However, as far as US casino magnate Sheldon Adelson is concerned the country would be a perfect location to house a €16 billion ($21 billion) gambling resort capable of becoming the Las Vegas of Europe. Unfazed by the euro-zone turmoil, the Las Vegas Sands (LSV) CEO with a $24.9 billion fortune, explains:

“It will take us four to five years. By then everything will be solved.”

Sheldon believes Spain is ideally placed in terms of weather and location for the projest, being as it is just a five-hour flight from one billion people living in 50 nearby countries. Furthermore, the 78 year-old is confident 260,000 indirect and direct jobs will be created, thus assuring him the support of the Spanish government.

An additional sweetener for the Spanish government is that the world’s 4th most popular holiday destination with 57 million annual visitors, could see 11 million more annual tourists spending an extra €15.5 billion over 15 years.

So far, either Madrid or Barcelona are emerging as front runners for the development, which envisages 12 hotel strips, six casinos, three golf courses and several convention centres. However, Sheldon Adelson’s plan already faces resistance from opposition groups, not least “Eurovegas No,” with organizer Ana Sanz explaining:

“The numbers which they are selling us are not real. This is a repeat of a growth model based on excessive construction. It is not a source of sustainable jobs. We are going to become a nation of waiters and prostitutes.”

In the meantime, Las Vegas Sands is expected to announce in June or July whether the project dubbed “Eurovegas” will go ahead. Factors currently being discussed include legal and financial incentives, as well as a relaxation of Spain’s smoking ban in force since January 2011.

In 2011 Las Vegas attracted 38.9 million visitors, which was up 4.3% on 2010 and just short of its 2007 record of 39.2 million. Last year’s figure also saw a 3.4% increase in hotel occupancy, while gaming revenues rose 5.1% in 2011 to $6.068 billion including a 3.5% rise in slot revenue.

As gaming analyst Peggy Holloway explains in Monday’s report:

“After suffering through a deep trough during the recession when visitor volume declined as new capacity came online, the Las Vegas recovery is under way. Hotels are benefiting from increased visitor numbers that permit higher room rates, while gaming revenues are recovering, albeit more slowly.”

However, the recovery could be hampered by higher crude oil prices which are already at their highest level since 2008, with analysts predicting a further 30% spike if Iranian oil supplies are interrupted. This would inevitably affect the fragile global economy, while forcing up the travel cost to Las Vegas, frequency of visitors and discretionary spending.

Referring to companies such as MGM Resorts International and Caesars Entertainment Corp. which are heavily dependent on the Strip for their gaming revenues, Peggy Holloway commented:

“The pace of recovery will largely dictate the fortunes of companies that rely on this market for a material portion of their profits. These companies have a high mountain to climb to reach previous levels of absolute profits.”

Consequently, Moody’s report is not expecting the credit profiles of these companies to improve significantly for at least a few more years. However, when that does occur streaming measures already taken by the main hotels and casinos should see them well placed to take advantage of a recovering economy.