Not the labor quotas. What we mean is Sands China finally GETS IT. The company’s parent, LVS, told the SEC in a filing this week that, “Until adequate labor quotas are received, the timing of the completion of phases I and II [of Lot 5&6] is currently not determinable with certainty.”

Eureka! In one fell swoop, the company has done two good things. It has finally started to publicly acknowledge that it is in Macau at the behest of, and the patience of, the Macau and China governments. So, if it is to ever complete the long-delayed project, it will do so in a time and manner at the government’s discretion. The second thing it has done is to finally come clean with investors and creditors about the seriousness of the issue. The old “don’t worry, things are fine” line has finally been discarded and replaced with a bit of brutal honesty.

To be sure, the honesty has been brutal. The company now says it will probably not be able to ramp up construction until the Galaxy Macau resort is open – so it can get all those local laborers. That pushes the opening timeline for Lot 5&6 well into 2012, in our view. And the company says that the entire project, all three phases of it, might not be open by the May 2014 deadline set in the land concession.

But it is better this way, and investors and creditors would be foolish not to see that. The Venetian and Plaza are more than capable of meeting demand on Cotai in the meantime. Another few thousand hotel rooms would be nice, but the gaming floor, where 90% of revenues come from, can handle the forecast growth in the next two to three years. And who is to say the 2,200 rooms opening next door will not serve almost as useful a purpose in bringing more overnighters to Cotai? By the time Lot 5&6 is ready to open, demand will be more pent-up and the revenues will pop more quickly than if it were to open earlier. We are much more comfortable with Ebitda forecasts of US$800m a year for that property in 2013 than in 2011.

More importantly, the chances of Venetian getting a quota for the 10,000 to 20,000 imported staff they will need to run that resort will be higher if they stop pushing so hard, and so publicly, for the construction quotas now. And uncertainty surrounding the table cap might have disappeared by then, too.

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