Las Vegas Sands' Expansion Plans Continue

The expansion of Las Vegas Sands (NYSE: LVS  ) is continuing to take place around the world and the company will soon take another step toward domination of the Macau market: It announced that the second phase of Sands Cotai Central in the Cotai Strip will open on Sept. 20. Sheraton will be opening a hotel tower with 3,896 hotel rooms and the Shoppes Cotai Central will add another floor of space. The next addition to Cotai Central will be made in 2013.

This expansion is part of the latest growth plan for Las Vegas Sands in Macau and will be the last resort to open there until at least 2015, when Wynn Resorts (Nasdaq: WYNN  ) and MGM Resorts (NYSE: MGM  ) are expected to enter the Cotai market.

But the company has even bigger plans half a world away. It's currently moving forward with its plans for a huge development in Spain, and Spanish officials don't seem to be concerned about the company's latest legal troubles, which could have delayed the development. Nevada officials are looking into potential bribery in China, and the U.S. Department of Justice and SEC both have probes open regarding the company. But high-level officials in Spain are brushing off the investigations and seem more interested in charming Las Vegas Sands than digging into its past.

The logic for Spain isn't hard to see. The country's banks were recently bailed out and unemployment is around 25%. Needless to say, I don't think bribery will be an issue for Spain.

Foolish bottom line
Las Vegas Sands has one more project planned on the Cotai Strip, one that will likely be completed around the time Wynn completes its resort and before MGM and Melco Crown (Nasdaq: MPEL  ) make expansions on Cotai. But if the company is going to continue to grow, it has to look 10 years out for the next big project, because growth in Asia is slowing. Sheldon Adelson has his sights set on Spain and he could also look to Japan, Vietnam, and South Korea.

These expansions will be key to the company's continued growth, especially considering the expansion of gaming in Asia. These are just a few of the topics covered in our new analyst report on Las Vegas Sands. The report comes with a year of updates and will keep you on top of all of the latest information about the stock. For more information, click here.

Fool contributor Travis Hoium manages an account that owns shares of Wynn Resorts and Melco Crown. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.

The Motley Fool has a disclosure policy. We Fools may not 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.


Read/Post Comments (8) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On August 23, 2012, at 3:42 PM, cp757 wrote:

    Travis good report. Just two things to add.

    Mainland visas to Macau made easier

    The central government has announced an easing on restrictions on travel to Macau by people living in six big mainland cities.

    The Ministry of Public Security announced yesterday that from next month people studying or working in Beijing, Chongqing, Guangzhou, Shanghai, Shenzhen or Tianjin who are not permanent residents of those cities will be able to get visas for travel to Macau, Hong Kong or foreign countries, our sister publication Business Daily reports.

    The president of the Macau Travel Industry Council, Andy Wu Keng Kuong, told TDM the easier visas could mean more visitors to Macau.

    Gov’t tweaks table count for poker and mahjong.

    08/23/2012

    Union Gaming says Las Vegas Sands is likely to be the largest beneficiary of a new table count math on the Cotai Strip and all of Macau.

    The Gaming Inspection and Coordination Bureau has recently implemented a new way of accounting for poker tables under the general table cap of 5,500 live table games, Union Gaming Research Macau said in an investors note published yesterday.

    If a casino is operating up to 20 poker tables in the same area, the regulator will count them as only one table.

    The same source added that the same happens for mahjong tables.

    Las Vegas Sands has 1,535 mass tables in Macau and thats almost 30% of all the tables in Macau.

    I guess they are going to push them into groups of 20 and buy some more tables.

    “This move is indicative that the government will be willing to work with casino operators to help ease capacity constraints prior to the expiration of the table cap next year.”

    This simply means Macau has so much business they need to take the general table cap off the table's to keep up with demand and Las Vegas Sands is at the right place at the right time. Again.

    Sounds very positive to me

  • Report this Comment On August 23, 2012, at 4:07 PM, cp757 wrote:

    Spain will be announced in September 2012 Mr. Leven the company’s president said at a news conference in Barcelona.

    “Las Vegas Sands still hopes to start construction in mid-2013 and complete the complex within 10 years”

    Tourism is a sector Spain already excels in - it accounts for around 10 percent of the country's economic output and is one of the only drivers of growth.

    Eurovegas would tap into that, and Las Vegas Sands claims the project would eventually create a quarter of a million jobs in Spain.

