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Las Vegas Sands Corp. (NYSE:LVS)

Q1 2008 Earning Call

April 30, 2008 5:00 pm ET

Executives

Sheldon Adelson - Chairman

Bill Weidner - President and COO

Brad Stone - EVP

Rob Goldstein - President, The Venetian and The Palazzo

Scott Henry - SVP

Bob Rozek - CFO

Dan Briggs - VP IR

Analysts

Larry Klatzkin - Jefferies

Felicia Hendrix -Lehman Brothers

Steve Kent - Goldman Sachs

David Faber - Credit Suisse

Robin Foley - UBS

Joe Carillon

Joe Greff - Bear Stearns

Celeste Brown - Morgan Stanley

Robert Armstrong - Simocos Capital

John Chen - Oak Creek

Kevin Mod - OD

Dustin Sevnti - Standard Pacific

Operator

Good day ladies and gentlemen, and welcome to the Las Vegas Sands First Quarter Earnings Conference Call. My name is Katie and I'll be your coordinator for today.

At this time all participants will be in a listen only mode. We will be facilitating a question-and-answer session towards the end of this conference. (Operator Instructions)

I would like to now turn the call over to your host for today Mr. Bill Weidner. Sir you may proceed.

Bill Weidner

And that concludes our first quarter, no hold it, I'm sorry. I have to say good afternoon to you all and thank you all for putting up with the technical difficulties that we experienced today.

On the call with me today partially perhaps the callers of this would be folks that are calling from further away. Mr. Sheldon Adelson, our Chairman is here and he is on the east coast connected in. Executive Vice President, Brad Stone is here. Brad Stone, is calling us from Macao. Rob Goldstein is here, the President of The Venetian and The Palazzo. Scott Henry is here; Bob Rozek, our Chief Financial Officer; Dan Briggs, our VP of Investor Relations.

Before we begin today, I need to remind you that today's conference call contains forward-looking statements that we're making under the Safe Harbor Provisions of Federal Securities Laws.

I would also like to caution you that the company's actual results could differ materially from the anticipated results in those forward-looking statements. Please see today's press release under the caption Forward-looking Statements for a discussion of the risks that may affect our results.

In addition, we may discuss adjusted EBITDA, adjusted net income, adjusted EPS, and adjusted property EBITDAR, which are non-GAAP measures. A definition and the reconciliation of each of these measures to the most complete GAAP financial measures are included in the press release. Please note that this presentation is being recorded.

By now, you should have all received our press release detailing our financial results for the first quarter of 2008. Our agenda today calls for as follows: I will begin with some summary observations and spend a few minutes on Las Vegas. From there we will turn our attention to Macao and address some of the recent developments there as well as the actions we have implemented as the market evolves and The Venetian enters into its eight month of operations. I will then make some closing remarks including some comments on our opportunities in Singapore and then we will move on to your questions.

In Las Vegas, at The Venetian, we delivered a very solid performance throughout the property in a challenging economic environment a testament to our convention based strategy. We soft opened The Palazzo in late December and its results have steadily ramped up as we spent the first quarter completing and introducing additional amenities to the property, with a grand opening of our entertainment offering this weekend the Broadway hit Jersey Boys on Saturday night. We were near completion of the product set at The Palazzo.

Turning to hotel operations, our hotel average daily rate and REVPAR statistics were solid, although less than we would have liked reflecting the conscious decision we made during 2007 to increase our allocation of rooms to the FIT marketplace in 2008. We've been able to respond somewhat to the softer FIT market by booking our group rooms. We did pay the price for that FIT exposure in the first quarter with lower occupancy than we had actually planned.

Looking at the two properties as a whole, first quarter gaming volumes were up across the board reflecting our now significantly larger asset base in Las Vegas. We've also seen a steady ramp particular in slot play throughout the quarter and into April as The Palazzo gaming business has continued to build as more of its features, including some of our high end suites have now come on line.

With The Palazzo now open for extending our successful convention based business model to a far larger 7,100 room's asset base. Now with the largest destination resort in the world nearly complete we are enthused about that fact. Hope to perform well in what is a challenging current marketplace, as well the future as Las Vegas can inevitably recovers.

Let's now turn to Asia, our progress in establishing the Cotai Strip in Macao as Asia's Las Vegas continues and our development of the Marina Bay Sands in Singapore is also progressing. At The Venetian Macao compared to quarter ended December 31, of last year, our visitation remained strong, our mass gaming business grew while our hotel rate and occupancy statistics remained solid.

There were two developments in the quarter in particular, which we want to address. First is that we lost significant amounts of market share of the VIP business, as a result of that loss in market share our EBITDA decreased by $8 million sequentially to $110 million for the quarter ended March 31 compared to $118 million in EBITDAR in the quarter ended December 31. It's clearly an unsatisfactory result. We've now take actions to remediate our VIP market share loss. The second item we're in particular discussion in the quarter, though we have not yet been able to get our ferry service approved to run on a 24 hour basis, and at 30 minute sailing frequencies.

But before, we will discuss those two important developments and our results in greater detail. We wanted to try to put the current state of market into a larger context by addressing the recent statements by Chief Executive, Edmund Ho, considering the new government policies that will guide the future of Macao's gaming industry. There is clearly much we do not know today about how these rules ultimately be put in place.

But looking at the big picture, we do believe there are some likely outcomes that will positively impact Macao's future, as a destination, and more importantly our position vis-à-vis that future itself. First it seems very clear that no additional concessions beyond the current six, three licenses, and three low sublicenses, will be granted for the foreseeable future, that's something that is not at all a surprise.

Secondly and clearly more importantly, it appears that no more applications for casinos will be allowed to be filed, no more landfill province for the development of casinos will be accepted, no more additional casino construction beyond what is already been agreed to by the government will be allowed, and no current casinos will be allowed to increase their gaming capacity.

We'll need to see how this is interpreted and enforced, but this policy has potential to significantly limit the addition of new VIP halls, gaming tables and slot machines. It's also possible that only those developments that are consistent with the evolution of Macao, into a multi-faceted business, to leisure destination will be approved. We understand that the current pipeline of projects under construction, approved or under discussion with the government will not be affected.

Francis Tam, the Secretary for Economy and Finance for Macao, was quoted in the Macao Daily Post on April 24, that and I quote, total casinos will not exceed 40, with Coati not surpassing a total of 10. The secretary Tam's comments reflect the government's view; this will be pretty interesting, considering that there are 29 casinos operating Macao today. These pronouncements are quantifiable and measurable, and provide a clear backstop to future supply growth.

