Sunday, August 28, 2005
Copyright © Las Vegas Review-Journal

CHAPTER 31: SHELDON'S IS BIGGER: Adelson, driven to win, does so by thinking big

Wynn rival scales heights with Venetian

Sheldon Adelson, pictured at the construction site during the groundbreaking for the Venetian in April 1997, likes to remind interviewers that he wasn't born with money like other wealthy casino owners. Photo by Jeff Scheid/REVIEW-JOURNAL FILE PHOTO Conventioneers attend COMDEX in 1996. Casino icon Sheldon Adelson developed the Computer Dealers Association convention into one of the world's largest trade shows. Photo by Jeff Scheid/REVIEW-JOURNAL FILE PHOTO

If Steve Wynn didn't have Sheldon Adelson in his life, he would have to invent him. Seldom in the turbulent history of the Las Vegas casino business have two casino-owning titans been more intense about wrecking each other's careers. Forbes in March 2005 quoted Adelson calling Wynn "a liar" and "an egomaniac" and described the two as detesting each other and knocking heads for a decade.

On the surface, they couldn't be more different.

Wynn is the quintessence of Vegas polish. Tall, well groomed, stylish, a charismatic speaker. To many, he defines the new Las Vegas casino owner. Wynn plays down his Jewish ancestry (the family's name was changed from Weinberg) and revels in being schooled by his father, a professional gambler.

Adelson is a squat, croaking micromanager with a wisp of vanishing gray hair and the ability to make even a welcome speech sound like a direct order. He is proud of his Jewish-Ukrainian ancestry and is a dedicated supporter of Israel. He maintains business ties with that country.

The seventy-one-year-old Adelson likes to remind interviewers that he wasn't born with money or "swaddled in green felt" like others among the Strip's wealthiest casino owners. His father was a Boston taxi driver, and his mother ran a knitting shop. As an infant, Sheldon was so tiny, and the family's home so small, that his first bed was a dresser drawer.

But Sheldon Adelson has made a name for himself in business by not doing things in small ways. For example, he developed the Computer Dealers Association (COMDEX) convention into one of the world's largest trade shows. And he is planning to make the Venetian the world's largest hotel complex.

Owning the COMDEX show without having a hotel and casino to complement it made for an incomplete business model. In April 1989, Adelson, through his Interface Group, bought the Sands from Kirk Kerkorian for $110 million. Only one year earlier, Kerkorian had purchased the Sands and Desert Inn from Howard Hughes's Summa Corporation for $161 million.

While Adelson may have gotten more ghosts than gamblers for his money, the legendary Sands stood in a prime location. ...

Adelson wasn't satisfied with just being a high-flying businessman. He yearned to spread his conservative, antiunion philosophy. He spent $2 million to support local candidates, and his battle against the Culinary union made him such a polarizing figure that his support for anyone was like the kiss of a black-widow spider. He was hated by a large segment of the voters.

In 1998, with the Venetian under construction, Adelson financed a $2 million advertising blitz. Its purpose was to oust two incumbent commissioners and prevent a new one from gaining a seat. It fizzled like wet fireworks.

He joined forces with his sometime nemesis, Steve Wynn, and the two men spent freely to defeat a bid for Congress by Shelley Berkley. Despite their efforts, Democratic candidate Berkley was elected to Congress and subsequently was re-elected.

While Republican Kenny Guinn was on his way to defeating Jan Jones in the governor's race, Guinn's strategists acknowledged that one of the turning points in the campaign was the rejection of Paycheck Protection, which would have prohibited using union dues for political action without written consent from individual members, and the wide dislike for Adelson.

"Paycheck Protection was a critical issue, but our decision had a lot to do with Sheldon Adelson," one top Guinn insider said.

Adelson was constantly battered by criticism because of his resistance to the Culinary union's organizing efforts. He offered wages and benefits to hotel and casino service workers that were in some ways superior to the union's Strip contract.

By going to war with the Culinary union and throwing cash around, Adelson, a staunch Republican, allowed himself to become the Democrats' best friend.

"The easiest way to beat Sheldon's candidates is to remind voters they're Sheldon's candidates," said Democratic political strategist Dan Hart. "He's his own worst enemy."

Adelson had one success. He got former police officer Lance Malone elected to the County Commission. Malone was defeated after one term in office following an ethics scandal and was later indicted in a federal corruption case.

Adelson once claimed a swastika written in soap had been found at his home. Rumors of death threats surrounded him when he was battling the Culinary union. Soon the outspoken casino boss was traveling with armed, ex-Mossad bodyguards who made little secret that they carried guns even when they accompanied Adelson to an editorial board meeting at the Las Vegas Review-Journal.

Adelson's obsessive concern was evident in his attention to detail. Even notorious micromanager Steve Wynn raised his eyebrows at Adelson's relentless focus not only on the material that went into the Venetian, but the cost to the penny of each bolt of cloth, slab of marble, and roll of carpet. Adelson took pride in discussing the quality of the Berber carpet and the way he negotiated its purchase at the best possible price.

During the construction of the Venetian and Bellagio, the Wall Street Journal reported that Adelson sparred with Wynn over whose suites were larger and more opulent. It was evident that size mattered to both men. ...

At the Venetian's opening, Adelson was heard to remark, "Either I'm the stupidest guy around or the biggest crapshooter in town."

He was neither, but he was at the high-stakes table. The Venetian, with its superior rooms, upscale restaurants and spa, splendid marble interior and gondoliers paddling through a glass-covered faux canal, was the latest competition for the town's three other top-class hotels.

Questions persisted about the Venetian's viability as a high-roller casino. What made the resort viable was its million-square-foot Sands Expo convention center. With the facility packing in tens of thousands of conference-goers each year, and convention space leased at a premium, Adelson had a built-in customer base that promised to overcome weaknesses in the fledgling casino's marketing program. With all those laptop-toting businessmen in the house, Adelson believed he could overcome the project's high-interest financing and show a healthy profit. In which case, he was prepared to finance his next tower and build his palace in Macau.

The conservative Adelson remained an enigma in the hedonistic casino subculture in part because of his devotion to Israel.

Authors Sally Denton and Roger Morris observed, "Adelson, the billionaire promoter and right-wing Zionist with business and political ties to Israel, had the same tough mentality as the Strip's former overseers."

And he was even tougher on those who tried to embarrass him.

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Adelson and Wynn continued their rivalry in 2005 as they expanded their footprints on the sand. Wynn accused Adelson of not providing enough parking space for customers and employees. Adelson responded by building a seven-story underground parking garage at his Palazzo new addition.

The Venetian announced its Palazzo project next to the Venetian would have fifty-five floors instead of forty-two floors. This meant the new building would be 718 feet high instead of the previously announced 460 feet.

The reason was clear.

Wynn's new project would be only fifty stories and 613 feet high.

It appeared Sheldon's would remain bigger.

In 2004, he opened a $1 billion credit line in August, and in September he filed a $350 million IPO. After enduring snickering ridicule by analysts when he shopped the original financing for the Venetian project, Adelson now was warmly received. His initial public offering was an opening-day sellout. In less than five years, Adelson had gone from being a suspect to a prospect with the success of his Venetian and Sands Macau casinos.

Married and with five children, his driving personality doesn't let him take time out to enjoy what he has achieved. The son of the Boston cabby had arrived and was now worth upward of $17 billion according to an estimate in Forbes magazine.

If he could manage to keep his ego in check and not waste energy sparring with his neighbors on the Strip, there was no stopping Sheldon Adelson.