Spain's Big Gamble: What Two Cities Will Give Up to Win EuroVegas

Billionaire casino magnate Sheldon Adelson may be getting lots of attention in the U.S. for his outsize support of Republican presidential candidate Newt Gingrich, but in Spain, he represents a different sort of aspiration. In a country well on its way to a double-dip recession, Adelson plans to build a $22.3 billion resort that promises to bring scads of tourists and jobs to the country. Yet, because he has not decided on an exact location and because his company, Las Vegas Sands, has what it calls "development needs" that include concessions currently contradictory to Spanish law, the effort is generating nearly as much controversy as enthusiasm.

The EuroVegas project envisioned by Adelson would create a Vegas-like strip of 12 hotels, dozens of restaurants, a convention center, three golf courses, a stadium and six casinos. According to a study of the project by the Boston Consulting Group, which was obtained by El Mundo newspaper, the complex would generate 261,000 direct and indirect jobs — and this in a country with 23% unemployment. Needless to say, those kinds of numbers have made EuroVegas an exceedingly attractive prospect for both Barcelona and Madrid — the two cities that, after years of scouting and negotiations, are the finalists for Adelson's European venture.

"We want it to be located somewhere with significant tourism infrastructure already in place," says Ron Reese, vice president of public relations for Las Vegas Sands. "A transportation system able to handle the kind of numbers we're talking about. Proximity to other countries and, ideally, mild weather."

Barcelona and Madrid both fit the criteria, which is why the longtime rivals in everything from political power to soccer now find themselves furiously competing to win Adelson's favor. For Barcelona, that means playing up the region's hedonistic advantages. "Independent of what the other candidates may be, Catalonia is a business-oriented community with a skilled labor force, an attractive environment with fantastic weather, Gaudís and other wonderful architecture, and good cultural amenities," says Andreu Mas-Colell, economy councilman for the Catalan government. "And of course, we have the Mediterranean Sea." What landlocked Madrid lacks in sandy beaches and cruise ship arrivals, however, it makes up for in geography and infrastructure, says Jesús Sainz, chairman of PromoMadrid, a government-owned company that promotes the region. "Between our airport and the high-speed rail line, we already have the necessary transportation hubs. And it's easier to find lots of flat, available land near the urban center."

But these respective attractions may be of little interest to Adelson, who has taken a realpolitik view toward the decision. "We selected Spain to be the location of our European strip number one, primarily because of the weather," he told an investors' conference in September. "And second point is that unemployment in Spain is significant and assures us the support of the government." By support, Adelson appears to mean substantial incentives. "I wouldn't call them demands," says Reese. "I would say development needs. We have an internal process we go through and in certain circumstances, we're just not able to do business — if, say, the corporate tax rate too high."

Although Reese declined to name those needs, the Spanish media has not. According to El País and El Mundo newspapers, Las Vegas Sands has requested that labor laws be relaxed, that rules designed to combat money-laundering be eased, that it be freed from paying Social Security and all taxes for its first two years of its existence and that visa restrictions be lifted for foreign employees. The company has also requested that smoking, which was outlawed in all enclosed public spaces last year, be permitted.

How far will the two candidate cities go to win the EuroVegas prize? Madrid regional president Esperanza Aguirre told a press conference in January that she would "change all the norms that have to be changed." Although other members of her People's Party, including the Tax Minister of the central government, have since reined her in, all the involved governments have said they are willing at least to negotiate with Las Vegas Sands. "It would never be a tax haven," says PromoMadrid's Sainz. "But there are legal reductions that could be made across the board, for example to the gaming tax." For his part, Catalan economy councilman Mas-Colell says that while many of the negotiations will take place at the national level, "we are proceeding speedily with those that fall under our responsibility."

The perceived willingness of the ruling parties in both regions to play ball with Adelson has provoked harsh criticism from their opponents. In the Madrid regional assembly, Union, Progress and Democracy party spokesman Luis de Velasco accused Las Vegas Sands and its supporters of "trying to establish the Independent Republic of Gamblingland." In Barcelona, Pere Navarro, general secretary of the Socialists' Party of Catalonia, says that while his party understands the importance of stimulating jobs, the development doesn't seem to fit with the city's urban model. "These kinds of installations can pose risks to mobility, to the environment and to our workers," he says.

On Feb. 22, a coalition made up of environmental, legal and union groups launched a national campaign to squash plans for the strip — wherever it may end up. "Obviously, unemployment is a hugely pressing issue," says Juan García, spokesperson for Ecologists in Action, the group that organized the coalition. "But there are jobs, and then there are jobs. Just because EuroVegas dangles the promise of work, doesn't mean we should abandon all the social and environmental protections the European Union has worked so hard to establish."

In the 1950s film Bienvenido Mr. Marshall!, a town in central Spain learns of an upcoming visit by an American delegation and, in the hopes of winning the same kind of financial rescue the U.S. was then extending to postwar Germany, remakes itself into what it thinks the Americans want. No one has asked the locals in Madrid or Barcelona to dress in flamenco dresses or bullfighting costumes for EuroVegas, but that hasn't stopped newspapers in both regions from making frequent reference to the film. As a headline in El País put it not long ago, "Bienvenido, Mr. Adelson?"