Many casinos are having a banner year so far, and are spreading their special brand of cheer far and wide. Major resort companies are unwrapping new, shiny casinos and promoting plans to build new ones in the Asian gambling destination of Macau faster than a croupier's deck shuffle.
One of those lucky casino operators is Wynn Resorts (NYSE: WYNN ) , which very recently got the green light from Macau officials to break ground on its newest development, a $3 billion gambling resort on 51 acres in Cotai. This has given others in the industry reason to hope, particularly since the Chinese-owned resort area had been reluctant to hand out approvals for new casinos for the past few years.
Cotai, the gaming capital of the world
Now that the floodgates are open, other operators are rushing to expand their holdings in Macau, particularly in Cotai. MGM Resorts (NYSE: MGM ) just recently announced its firm belief that the government there will approve its building plans as well, which sport a $2.5 billion price tag.
While both Wynn and MGM have casinos in Macau, Melco Crown Entertainment (NYSE: MPEL ) and Las Vegas Sands (NYSE: LVS ) have working casinos in Cotai, the bulked-up swampland that connects two islands off Macau. The Sands Cotai Central, which just debuted a few weeks ago, marks Las Vegas Sands' third casino in that area, while Melco, whose entire gaming focus is on Macau, is currently developing its Studio City Project, which is expected to include a casino. The company also owns City of Dreams, which stands opposite to the Sands' Venetian Macau.
Macau trumps Las Vegas for the title of casino capital of the world, though the area was opened up to competition only 10 years ago. The stakes are huge, and last year alone gambling revenues are said to have been nearly $34 billion, five times what Las Vegas pulls in each year. Better yet, revenues have risen by 26% since the beginning of this year.
Casino operators have had an explosive year so far, and it looks as if this is just the beginning. All of the companies mentioned are actively planning and building, and Las Vegas Sands is looking beyond Macau to opening a Las Vegas-style development in Spain, which CEO Sheldon Adelson characterized as a 5-to-10-year, $35 billion investment. Meanwhile, the company recently turned in numbers that showed a 31% revenue increase and a doubling of its net income.
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