The build-out of Macau's gaming infrastructure has taken place at a fast and furious pace over the past five years, but with the opening of Las Vegas Sands'
A new market emerges
The Philippines is hoping to build its version of the Las Vegas Strip and developer Belle Corp. was one of four winners of a gaming license there. The problem is that Belle doesn't have gaming experience, so Melco Crown
We don't know exactly what the involvement will be, but if Melco is involved it will likely be pure upside for the company. Most of the $1 billion resort is complete and little capital would be required to manage the gaming section.
The reason this is important now is that on an enterprise value/EBITDA ratio Melco Crown is the least expensive of the major gaming companies at 7.4. It also doesn't carry much debt and has potential upside in Studio City in Macau if gaming tables are approved there.
Melco is often overlooked among bigger rivals but this is quickly becoming a great buy in gaming. There are options for growth and even the company's current operations come at a nice price. We don't know yet what that upside looks like in the Philippines, but it would be meaningful for a company Melco's size.