  • Report this Comment On August 23, 2012, at 4:15 PM, cp757 wrote:

    Spain will be announced in September 2012. Mr. Leven the company’s president said at a news conference in Barcelona.

    “Las Vegas Sands still hopes to start construction in mid-2013 and complete the complex within 10 years”

    Tourism is a sector Spain already excels in - it accounts for around 10 percent of the country's economic output and is one of the only drivers of growth.

    Eurovegas would tap into that, and Las Vegas Sands claims the project would eventually create a quarter of a million jobs in Spain.

  • Report this Comment On August 23, 2012, at 4:16 PM, bornlazy wrote:

    One additional item, the Cotai Central has four towers. After the Sept opening of Shareton, LVS has two more towers to be opened earlier next year. Further more, lot 3 will be completed just before

    Wynn and MGM. MPEL also has the MSC project in the wing. We all know the VIP business is low margin and high risk. Mass market, average wage continue to go up even during the slow down, will be the most important part of the business. LVS will capture the bulk of the mass market before the wage slow down.

  • Report this Comment On August 23, 2012, at 6:44 PM, spokanimal wrote:

    Travis,

    Regarding your comment:

    " But if the company is going to continue to grow, it has to look 10 years out for the next big project, because growth in Asia is slowing"

    ... what is it about Asia that causes you to believe that Asia won't be the fastest growing geography on earth 10 years from now?

    Thx, Spok

  • Report this Comment On August 23, 2012, at 7:07 PM, ncinterpreter wrote:

    Good report but I have trouble investing in Sheldon Adelson!

  • Report this Comment On August 23, 2012, at 7:55 PM, cp757 wrote:

    Travis this pull back in LVS was about China's "hard landing". That is a manipulative term.

    They are not landing. China is not crashing. They are not even comming in for a landing. They are continuing to fly. A pessimistic view would put China's GDP growth at 5 percent for the current year, which is still "five times more than the U.S. Chances are growth would be better than that. It will be more like 7 percent or more.

    Nomura economist Zhiwei Zhang said in a note Wednesday that he believes stimulus spending would in fact help spur China’s growth rates.

    Much of what’s been sketched out is likely to win support from key decision makers in Beijing as a new administration set to take the helm in a once-in-a-decade leadership change will likely turn to a model that’s helped to ramp up growth in the past.

    Zhang also said similar changes in leadership at the municipal and provincial levels are also likely to urge the central government to get behind the new stimulus.

    “We can expect them to put more pressure on the central government to provide financing,”

    The Ministry of Public Security announced yesterday that from next month people studying or working in Beijing, Chongqing, Guangzhou, Shanghai, Shenzhen or Tianjin who are not permanent residents of those cities will be able to get visas for travel to Macau, Hong Kong or foreign countries.

    Macau has changed the rules for the gaming tables and will allow more tables because of demand. They are working with travel visas to bring more visitors to the Cotai Strip.

    Las Vegas Sands is opening rooms as fast as they can and cant keep up with demand.

    Travis I just dont know what you are looking at when you say "look 10 years out for the next big project," Las Vegas Sands is in the middle of the biggest project on the planet and they will have over 24,000 room in the next 6 years.

  • Report this Comment On August 24, 2012, at 11:27 AM, cp757 wrote:

    This statement :

    "The Ministry of Public Security announced yesterday that from next month people studying or working in Beijing, Chongqing, Guangzhou, Shanghai, Shenzhen or Tianjin who are not permanent residents of those cities will be able to get visas for travel to Macau, Hong Kong or foreign countries."

    In the United States we take traveling from state to state for granted. Visas are a big deal in China.

    This would be the same as the administration in the United States tell the people of California, Texas, New York, Florida, and Illinois that they wanted them to go to Las Vegas only multiplied by 20.

    China wants the people to go to the Cotai Strip and Las Vegas Sands is building rooms as fast as they can. Nothing like this has ever happened in history.

    It took 70 years for Las Vegas to build to were it is today and Las Vegas Sands will do 25% of the revenue that Las Vegas will put out.

    Las Vegas Sands will do 20% of the revenue of Macau and 60% of the revenue in Singapore.

    Even Sands Bethlehem in Pennsylvania is one of the top casinos on the east coast and is taking business from Atlantic City.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1993959, ~/Articles/ArticleHandler.aspx, 10/24/2014 9:06:15 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement