Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Casinos Are Getting Ready for the Jackpot

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

Last year was great for big-time-gaming stocks such as Wynn Resorts (NASDAQ: WYNN  ) , Las Vegas Sands (NYSE: LVS  ) , and MGM Resorts International (NYSE: MGM  ) . Investors saw continued growth in the world's new gaming mecca, Macau, along with unexpected strength in Vegas. Now, with new markets on the horizon and the carrot stick of online gaming getting closer and closer, the coming year may be just as good if not better than the last.

Wynn Resorts is up nearly 60% over the last 12 months. Las Vegas Sands is just under that, up around 55%. And the previously beleaguered MGM Resorts is up more than 80%. Not a bad run for discretionary stocks during a period of cautious economic recovery.

Leading the charge again in 2013 was Macau. Month after month, analysts saw Macau growth outpace predictions. Total gambling revenue for the region hit $45.2 billion -- near 20% more than 2012's number and beyond all forecasts. For 2014, analysts expect some slowing for the Chinese gambling giant, but it's still pegged at a promising10%. As the credit environment tightens up in the region, Macau may see fewer visitors, but the ones who do come are predicted to stay longer and spend more.

All three companies have a presence on Macau, and wisely so, as it generates seven times the revenue that the Las Vegas Strip does. Wynn is in the midst of building a $4 billion flagship property, while Las Vegas Sands is spending $2.7 billion on the Parisian, and MGM is adding on with the $2.6 billion MGM Cotai.

The area will keep driving growth for the companies in the short term, but new prospective Asian markets could yield another round of rocketship growth in the near future.

Taiwan and Japan
Matsu is a small island that is actually closer to mainland China than it is Taiwan. The name has gotten quite a bit of press lately as its local and national governments have moved toward legalizing gambling. All three casino companies are waiting for the green light, at which point there will no doubt be a land-grab frenzy (if it already hasn't happened behind closed doors). Given Matsu's proximity to the mainland, the tiny resort area could become just as important as Macau.

Also on the docket is opening the doors to Japan, according to The Wall Street Journal. Long an illegal business, casinos are set to enter the light as Japanese regulators see it as a boost to the country's ambitious growth plans. While there is still much to be determined on the regulatory level, the Journal article put a possible date of 2016 for licensing out casinos in the country.

Though tables and slot machines are currently outlawed, Japan has long enjoyed gambling in the form of races and lotteries. The Journal article put Japanese gambling spending at 30% of the country's total leisure spending.

Either prospect spells more good times for the big three casino operators. Though the stocks are all trading at premiums to their previous levels, the potential for substantial growth may put the value beyond the price.

Why not bet on the best?
As every savvy investor knows, Warren Buffett didn't make billions by betting on half-baked stocks. He isolated his best few ideas, bet big, and rode them to riches, hardly ever selling. You deserve the same. That's why our CEO, legendary investor Tom Gardner, has permitted us to reveal The Motley Fool's 3 Stocks to Own Forever. These picks are free today! Just click here now to uncover the three companies we love. 

Read/Post Comments (1) | Recommend This Article (1)

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 January 07, 2014, at 3:59 PM, spokanimal wrote:

    You got it wrong, Michael Lewis.

    To say that current macau concessionaires are "waiting for the green light" in Matsu is a pretty gross over-statement.

    Las Vegas Sands is already on record as saying they aren't interested in Taiwan if they can't build on the big island.

    Currently, the most interest I've seen in Matsu is from a small company put together by ex-LVS executive, Bill Weidner...

    ... and it's fair to say that he now occupies a much smaller seat in the prestige arena than he occupied during his years as the guy that Alan Leven replaced over at Sands.

    As tough as it is to stomach a CFA-wanna-be like Travis Hoium, it's fair to say that he gets his facts more straight that you did in this piece.


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: 2784827, ~/Articles/ArticleHandler.aspx, 9/4/2015 10:55:04 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...

Michael Lewis

Michael is a value-oriented investment analyst with a specific interest in retail and media businesses. Before coming to the Fool, Michael worked with private investment funds focusing on deep value and special situations. Currently living in the media capital of the world--Los Angeles, California.

Today's Market

updated Moments ago Sponsored by:
DOW 16,167.72 -207.04 -1.26%
S&P 500 1,928.01 -23.12 -1.18%
NASD 4,706.45 -27.05 -0.57%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/4/2015 10:39 AM
LVS $47.76 Up +0.09 +0.19%
Las Vegas Sands Co… CAPS Rating: ****
MGM $20.34 Down -0.15 -0.73%
MGM Resorts Intern… CAPS Rating: ***
WYNN $73.98 Up +0.16 +0.22%
Wynn Resorts, Limi… CAPS Rating: ***