Third and again depending upon enforcement, the item with the greatest impact on current gaming operations is the introduction of rules, to control junket room operators, licensing requirements, and junket commissions, as well as the cons for review of the current VIP room service contracts, which are effectively, sub casino licenses. We will stay acutely attuned to these developments, and react swiftly and appropriately to their effect.

In a long-term the phenomenal growth of visitation and gaming win, as a whole, first quarter visitation up 18%, gaming went up 66%, the big piece of that driven by VIP wins at 79%. But more importantly for the future, mass market table wins were up 40%, with slot wins of 85%. These gross statistics a test of the depth of the market has new high quality destination style products added to the market place.

This growing demand coupled with supply limitation backstop, that is the stated objective of Macao authorities, bodes well for the long-term prospects of our strategy. With a critical mass of superior complete destination supply on Coati, that will drive that growing demand and allow us to provide superior returns on the dollars we put to work in Macao. So, okay, that's 30,000 foot amplitude big picture, but what about today, our managing space market in light of both the dynamic nature of the market in general, and Macao's government's recent declarations.

First, let me address our approach to the VIP market. We certainly look forward to seeing how Macao's authorities proposed new junket up commission rules will be implemented. Successful implementation and enforcement of these actions could both limit the number of license representatives at the marketplace, plus limiting their ability to the smaller sub-unlicensed facility, and limit the number of VIP room casinos they operate in themselves. While we clearly support these actions by government, and believe they are consistent with the development of Macao as a more well-round tourist destination, we will not wait to see how this story develops.

Today, we've already responded and adjusted our commission rates to be more competitive in the VIP marketplace, with two principal objectives. One, growing our VIP market share and two, increasing our cash flow generated from this portion of our business. As government actions are sorted out, we'll react quickly to any actions that the government ultimately adopts. I would also point out that credit is also a very important part of the VIP picture. Historically, we've taken a conservative approach to our granting credit both to junket operators and individuals in the marketplace. But in the future, we'll begin to expand the amount of credit we are granting and continue to do so in a judicious way.

Second, let me address the critical element of building our mass gaining business for The Venetian Macao, our ferry service. We'll continue to press to achieve full operations, meaning 24 hour per day, seven day a week service, as well as more frequent service for our CotaiJets ferry service. We've already completed the trials required to achieve approvals to operate at night and have the equipment to operate on a 30 minute frequency to the Coati. And we continue to await a formal berth assignment approval from the Hong Kong Transportation Bureau. We already have enough ferries in our fleet. We will not be able to sail at night nor will be able to increase our frequency of service without moving from the Hong Kong authorities, to allocate our requested berthing slots.

This is particularly frustrating to us as we've been given assurances by the Hong Kong authorities in advance of completing our Ferry manufacturing orders that more than sufficient slip in berthing capacity existed at the Shun Tak Ferry Terminal in Hong Kong and that capacity would be made available for us as our boats were delivered. We understand there is plenty of berth and slot capacities available, but to our dismay the requisite frills of the Hong Kong authorities have not to date been received.

We look forward to increasing our sailing hours and sailing frequencies as soon as the Hong Kong authorities provide the requisite approvals. We'll be able to achieve a good frequency of service that's half hour frequency immediately upon the granting of berthing availability from the Hong Kong authorities. Additional ferry's that will be delivered in the coming months will allow us to provide optimal frequency of service as one sailing every 15 minutes to the Cotai Strip by August of this year.

Ferry services affect every segment of our Venetian Macao facility. The IP from regional and international markets with linkages to Hong Kong and Hong Kong airport have tables and slots particularly high repeat convenience by Hong Kong mass players. FIT rooms business, meetings and conventions, and trade shows for the convenience of delegate access, arena events, shopper convenience for retails sales and on and on. All are critical for maximizing the synergies of our integrated results.

Particularly important is we had more reasons to come to Cotai directly. The Four Seasons and the upscale shopping brands and the Four Seasons mall to be opened this summer.

Third, let me spend a moment on pacing our development activities. At this point it’s clear that the pace of approvals for development activities throughout Macao have slowed. Looking ahead we anticipate some additional near term slowdown as the government sorts it all out. We'll do everything in our control to pursue our announced developments as aggressively as possible and we anticipate that pace will pick up as the (inaudible) long incident reaches resolution.

Fourth and most importantly we will focus more directly on profitability from the current operations in the near term. We have staff for break neck growth to be ready for multiple openings one after another; for example, the staff at the casino with the Four Seasons property without any additional headcount.

We can operate our current facilities; The Sands Macao, The Venetian Macao more efficiently. Brad Stone is in Macao now heading up a swap team to rationalize operations. As we prepare for and open the Four Seasons. Rob Goldstein will be -- will focus on the evolving VIP market and direct customer marketing environment in Macao. As he will be there next week as well I. We can and we will execute better in the near term.

Our six factors of success measurement are still in place. Despite our inability to hold market share without responding to competitive jumping in commission pressures and the fact we have only partial ferry service in the first quarter. Nearly, 14 million visitors have experienced the Venetian Macao's since it opened approximately eight months ago.

Our top performance is solid with ADR reaching $232 for the quarter, Occupancy reaching 78.6% and REVPAR reaching $183. Our entertainment offerings to-date have worked. The opening of Cirque's 'Cosmos', in a custom built theater at the Venetian Macao this summer. And appearances by team USA as they prepare for the Olympics will expand our entertainment offerings further.

Our group meetings and convention business after a strong start continue to grow. The business is seasonal. So there are natural weaker and stronger periods of the months. But overall the trajectory is positive.

Retail sales figures of The Grand Canal Shoppes, with more stores opening all overtime and retail sales per square foot on average exceeding $700 today. More visitation and ferry service is set to drive those numbers higher in the future. Our retail operating is a clear success. Gaming volumes, well in the VIP market we certainly had a robust. We will be more competitive with commissions going forward and we'll grant more credit on a judicious basis. We expect to grow our share of this business and our cash flow. Our mass gaming volumes have been solid, clearly the largest in the Macao marketplace reflecting the acceptance and appeal of Venetian Macao.

We can squeeze more profitability from this robust base and we will. So what will drive our performance in the near-term? Besides executing better on operating efficiencies as we opened the Four Seasons, the most important development would be for more frequent CotaiJet ferry service from Hong Kong harbor to the ferry terminal at the foot of Cotai Strip, followed by direct service from Hong Kong international airport. These services will enable increases of visitation to Macao actually the Cotai to Macao and the Cotai Strip. And a more satisfying customer experience and more convincing for shoppers, arena and events attendees, convention and tradeshow delegates and others.

Second, the opening of the Four Season in Macao this summer, with the upscale shops of the Four Seasons mall will create more traffic to the Cotai Strip. Third, competitive fairy service to drive the mass business.

Now not to give Singapore a short shrift, because of the dramatic care announcement of the Macao government dominating the news. I want to say that our Singapore construction continues at pace despite challenging site conditions. Singapore set a new record for visitors in March with 908,000 with the average length of stay of 3.7 days representing 3.4 million visitors night in March alone. 98,000 of those visitors were from mainland China, second only to Indonesia's 155,000.

Average daily rate was up 23% year-over-year to over $160, occupancy was 87% of Singapore nearly 40,000 rooms and service departments. We continue to believe, we have a tremendous opportunity in Singapore and we continue to execute there. So that includes the highlights. But before we go to Q&A, I'll make a few concluding thoughts.

First, in Las Vegas, The Venetian's performing well in a weaker Las Vegas market overall, and the Palazzo continues to ramp up to full power. On the Macao Peninsula, the Sands includes or continues to be the resilient market leader of mass gaming volumes on the Peninsula, despite the very large increase of high quality competitive capacity, both compared to the same quarter last year and sequentially. We'll continue to work to capture more VIP play and additional operating efficiencies and focus on maximizing the Sand's market leading cash-on-cash-returns.

Finally on the Coati Strips, we'll rationalize more efficient operations of the various profit centers at The Venetian Macao, rooms, retail, entertainment, events, conventions, trade shows, VIP table business, mass table business, and slot. And capture synergies among them, as we continue to grow our revenues. We'll also complete the four seasons this summer, and continue to construct other operating or the reigning properties on the Coati Strip. By the end of 2009, there will be nearly 15,000 international standard rooms on Coati, more than four times as many as the Macao Peninsula has today.

For the bulk of the Peninsula investment now in place, the focus of future development will be on Coati. Those factors together with the strong market growth and with supply being backstop by government degree, combined with expanded infrastructure improvements, including additional ferry service, made a pretty compelling pictures for the future of our, Coati investments. We remain confident, that the execution of our plans will lead to superior returns for our shareholders, as we focus more particularly on the near term, and executing on our operations that are currently in place.

With that, I will open the lines for your questions and answers now.

Question-and-Answer Session

Operator

(Operator Instructions)

Dan Briggs

Operator, can we go to questions now.

Operator

(Operator Instructions) Your first question comes from the line of Larry Klatzkin from Jefferies. Please proceed.

Bill Weidner

Hello, Klatzin.

Larry Klatzkin - Jefferies

I don't know. And now we can hear the music there. One thing I noticed the walk at the Sand Macao was bad, what would you guys says how fair the walk was?

Bill Weidner

Thanks.

Larry Klatzkin - Jefferies

Can you guys hear me?

Operator

Larry your line is open.

Larry Klatzkin - Jefferies

I'm talking. Okay, better. Can you guys hear me?

Bill Weidner

Operator, maybe we can go the next question.

Operator

Okay.

Larry Klatzkin - Jefferies

Hello.

Dan Briggs

We're talking to, Larry.

Larry Klatzkin - Jefferies

Could you hear me? Can you guys hear me?

Dan Briggs

We'll call back to you.

Operator

Your next question comes from the line of Felicia Hendrix from Lehman Brothers. Please proceed.

Felicia Hendrix -Lehman Brothers

Hi guys. Can you hear me, hello, hello operator?

Bill Weidner

I guess everybody is shy.

Felicia Hendrix -Lehman Brothers

No, hello, operator.

Dan Briggs

This company is (inaudible) our entire conference call.

Bill Weidner

Yes.

Operator

Your next question comes from the line of Joe Hardik from Wachovia Securities. Please proceed.

Bill Weidner

Operator, it's not working.

Dan Briggs

Operator, we can't hear any of their questions. Hello, Operator.

Operator

Joe, you are in the conference, you may proceed with your question please.

Bill Weidner

Operator, can you hear me?

Operator

Yes. I can hear you, sir.

Bill Weidner

We cannot hear their questions. Can you hear their questions?

Operator

I have, Joe in the queue. Joe, if you can hear us, you can go ahead and speak. Your line is open.

Bill Weidner

Operator, it doesn't work.

Operator

One moment, sir, please. Ladies and gentlemen, please standby for one moment.

Operator

Joe, if you are in the queue, you may go ahead with your question.

Operator

Felicia?

Felicia Hendrix - Lehman Brothers

Yes.

Operator

Your line is also open. You may go ahead with your question please.

Bill Weidner

Felicia.

Felicia Hendrix - Lehman Brothers

Hi.

Bill Weidner

Hello there, finally.

Felicia Hendrix - Lehman Brothers

Okay.

Bill Weidner

Did Felicia beat out, Larry.

Felicia Hendrix - Lehman Brothers

Well in deference to Larry, operator, should put, Larry in next. This has been fun, so its fun every quarter with you guys. Okay. You mentioned that you were going to explore or starting to grants credit. I was wondering, if you sort through, I'm sure you're thought it through. But if you want to share with us perhaps what percentage of your overall business you might carve out to the overall VIP business, you might want to carve out to grant credit to?

Bill Weidner

We're just talking about that with Brad want me to go back. Can you hear the question so far?

Brad Stone

Yeah, I heard it. I think Felecia it's not a matter of a percentage, it's a matter of decision to make sense. I think we'd be challenging our people over here, certainly we have a strong base of Asian business that we've granted to in our Las Vegas operation. We’ve established certain credit lines, we are going to review those lines and I think it's really a balance we were on a call the other day. We were talking about our provision for bad debts, is basically non-existent here in Macao. And it's almost like a bank that doesn't have a few bad loans they are probably out lending enough money.

So, we are going to go through that, I mean as Bill said we are going to be cautious about it. We have expanded credit to our junket reps and as we've talked in the past we have done somewhat collateralized by the commissions we owe them. We are going to look at that as well and probably extend more credits to the junket reps themselves those who have performed well.

So we don't have a target, the target is to issue as much quality credit as we can to attract particularly the premium customer directly to our property and certainly continue to support the junket reps in their endeavors as well. So to say we have percentages is probably not, we haven’t established that, but we are going to look at those barriers that we've had in terms of extending credit here.

Felicia Hendrix - Lehman Brothers

Okay and then on the same line of addressing your VIP share, we've heard and you've implied in the past that the Four Seasons could be an all VIP property. I was wondering if you wanted to address that and then I had some follow-on's?

Brad Stone

I guess you know it's interesting we are finding that we are going to have two different types of experience for the VIP customer here in the Macao very shortly; one is the big property Venetian experience which includes obviously showing Dion shows, lots of restaurant, shopping and entertainment options, a lot of variety of room product. We're also finding a desire on the VIP market for a smaller and more boutique hotel experience and certainly The Venetian, The Palazzo and Four Seasons allows that opportunity for us. There is and the plans for the property are that we will have a ground floor for premium player area, which is designated for customers directly marketed by Las Vegas Sands and Venetian Macao limited here.

We will end up more than likely with two floors of junket rooms above those, because we are seeing a real desire by our junket reps to have a presence at the Four Seasons itself. And then later on, at the end of this year we are opening 19 really luxurious apartments with their own casino. Each suite actually has their own casino gaming room, as well as restaurant kind of reminiscent of what you would see in London, in terms of the type of experience and similar way to what The Mansion provided in Las Vegas for its customers.

So, there is certainly going to be an emphasis on product and we're hearing from the market itself that there is a strong desire for a Four Season's type of product to round out our initial offerings here in at the Cotai Strip.

Felicia Hendrix - Lehman Brothers

And is that still on schedule to open in June?

Brad Stone

We're looking at a July opening right now, Felicia.

Felicia Hendrix - Lehman Brothers

Okay.

Brad Stone

Sometime in the third quarter, I guess, the key there is the shops are progressing well at the Four Seasons. The property is a gorgeous property. We want to make sure that this property is opened properly and as a Four Seasons would be and so we're focusing on an early third quarter opening.

Felicia Hendrix - Lehman Brothers

Okay and then just finally. I'm just moving to Las Vegas during the quarter, as you were having meetings, you kind of mentioned that the overall property now with the increase of 70% in terms of room base, conference bookings at the time your talking about were only up about 25% to 27%. I was wondering if you could tell us in the quarter how that was and then just looking forward how your conference and convention business is looking?

Brad Stone

Okay, I am not sure I quite urged that. What we've done actually at The Venetian and The Palazzo is the group bookings are really a combination of both properties really don't say group bookings at The Palazzo versus The Venetian, it's a total. We have done recently because of the better known name of The Venetian as we launched The Palazzo product. As we have moved significant number of group room nights that we originally booked let's say in The Venetian product over to The Palazzo and back filled The Venetian with FIT business because quite frankly we get a higher call volume per room on The Venetian, because it's a well established product and that's kind of a short-term strategy. Certainly we're aggressively out there in a more than competitive environment right now economically, aggressively booking the group business and we may have some statistics there I don’t happen to have them here in Macao.

Rob Goldstein

Brad, let's just explain the April numbers perhaps give the indication we're going. April both slots of The Venetian are above 95% and an ADR excess 245. So booking are trending upward slots are filling up. As the property ramps up, I think we get stronger. Obviously as Brad alluded to the economic conditions in Las Vegas have been difficult in first quarter, but they are improving and as always the first segment to improve and to grow is the group segment, which is our strength and we'll keep playing with that strength.

Sheldon Adelson

Rob, this is Sheldon.

Rob Goldstein

Hi, Sheldon.

Sheldon Adelson

I talked to our VP of sales just before the call when he said that. We are up 110,000 rooms in forward bookings for the seven month balance of the year, a bit to last year.

Rob Goldstein

Yes.

Felicia Hendrix - Lehman Brothers

That answers my question. Thank you.

Operator

Your next question comes from the line of Larry Klatzkin from Jeffries. Sir, you may proceed.

Larry Klatzkin - Jefferies

All right, call's better. Couple of questions. One, just a quick housekeeping, it looks like you had some bad [rock] at Sands Macao. Could you guys quantify what that cost you?

Scott Henry

Are you talking about the normalization, Larry?

Larry Klatzkin - Jefferies

Yeah.

Scott Henry

Yeah. At the Sands Macao, it's a little bit more complicated to calculate that now because of the two different programs we operate at the VIP level. But if you go back and look at the way we do, we do it where we hold win constant, then we also do it where we hold the ruling volume pass it and the mid-point of that range is probably around $7 million or $8 million of the Sands.

Larry Klatzkin - Jefferies

All right. Second thing is I know everybody is running this you guys may not give it. But could you give a breakout of net revenues and EBITDA for the Palazzo?

Scott Henry

We can talk EBITDA, I mean, I think I don't...

Larry Klatzkin - Jefferies

EBITDA will be good.

Bob Rozek

Just under $20 million Larry, for the quarter.

Larry Klatzkin - Jefferies

Okay, okay.

Scott Henry

Keep in mind, we opened on January 17, with 44,000 that's off the books and obviously it was a work in progress.

Larry Klatzkin - Jefferies

All right, that's fair. As far as timing of the future projects and the budgets for everything, perhaps can do usually go through that or is that possible?

Brad Stone

Yes, no, I can take you through I mean we've mentioned the Four Seasons property opening early in the third quarter. The budget on that is intact, as we discussed on the investors day. Sites five and six, continue to move towards their spring of the first phase of spring of '09 opening for the Shangri La traders and first Sheridan Tower and again with the second Sheridan Tower and the St. Regis, and St. Regis, apartment is opening towards the end of the year. Again that project is roughly in the same budgetary state. It's seems to be tracking on very well.

Sites 7A and site 3, as Bill mentioned in the conference call. We are ready to start work on site 7and 8. We have the rigs there. We have just been frustrated because of the some challenges within the government, based upon the scandal that happened here in an area that related to the Public Works Department. And there has definitely been a slowing in the pace throughout Macao of approvals. And so we're anxiously waiting to get through that.

And again that's a project whose budget is still work in progress, as we go through, and really take the conceptual design and work on pricing it. So we really don't have any reports specifically on that project. And on site three, it's very similar site three is somewhat behind seven and eight. And we have filings in for all this projects with the government and again we are just waiting for the government to write itself in such a way that we can get a more normal development cycle.

In Singapore, that project is progressing very well. I was there about a week an half ago, and spend some time on the site. If you look at pictures of it, yet one has to realize that there was actually several floors underground. We are coming out of the ground with the towers now. We have a very aggressive goal of the end of next year in the fourth quarter of '09. We are working basically 24x7 on that project, where we're allowed with the government. And I mean that's just a fantastic project. We're still in the range that, we've been talking about in the $4.5 billion, $4.6 billion range, including land and all end costs on that project.

Bethlehem is progressing nicely. Steel is being erected very aggressively, now. Our goal is to get that open by the third quarter of next year. And again that project is consistent budgetary with what we expressed in the investor conference Day, back in February. I think that's the main projects that we've discussed. Though the Condo tower is also moving along nicely and again that's currently on the same budget we discussed at the investor day.

