s stated objective is to stimulate investment and job-creating projects, the first paragraph of its mission statement already presents a clear picture of its truer goals and the entities its laws will benefit:
“The physical and operational settings typical of gambling casinos that are present in these Integrated Development Centers have challenged the traditional notion of gambling by addressing situations and new elements not taken into account by the current general regulations on gambling.”
The CID will benefit from numerous incentives, such as tax exemptions for hiring workers, an annual exemption on material purchases and facility investments, and a 95% exemption from the Tax on Capital Transfers and Documented Legal Acts. Also, the project allows a gambling tax rate drop of 10-20% (compared to the current ceiling of 45%).
As revealed in the Economic-Fiscal Report published by the EuroVegas NO Platform, the revenue balance is not promising for public administrations, taking into account the impact of the tax exemption on gambling (between €2.5 billion and €76 billion based on revenues for the past 10 years), the land value tax (€55 million in the past 10 years), the Tax on Building Works (between €216 million and €252 million), and the contribution for infrastructure (approximately €2 billion).
The numbers worsen if the project is deemed unprofitable and abandoned after the evaluation of its first phase (in six years), given the investments on infrastructure that have already been made, plus the tax exemptions on gambling, land value and building works. Around €1.8 to €3.7 billion would be lost to the public—an enormous setback given Spain's recession.
Potential revenue decreases to local companies would in turn result, further deteriorating the economic and social crisis. Which is why it seems unbelievable that, armed with vague promises and projections, this framework has been established which will only benefit investors and not the interests of the public.
Spain has a long list of mistakes it made on past failed projects: Terra Mítica Park, Reino de Don Quijote, Los Monegros, Time Warner and Isla Mágica, to name a few. The country needs another type of project that creates stable and dignified employment, that is environmentally sustainable, and that benefits the economic and social interests of the community.
The Community of Madrid’s new Gambling Act includes clauses that not only promote gambling but also benefit mass-scale money laundering. Casinos will be allowed to “grant loans, credit or any other equivalent financial method to the gamblers.” This goes hand-in-hand with any new serious violations having less severe penalties than previously established.
Thus, while government hardens the penal code to punish Spanish citizens who exercise their right to protest and engage in civil disobedience against lawless corporate-government collusion, international mafias are given the green light to commit felonies that land them charges of misdemeanors.
Essentially what we're seeing are Spain's doors opening further to organized crime under the pretense of EuroVegas. There have been celebrated dinners with ex-Madrid President Esperanza Aguirre on the matter. There have been high-level meetings with important members of the regional administration, like Ignacio Gonzalez who ensured in December that “all efforts are being made to carry out this project.”
Then, after Sheldon Adelson’s last visit to Madrid, it was suddenly announced that the EuroVegas skyscraper complex would be built on a 1,850-acre plot of land in Alcorcón, a suburb on the city's outskirts. The deal has been struck. Spanish lawmakers have bowed to all demands made by the American billionaire.
And the people of the capital, struggling amid outrageous unemployment and a vanishing health care system, see once more how investment corporations set the rules of the game and have the power to bend laws in order to serve their own interests.
Maria Fernandez is a member of the EuroVegas NO Platform in Madrid. This article was translated from the Spanish by Mariné Pérez.