Las Vegas has benefited from a little known visa program known as EB-5. By being able to prove a foreign investor has a minimum of $500,000, with $1 million being the maximum, that particular investor received automatic U.S. residency. With the Chinese supplying the bulk of the capital, the program has allowed Las Vegas to prosper.
As part of the Immigration Act of 1990, the EB-5 program became Las Vegas’ new source of revenue when the recession began in 2008. Everyone involved benefited. Chinese investors with at least $500,000 in proven assets could apply for an EB-5 visa. Acceptance needed only one of two requirements satisfied. There had to be an American commercial establishment able to create at least ten jobs over the next two years. That project should be located in an area of high unemployment. Las Vegas qualified in both categories.
The federal cap on the number of EB-5 visas per year is 10,000. In 2006, only 502 EB-5 visas were issued by the Department of Homeland Security. That number jumped to over 8,000 in 2013 and is expected to continue growing until the yearly quota is met.
Companies seeking investors for Las Vegas found clients in China ready and more than willing to invest. The EB-5 visa program proved so popular with Sin City’s development that the Las Vegas Convention and Visitors Authority decided to open offices in Shanghai and Hong Kong.
The Sahara, former home of the Rat Pack, will soon become the SLS casino. Of the $415 million needed to construct the casino, a quarter of the funding came from Chinese investors. Panda! a stage production at the Palazzo has Chinese investors. The Downtown Grand, former home of Lady Luck, has received a $120 million renovation with Chinese funding. Lucky Dragon will soon stand in an area once occupied by the Sands Casino thanks to Chinese capital.
Zhao, a Chinese who invested into the Palazzo production of Panda! said Las Vegas is more than the gambling capital of the world. It is also a major exhibition and entertainment center, as well. More and more Chinese will continue to come to Las Vegas to invest.
David Jacoby, director of the Las Vegas Economic Impact Regional Center, said that as the Chinese middle class continues to grow, investors become savvy in transferring their money overseas. Las Vegas has become a destination spot to not only vacation, but for investments. Jacoby wants to use the EB-5 visa program to raise an additional $200 million in capital from foreign sources for local projects.
Chinese investors love Las Vegas and Sin City loves them back. With the influx of Chinese money into the city, the staff at Las Vegas hotels will go out of their way to ensure a room has the proper feng shui setting. There are special food menus and decorations for the Chinese New Year. Baccarat is the favorite game of chance among Chinese gamblers. In 2013, baccarat brought in $11.3 billion, a number that has boosted the Las Vegas gaming industry.
In 2012, Sin City welcomed 263,000 Chinese visitors, a 39 percent increase over 2011. Chinese tourists were 5.1 percent of Las Vegas’ international visitors in 2012.
Without foreign capital, projects both on and off the Strip would not take place. The 2008 recession hit Las Vegas hard leaving casinos, restaurants, and hotel rooms empty. The city endured a high unemployment rate of over 13 percent. Chinese money funds construction projects. Those projects employ construction workers. Once the project is complete, employees at hotels, casinos, and restaurants benefit from the influx of guests.
Shuyen Cheing, the CEO of Fortune Gaming, wanted to recruit private investments into a $300 million project called Dynasty, a resort located off the Strip. When he learned about the EB-5 visa program, Cheing made inquiries. He now has more than 300 people waiting to invest $500,000 each.
A warm climate for both vacationers and business development has paid off. Las Vegas has required time to recover from the 2008 recession and has done so with the help of EB-5 visa program that caters to Chinese investors.
By Brian T. Yates