Larry Klatzkin - Jefferies

Okay. So everything is now third quarter '09?

Sheldon Adelson

Yeah.

Larry Klatzkin - Jefferies

Okay. And then, the next question, we wanted to talk in Condos, Four Seasons unit sales, when do we start to see those?

Sheldon Adelson

It's a complicated process here, and we've met some resistance shall we say, in Macao, in terms of the sale of the units. I don't want to get into too many details here at this point. We have plans to move forward. I think the primary issue we are having there in Macao is, having those that have invested interest in real estate to understand, we're not selling residences here. We're selling, what we call vacation suites. We don't want to just sell real estate and pick up dollars, although that's a nice thing to do.

We want to sell reasons for people to visit. We want our cake and eat it too. We want people to pay us a lot of money for these residences that they use when they come to visit. We don't want a residential tower. We want units that wealthy people buy, so they have their own place on the Coati Strip, similar to the market that we're focusing on here in Las Vegas. We want that tower not to be quote unquote residences per say. We want them to be residences for wealthy people that want their own place on the Strip.

So they pay us, and they make an investment, and they expect to make money on that investment, when and if they decide to sell it. But in the mean time they come and visit three times a year, eight times a year, seven times a year or whatever number of times a year to have their own residents on the strip. It's exactly the same intentions in Macao, it is that the local market guys who sell real estate don’t get. So we're working our way through and we are comfortable we will find a resolution.

Larry Klatzkin - Jefferies

All right last question would be how is the mall going in Macao would kind of average retail rate you are seeing and how far you long in renting a step out?

Sheldon Adelson

Larry, can you hear me.

Larry Klatzkin - Jefferies

Yes, I can hear you.

Sheldon Adelson

Yeah, this is Sheldon. Latest time I talked with our President of Asia over there, I talked to him last night out there and I'm on the East Coast right now, until tomorrow. And I am told that there was a separate committee that was formed by the Macao government and the committee decided, there is no guarantees on this, but it appears as though they wanted to take a different approach and called it something else other than residential. But they concluded the only approach they can that everybody can be happy with is a co-op approach, like the New York where people buy in to the shares of company with a right to use a particular apartment. So, without any guarantees it sounds more encouraging that we will be allowed if it goes through in the near future to move the property in to a separate condo regime and be able to sell co-op interests.

Larry Klatzkin - Jefferies

You still think 2000 a foot makes sense?

Sheldon Adelson

We have no reason to believe that what we estimated in the past should be changed at this time. We stop taking orders at 100, stopped taking -- we didn't take orders, we took indications of interest. Sometime ago when we know it wasn’t, that we don’t want to get the interest to get stale, so we stop taking expressions or interest and I think we are going to startup again very soon.

Larry Klatzkin - Jefferies

Okay, great thanks Sheldon

Sheldon Adelson

Well hold a minute. Listen, one is our hope and the other is realism and in this case they could coincide.

Larry Klatzkin - Jefferies

Okay, well good luck with that and then on the retail what are we seeing on average rate and everything?

Bill Weidner

The rates that we've been talking that historically haven't changed with respect to minimum ramps. You noticed that we put for the first time in bill script that revenue or retail sales themselves are running north of 700 a foot on an average basis. Obviously you've got some high end retailers that are doing far, far in excess of that and then you've got, people in the pieces of the mall will benefit from more traffic that are doing south of that number. But we are pleased with the progress there.

Scott Henry

That's I am finding F&B.

Larry Klatzkin - Jefferies

Okay, which is much slower and then…

Sheldon Adelson

Which is much slow. I think in the future I would like to separate the F&B sales from the pure retail sales.

Larry Klatzkin - Jefferies

Well, thanks guys and Sheldon again with your change proposed changes in laws in Macao. How do you see the re-division of slots and tables, any comment on that?

Sheldon Adelson

It's too early to make any predictions. If you ask me what I'm wishing for when I fantasize like there we do solve the casinos back to eight or 10 and give it of all the VIP rooms that are operated independently. My fantasy is such, I mean when we first got involve in Macao. We were assured that it would take a couple of years to phase out the VIP rooms. That hasn't happened and they were a lot more independent casino's to open. And I think the announcement by Edmund Ho last week was a reaction to pressure he has gotten from both us and hopefully we don’t know for sure, because we are not that convinced about that kind of pressure.

From the CLO, the Chinese Liaison Office, that the way the development was going was not what they originally intended for it to be. So, we are hoping that our goal is to turn a city of CD backwater gambling dens into a city of convention, business travel, and business and leisure travel, where the casino represent no more than 10% of the total amount of space. So, that I mean right now the biggest casino in the world that we have at The Venetian is only 5% of the total amount of space.

So, I think we are getting a good, we are speaking to welcome ears. When we say that you have-to-have a -- we are suggesting you are going to have a certain percentage, certain ratio of exhibition space, convention center space, shopping space, et cetera, et cetera. And if you don't have that we are suggesting that the proportion of casino occupancy be reduced. So, it's too early Larry to tell what they are going to do and how fast they are going to do it, but it’s certainly a very good first step.

Larry Klatzkin - Jefferies

All right. Thanks guys.

Sheldon Adelson

Okay Larry.

Operator

The next question comes from the line of [Dustin Sevnti from Standard Pacific]. Please proceed.

Dustin Sevnti - Standard Pacific

Can you hear me?

Bill Weidner

Dustin, was that you?

Dan Briggs

Next guy.

Operator

The next question comes from the line of Steve Kent from Goldman Sachs. Please proceed.

Steve Kent - Goldman Sachs

I will try. Can you just give us some comments on progress on financing for the Macao development. And also Brad you talked about some of the expenses specifically headcount, managing that in Macao. Can you talk about the relationship between keeping expenses in line versus just boosting more mass market revenue and where you're focusing? And in Vegas what can you do to reduce expenses on a go forward basis given the economic environment?

Scott Henry

You want me to go first Brad.

Brad Stone

Go ahead, I'm sorry.

Scott Henry

Right, on the financing front from Macao I think the message, Steve is the same that we delivered during our investor day is that, we intend to finance our needs for the Macao properties that are under construction and to be developed in an offshore transaction predominantly anchored by Asian banks, and other global banks that have a large operation and lending capacity in Asia, similar to what we did in Singapore.

I've been having very active conversations with a number of our bigger banks, and even some of our medium and smaller sized banks and the level of interest, and level of enthusiasm there is actually quite good. Hopefully by the next quarter conference call, we'll be able to have more indicative direction in terms of the size to what that financing might be and what it may cost us.

Steven Kent - Goldman Sachs

Okay.

