-- and allow them to play baccarat during the 14 hour flights.
There's another awesome benefit for frequent fliers on the planes -- any casino win from the gamblers obtained by Las Vegas Sands on the flights would not be subject to Nevada's 6.75% rate on all gaming revenues, officials say.
Gambling activity on private aircraft is viewed as similar to gambling on a cruise ship. The casino can only be open while the craft is in international waters. Cruise ship gaming revenues are not subject to any gaming tax collection, according to several legal analyses.
According to Nevada Gaming Control Board Chairman Dennis Neilander, there are no requirements for Las Vegas Sands to report revenues earned from a foreign gaming operation, which is what the private airline wagering activity would fall under.
"It looks like the law doesn't address any gaming tax provisions," Neilander said. "There are some references for income tax, and any wins by a customer might have to be recognized for income tax matters. There may also be some corporate taxes involved."
The Sands officials told Nevada gaming regulators of its plans just a few weeks ago. Frederick Kraus, vice president and general counsel, said Las Vegas Sands would create a separate Nevada limited liability company that would lease the plane.
"We plan to offer patrons traveling to or from The Venetian from Hong Kong the opportunity to play table games only and on credit only with no cash play on an L-1011 outfitted with table games and a surveillance booth and digital surveillance equipment while the aircraft is in international air space over international waters," Kraus said.
The he company this week filed a Foreign Gaming Notification Statement with the control board, saying it planed to conduct foreign gaming in international waters over international airspace.
The concept was revealed Monday during the company's quarterly earnings conference call with analysts and investors. Deutsche Bank gaming analyst Bill Lerner asked company executives about buying two L-1011s and the strategy behind the planes.
Las Vegas Sands President Bill Weidner told analysts that the company wasn't required to comment on the planes. After a few moments, Weidner added, "They fly a long way. So we bring people along the way without stopping. People can smoke on them if it's done in private."
In the company's most recent quarterly earnings filing with the U.S. Securities and Exchange Commission on Nov. 11, Las Vegas Sands detailed an array of items concerning the private aircraft purchases.
The company said it entered into promissory notes totaling $72 million in February 2007 to finance the purchase of one airplane and to finance two others the company already owned. In April, Las Vegas Sands entered into promissory notes totaling $20.3 million to finance purchase.
Las Vegas Sands said it spent $89.9 million on capital improvement projects, which included corporate airplane-related purchases.
Gambling on commercial flights has been explored previously but never implemented. Around the same time, executives from MGM Mirage, which was then known as MGM Grand, discussed the idea. The company operated MGM Grand Airlines in the 1990s.
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Flying the friendly skies -- of Las Vegas Sands
By Gene Koprowski
One of Las Vegas's leading casino operators, The Sands, has procured two L-1011 airplanes and is retrofitting the passenger plan to serve as private jets that will chauffeur gamblers with large bankrolls to the company's two Strip resorts from Asia--
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