Why 1 Casino's Big Bet Could Pay Big Dividends

The following video is from last week's MarketFoolery podcast, in which host Chris Hill, along with Tim Hanson and Joe Magyer, discuss the latest business news. Wynn Resorts CEO Steve recently announced plans to build a $4 billion casino in Macau. In this segment, the guys analyze the cost of doing business in Macau as well as how cyclical casino stocks like Wynn and Las Vegas Sands can be. For investors seeking to bet on Macau, the guys also share the relative merits of U.S.-based Wynn and Hong Kong-based Melco Crown Entertainment.

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Chris Hill owns shares of Melco Crown Entertainment. The Motley Fool has a disclosure policy. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


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  • Report this Comment On June 13, 2012, at 8:11 PM, cp757 wrote:

    Chris I don't know why you are talking about Steve Wynns new casino in Cotai it won't be built until 2016 or 2017. Las Vegas Sands will have the best market share in Macau and will tell everyone about the increase in market share at the next conference call in 6 weeks. The last conference call for WYNN was a disaster and the next one will be worse. Las Vegas Sands had the best first quarter ever and the next conference call will be even better and they did over 1 billion in EBITDA in the first quarter an industry first. They are taking market share from Wynn every month in Macau because Steve Wynn dose not have a casino on Cotai Central. When you see Steve Wynn's next conference call and he announces he is loosing market share in Macau what will you say. Opps I forgot to tell you Steve Wynn will make a splash in Macau with an X shaped 6 million square foot hotel with 2000 rooms in 2016 or 2017 but he can't make money for 5 years ? Wynn vowed his $4 billion Macau resort will top anything he's done . His hotel will be off the main strip facing away from the main action and if he thinks 6 million square feet sounds like a large hotel he could fit 2 of them in the Venetian Macau with room left over. The iconic Venetian Macau is over twice the size at 13,850,000 square ft and is so big it would hold ninety Boeing 747 jumbo jets. Steve Wynns new casino will have 2000 rooms but the Venetian and Cotai Central will have 12964 rooms. All of these added rooms will make the Venetian almost 7 times the size of Steve Wynn's hotel. Chris for your advice to the investor you should tell them to follow the money that a company makes now not in 5 years. What did you look at in Macau besides Steve Wynns comped rooms?

  • Report this Comment On June 13, 2012, at 9:21 PM, mrtaxx wrote:

    Are you kidding me? Your telling people to bet on Wynn who will be opening their Casino in 2016/2017? How much are you getting paid to write this dribble.

    How about going into how Wynn will pay for the New Macau Casino, you know the $4B dollars he doesn't have. Wynn will probably have to issue stock to get money to complete the project. How will that effect the stock prior to the Casinos completion?

    You should be talking about the casinos that have growth prospects going on now, like LVS. I would write more but the response from cp757 above almost says it all.

  • Report this Comment On June 14, 2012, at 11:38 AM, cp757 wrote:

    mrtaxx I am glad you feel I "Said it all" but wait there's more:

    Las Vegas Sands has 22.87 billion in assets and 4.061 billion in cash in the bank and the balance sheet is unmatched in the industry. To give you an idea Wynn only has 7.4 billion in assets with 6.962 billion in liabilities and the forward growth of the company has fallen from over 30% to just 4.22% while Las Vegas Sands has soared to 30.82% future growth and that does not take into consideration higher market share in Singapore, Macau,Vegas, and Pennsylvania at the next Conference Call. Sheldon Adelson has always talked about growth and he moves to his own vision of the world. Even when they told him he would go bankrupt and to stop in Macau, and Singapore he kept going. He sees what he wants to accomplish and he builds it in the same way Steve Jobs saw his future and built AAPL, Adelson has overcome every obstacle to have growth and build Las Vegas Sands into the best investment in the sector. This story is all about Macau and I find it funny that they never talk about Singapore. Las Vegas Sands is one of two Integrated resorts in Singapore and the government said that would be until 2017 but now they say LVS will be all they need and they don't want to add to the number of casinos. The government built a 1 billion dollar garden next to the Marina Bay Sands just to support the location. The Garden by The Bay will bring in 5 million visitors a year and is opening this month. The Marina Bay Sands has over 60% of the market share in a duopoly that will go to 70% market share and grow every year. They have 10,000 employees at the integrated resort and sell 11 million dollars a month in high end shoes,handbags, and jewelry in the malls at the Marina Bay Sands. They also have a 98.5% occupancy rate at the resort. The KU DE TA is a world renowned restaurant that sits on top of the iconic Marina Bay Sands, 626 feet in the air next to an infinity pool longer than the Eiffel Tower . Just to tie this in with the video, The Marina Bay Sands is bigger than the resort Steve Wynn will build in Macau and is an iconic building rising 626 feet in the air and is now the template that every designer compares his project to for an Integrated resort but I guess Steve Wynn is happy with an X shaped casino when he builds it in Cotai. I guess he thinks he will out do himself.

  • Report this Comment On June 17, 2012, at 10:04 AM, cp757 wrote:

    I just thought of one more thing since no one has written anything, It's funny Chris Hill,Tim Hanson and Joe Magyer said "Anyone who's ever been to a casino knows that gaming doesn't pay a long-term dividend" and that is just not true. I dont want to blame them because they may not know what is written in the article and its not their fault. In 2009 Las Vegas Sands sold for 1.38 on 03/09/2009 and you could buy 10,000 shares for $13,800 dollars. That is a great return on investment if you look at the stock price but now they pay a 2.24% dividend so you get a 10,000 dollar dividend. That's a 72% return on just the dividend. I did not read any articles from Chris Hill, Tim Hanson or Joe Magyer back in 2009 to buy LVS because you could get a 72% dividend. I did see in the video they snickered about illegal activities in Vegas and Macau but we all know about that. I did hear in the video that the table limits are higher so I guess we can come away with some information. Great job guys.

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