Brad Stone

I'll go on now. As far as our opportunities in Macao, Steve, labor is certainly an opportunity for us. We want to take advantage of the opening in the Four Seasons to readjust our labor counts here at The Venetian Macao, and move people that have experience over there without disrupting the labor market here. We are very sensitive about that. And certainly the Four Seasons provides an opportunity to get ourselves more efficient here, and we will do that. There are other opportunities here in Macao, energy as a huge cost we are looking and focusing on areas like that.

But the reality is I mean you're never going to save is way to success here in Macao. And our goal has to be the drive to correct our market share at The Venetian Macao on the VIP business. I think you'll see our efforts really start hopefully becoming evidence this month as discussions with junket reps and etcetera, do take, they can't move immediately. So month end is a time where people can shift some of that business. So we're hoping to see some of our more competitive moves on the VIP market start reflecting, truly in the month of May.

And on the mass side, I mean, the good news is, we have tremendous amount of business here at the property. But it is the serving win. If you look at the fact that we have 2.5 times the size of the amount of visitation here at The Venetian than we do at our sister property at The Sands. And yet we're generating only about 15% more in mass line. So what are our goals there have to be to convert a lot of that traffic. Certainly, as Bill pointed out, we have significant upside in the ferry business, in terms of bringing people directly here.

So our goals have to be twofold, one, translate more the visitation in the gaming win, drive more visitation to the gaming for itself, and adjusting our VIP commissions. So we drive both more revenue and more EBITDAR or cash flow out of that market. At the same time really addressing as we understand our business better now, and as we have opportunities like the Four Seasons to correct some of our structural issues as far as staffing and we'll do that. And I think you'll start seeing those translations later in this quarter, and going particularly into the third quarter.

As far The Venetian Palazzo, I mean, I think we've always done a pretty good job there on managing costs. We told investors that we believe the synergies between the Palazzo and The Venetian would generate in the area of about $60 million of efficiencies compared to, if they are two separately operated entities. Our initial analysis of that shows that we're meeting that goal, so I think that as base restructure that we set up in terms of the overhead at The Venetian Palazzo in Las Vegas, will work.

And as Rob said, as a property matures, and we get the product in place, we see an increase in occupancy and rate, as we've seen as Rob pointed out in April. I think we'll see the revenues dry, the majority of the EBITDA growth and that the cost structure is in fairly good shape. Of course, like any new property we'll learn more and we'll make adjustments accordingly. And so I usually don't make adjustments in the market like Las Vegas than it is necessary over here.

Steven Kent - Goldman Sachs

Okay, thanks.

Operator

Your next question comes from the line of David [Faber] from Credit Suisse, please proceed.

David Faber - Credit Suisse

Questions have been answered; all my questions have been answered, thanks.

Dan Briggs

Thank you

Operator

Your next question comes from the line of Joe [Carillon]. Sir, you may proceed.

Joe Carillon

Majority of the EBITDA growth and that the cost structure is in fairly good shape, of course, like any new property...

Operator

Your next question comes from the line of Robin Foley from UBS. Please proceed.

Robin Foley - UBS

Great, thanks. I've got two questions, the first is, you talked about focusing more in the profitability of your existing facilities and the timeline you gave for additional co-type property, sounds like it's unchanged. But its there, when you talked about focusing on existing facilities in the near term, is there some thought to filling the openings of additional capacity at this point?

Bill Weidner

No I think as I mentioned in the script now that the intention is to continue to aggressively develop those property's now as quickly as we can. But we need to make sure that we turn our efforts in the near term to make sure that between now and significant completions in 2009 that we generate as much income in the near term as we can.

So, we have an opportunity with the Four Seasons coming along and as I say Brad is there in Macao now as we begin to more rationalize the cost structures there and then as we ramp up The Palazzo. I think it's more a matter of controlling the cost as that comes online. So we can deliver more EBITDA. So that's just, that's all I was saying. So, we are not loosing focus of the near term for the construction process for the long-term.

Robin Foley - UBS

Okay now that's great thanks. And then also I wonder if you can you give a little more color. You talked about, that you've taken actions in the market in Macao and then at the end of the month here you may start to see the impact to some of that. I wonder if you could give us a little more color on, it sounds like the market is moving towards 45% of revenues as payments to junkets, but in some cases we are hearing its above that we are hearing its 48% of revenue in some cases.

I wonder if you could talk about kind of what level you are now and then also do you expect to announce anything. As you are taking different actions in Macao, do you expect to announce anything with the large aggregator or is that something that you would do just without announcing it. If you can give us a little more color on those lines?

Bill Weidner

Probably we're not going to broadcast what we are going to do on a conference call. So I think that's fairly short. I just said we are going to act and react to market as we see fit and appropriate.

Sheldon Adelson

I would just like to mention that, don't disregard the possibility of these commission rates eventually going down as the supply of gaining capacity decreases. If it does contract as the government has indicated to kind of consider. If it does contract, it will take the leverage away from the guys who are demanding greater commissions and hopefully and just the increase in demand and reduction of supply will create a different (inaudible).

Robin Foley - UBS

Okay. And so in terms of it sounds like you don't want to give specifics about what you may do, but one of your competitors for example has said on one of their conference calls that they will be announcing something in the next few weeks with a large aggregator. Is that -- obviously not asking the specifics of that, but is that the kind of thing that we might see you announce as well?

Sheldon Adelson

Like Bill said I think we would rather not get into that right now and signal to our competitors, what we are going to do we will not do.

Robin Foley - UBS

Okay. Great, thank you.

Operator

Your next question comes from the line of Joe Greff from Bear Stearns. Please proceed.

Joe Greff - Bear Stearns

I was hoping just on the lines of the commission structures or the commission rates. What was the average VIP commission rate of Venetian Macao in 1Q and can you remind us what it was in the fourth quarter?

Brad Stone

EVP Yes, I will give you that information. Give me just a split second here I have it. The commission rate was, for the first quarter was I believe 1.13%. One moment here, Joe. unless somebody else has it there right now.

Sheldon Adelson

Yes, I am looking for as well Brad.

Brad Stone

Commission was 1.13% and that compares to the prior quarter. I believe about 1%, Joe.

Joe Greff - Bear Stearns

1% okay. And maybe looking at it differently can you comment on margins on VIP gaming revenues? What they are in absolute basis, maybe because of that in the first quarter relative to the fourth quarter. Do we see those sequentially go down at Venetian Macao?

Brad Stone

Well again I don’t have the breakout directly of all the based upon, I don’t think, we want to get in to that I would say that obviously as commissions goes up the profit margin are going down, our goal is to drive enough volume as we -- and being competitive we are kind of cordless switches, rates went up, they didn’t go up enough, so we encouraged some expenses, additional expenses but we didn’t drive enough volume through the door, that won’t happen again.

Joe Greff - Bear Stearns

Okay, and back to Las Vegas, the EBITDA impact from the average or the above average table, whole percentage I guess somewhere between $9 million and $10 million is that math right?

Brad Stone

Yes.

Joe Greff - Bear Stearns

Okay.

Brad Stone

I've got just one interesting point I think, you have to understand about the first quarter is an unusual quarter in the sense that it so dominated by Chinese New Year that its almost like there should almost be a separate whole percentage for the first quarter for Las Vegas. Traditionally we hold significantly higher than our normalized rate in that quarter. Last, I mean we are actually lower than last year.

Joe Greff - Bear Stearns

All right. And then I have a comment for Scott in relations with his prior comments on the financing. If you look at you CapEx on the Cotai Strip, what is left to spend assuming for the remainder of the development pipeline and then what do you have existing right now in terms of your existing available cash existing [math] under your facilities over there?

Scott Henry

I think Joe as far as required funding necessary to completion a portion of that is expected to be generated by a combination of cash flow, that comes from operations, as well as from the sale of residences, is what we're forecasting internally. I don't think we shared that was internal estimates, because we don't want to give forward forecast for those properties.

The balance that we're talking about and focusing on to take us out to completion of all of our funding requirements goes out through 2011. And actually, some of the costs even leak into 2012, because of the way construction contracts and contractor, or payment schemes are practiced in that part of the world. It is several billion dollars I think what we indicated during on investor day. As we require approximately an incremental $4 billion, to get us to what we believe is completion and a fully funded program over in Macao.

Joe Greff - Bear Stearns

And that's $4 billion is inclusive or after the benefit of the sale of residential stuff, right?

Scott Henry

Yes. That is correct.

Joe Greff - Bear Stearns

Okay

Scott Henry

Can you remind me the other part of your question?

Joe Greff - Bear Stearns

I think you completely answered Scott. It's just sort of wanted an internal...

Scott Henry

Internal facility, under our testing facilities is that was the other piece of your question. We're almost fully drawn on our facilities over in Macao. And I think that's we had indicated that the investor day that we will require incremental funding, but before the end of this year.

Joe Greff - Bear Stearns

Okay. And then one final question and I'll let someone ask some additional questions. Just along the line of internal forecast, obviously in the press, with regard to, the losses out there, there was just idea that internally there is a document that you lowered internal forecast for 2008 and I'll leave it as broad as that, but do you want to comment on that?

Scott Henry

That was mostly including first quarter or this quarter results. That was a revenue number and relating to internal forecast that, mostly included updates based on this quarter. So it's in the number, backed in the numbers.

Joe Greff - Bear Stearns

Good enough. Great, thanks guys.

Bill Weidner

Excuse me I'd like to add to that.

Scott Henry

Yes.

Bill Weidner

Okay. Now, I just want to say that was before we heard the announcement from Macao.

Operator

Your next question comes from the line of Celeste Brown from Morgan Stanley. Please proceed.

Celeste Brown - Morgan Stanley

Hello. Do you have a good sense for why, the non-gaming was down sequentially in Macao, is there a seasonality or is it, it'll be initial surge of people and it died off a little bit, surprised to see it with Chinese New Year?

Scott Henry

You're talking about the actual hotel primarily, Celeste?

Celeste Brown - Morgan Stanley

Well it was hotel, retail, food and beverage.

Scott Henry

I think, as good as Chinese New Year is to the gaming side, it does affect us and I think Bill made or somebody made a comment about seasonality. And you don't book a lot of group business before or after Chinese New Year. And so that's we ended up going little bit more in this particular quarter into our wholesale business, and other segments, and that's affected rate and affected to some degree the occupancy. So the time before Chinese New Year is very slow here, and is really not group business you can fill in typically. So you don't have FIT, you don't have group sale, relying wholesale. So, I think somewhat that is seasonality regarding first quarter.

Celeste Brown - Morgan Stanley

And then, are you see an impact on the business in Macao. I'll just switch the shortened Golden Week this year or is hat better for you I guess from a non-gaming perspective per what you just said with Golden Week?

Scott Henry

I think the Golden Week this year is weaker than last year. So there is not question about it. And even though Golden Week is no longer seven days, there is still a couple of days in there where they do celebrate it. So it's kind of a double whammy. It's not as strong as it was last year or as far as the number of days and they still don't book group business around Golden Week itself.

So it's a one or two day holiday that they stay away from group business, as oppose to a seven day holiday. So yes, it affected us, although we see more demand on the shoulders of it on weekends and things like that. So I think you'll have an increase in shorter term vacations as it were, as opposed to the seven to ten of Golden Week.

Celeste Brown - Morgan Stanley

Okay. And then without saying what your expectation was or is. Do you think it's still possible for you to reach what you are expecting at The Venetian by the fourth quarter of this year, with all of the challenges you face and with some other changes do you see coming in the market?

Scott Henry

Certainly on a run rate basis, yes.

Celeste Brown - Morgan Stanley

Thank you.

Operator

Your next question comes from the line of Robert Armstrong from [Simocos] Capital.

Robert Armstrong - Simocos Capital

Gentlemen, can you hear me?

Scott Henry

Yes, they will switch it.

Robert Armstrong - Simocos Capital

Just to continue the conversation of financing. How committed are you to getting the $4 million incremental you're going to need in Macao through banks, is equity an option or there are other options out there? Just on the assumption that the credit market might be turbulent over the upcoming months?

Scott Henry

We're evaluating a number of different alternatives equity is not one of those.

Robert Armstrong - Simocos Capital

Okay.

Scott Henry

We believe that we have ample access to the credit markets, and our primary focus is on the bank markets and we are in reasonably advanced conversations with folks. So our level of confidence around the bank capacity and interest in that part of the world is high and especially for our brand and our projects.

Robert Armstrong - Simocos Capital

Okay. And the rates you are discussing are within the range of what your previous expectations might have been?

Brad Stone

Yes.

Robert Armstrong - Simocos Capital

Okay. Thanks very much.

Brad Stone

Welcome.

Operator

Your next question comes from the line of [John Chen from Oak Creek]. Please proceed.

John Chen - Oak Creek

Yeah, you guys mentioned the commission rates in the first quarter. Is it safe to assume that at quarter end they are higher than the 1.13% that you've quoted in the quarter?

Bill Weidner

Yes.

John Chen - Oak Creek

And when you talk about I think doing more to reverse decline in VIPs is one of the levers to pull commission rates, because I am just trying to understand what other levers there are besides just paying more to the junket operators?

Brad Stone

Well, I mean certainly the driving factors what we pay these guys to bring business in as we've mentioned I think credit is going to certain junket reps not to. It's something that helps drive and helps them with their business. So I think those people we feel comfortable with and to who it’s a meaningful asset to help them along to bring business to our property, we look at that and certainly there is operational issues and then how we run our place and how we completely the experience. So I would certainly rank being competitive in the commissions as number one and we have to be competitive. We've tried in the past to remain below the given rate and we're just finding that in this current environment we're going to be aggressive.

John Chen - Oak Creek

Okay, great thanks guys.

Bill Weidner

Thank you.

Operator

Your next question comes from the line of [Kevin Mod from OD]. Please proceed.

Kevin Mod - OD

Hi yes, good afternoon gentlemen. I have two questions please. My first goes back to the comments and the statements made by the Macao government. Because I believe there was a separate statement that seemed to suggest that they were trying to constrain the number of tables and slots that they were going to give going forward, do you view that as a set per [limitations] so the limit of 40 casinos. Does it change perhaps your plans for the make up of your remaining sites there sites 539?

Bill Weidner

No I think the bottom line is that they will control the slots and tables of the current operations that are there now. While they then review for example, the service agreements that have essentially setup sub-licenses that are not controlled or that are not fractionalized, shall we say? They are not suggesting that on a going forward basis that those individual places don't have an appropriate mix of tables and slots that go with them.

No one is going to spend billions of dollars without additional capacity in more destination type places. I think if you read between the lines what you see is I think as Sheldon suggested they're saying, they don't necessarily like the old Macao style proliferation of the casinos that don't drive visitation further away. Those that are what would you call cannibalistic or call it leeches from those casinos that drive first class visitation from around the region, I believe, are going to be controlled and frowned upon.

The future of Macao are destination styles casinos like exist on the Las Vegas Strip, that's why when Francis Tam talks about additional casinos, if there are 29 now. And you do the math that's 1 more casino on the Peninsula, and 10 casinos on the Cotai Strip. So the kinds of casinos that are more like what are on the Las Vegas Strip.

So I think it confirms the vision of government that, in the future they are going encourage destination style, multi-day stay, places that drive visitation for further away. I think that's what to read between those lines. And I am not going to discourage additional capacity for the billions that spent in those styles of casinos.

Kevin Mod - OD

Okay. And my second question is, with regards to infrastructure. You've obviously identified that, you need that ferry to drive mass volumes in The Venetian. But as I look at your pipeline over the next three plus years, you're trying to more than double almost triple your footprints again.

And my question is, what additional infrastructure commitments do you need because what I am worried about is there's obviously a differential between when you build and when the infrastructure follows that allows you to fill that build, is that an issue for you?

Scott Henry

Look the key thing about ferries is the scalability of ferries. This temporary facility that's on the pack on, that's at the foot of the Cotai Strip. If you understand the geography, that's a three minute ride, directly down the four lane highway to the Cotai Strip. We've relative to Peninsula, Macao the streets are narrow, you can't change it, it is what it is.

And I think government is recognizing by saying additional developments in Peninsula, Macao are not going to take place because it's just too crowded, how do you move around, how do you get around. The beauty of the Cotai Strip and that ferry terminal at the foot of the Cotai Strip is as the new ferry terminal comes online, more and more capacity comes online. Now, as you look down the pipe, about the additional capacity on Cotai Strip, ferries our simply a process of ordering them long enough in advance to be able to then deliver them and then those of the -- say, are ultimately scalable. And then you can center the different destinations, you can have higher frequency of service, etc cetera.

That's why we keep dwelling on an idea of ferries. But this current ability to connect to Hong Kong is just the beginning, there are many more places Shenzhen, others up are Pearl River Delta, the airport at Zhuhai, which is currently underutilized, connections to the airport in Hong Kong, expansion of the Hong Kong. There are the airport right there, again, in Macao because that airport is like a minute and a half from all of the hotel rooms, and the new hotel rooms on the Cotai Strip.

So the scalability of the ferry operations is what we are saying improved, but additional space, I guess you would say, apron space at the airport that increases capacity there too. We're confident that with the right combination of scalable ferry service and the expansion of the opening of the new pack on ferry terminal, which were well before that all this new product comes online will make that transportation capability and the infrastructure there marry directly with the increasing capacity on the Cotai Strip.

Kevin Mod - OD

Okay. And then, just coming back to my first question, I understand what you are saying about them wishing to get to upscale and to improve the quality of Macao. I entirely understand that. But as I understand it, they are only giving permits to the new style of American quality casinos that is a shift from 29 to 40. So I wonder why are they making a separate statement about constraining the number of tables and slot machines? If there any given permits to American style quality casinos, you see my…

Scott Henry

I wouldn't necessarily say American style, I would say international style.

Kevin Mod - OD

Sorry. Okay, international. But these are real good projects?

Scott Henry

Yes.

Kevin Mod - OD

I wonder why he has to specifically make a comment about constraining tables and slots, when you are the only people allowed to build new capacity?

Scott Henry

Because look what's happen, the smaller old style Macao casinos, quite frankly, sap the power required to drive the investments. So that's if you read between those lines, those that have been granted to the older style, less attractive, more regionally focused places are -- if the communications there are that there will be discouragement, that such a word of adding more capacity in current places.

Kevin Mod - OD

Okay.

Scott Henry

Capacities granted to the places that are more destinations style casinos.

Kevin Mod - OD

Okay. Thank you very much.

Scott Henry

Thank you.

Operator

At this time I would like to now turn the call back over to management for closing remarks.

Bill Weidner

Well, thank you very much, again, for listening in on our conference call today and participating in it. Again, I'll apologize for the technical difficulties at the beginning. We had a interesting quarter, shall we say and there are things happening in the marketplace of Macao that we are reacting to as we speak. We still are very bullish about the long-term direction for Macao about the encouraging comments by government in terms of the development of the more destination style casinos in the future.

We're very bullish about what's happening in our developments in Singapore and how Singapore is, in fact, coming along and daily we walk through the property here and look at the traffic accounts and watch what's happening with the ramp-up of Palazzo. We're very confident that the combination of Palazzo and Venetian here will continue, make this the destination place in Las Vegas overall.

So I appreciate your participation today. And we look forward to next quarters conference call and thanks again for your comments and your questions. And we look forward again to interfacing with you in the future.

Operator

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Have a wonderful day.

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Source: Las Vegas Sands Corp. Q1 2008 Earnings Call
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