As someone who likes to throw the dice on occasion, I'd find it interesting to visit a place like Macau and enjoy a new place to gamble, though the cost associated with the trip makes it nearly impossible. Las Vegas, on the other hand, is an affordable destination from most of the United States, making it much easier for the casual gamer to find a table at the variety of casinos on and off the Vegas Strip.
My Foolish colleague Travis Hoium made the argument that MGM Resorts
Show me the money
MGM has spent much of the last two years developing and building CityCenter, an almost 18 million-square-foot mixed-use complex. At nearly $9.2 billion, it is the largest privately financed development in the United States. It sold half of the project to Dubai World, which will help share the current losses while waiting for future gains. With more than $12 billion in long-term debt, MGM really needs CityCenter to start making some money to help the company deleverage and overcome what some have called the worst investment in gaming.
Not all about Vegas
Some losses from CityCenter are recovered elsewhere in the USA, though MGM faces stiff competition from Penn National Gaming, Boyd Gaming
Can't forget about Asia
The majority of gaming revenues shifted overseas to Asia, where Macau pulls in four times the revenue of the casinos in Las Vegas. This could be because Macau is still growing and the luxury has yet to wear off. Although it hasn't invested nearly as heavily in Macau as Wynn Resorts
What does this mean for Fools?
CityCenter may not save Las Vegas by itself, but its success could get more people returning to Vegas, continuing as a much cheaper alternative than Macau for the casual gamer at least. However, as with any industry that relies on discretionary income, the economy's current malaise greatly affects business in Las Vegas. To keep an eye on this exciting industry, add these companies to My Watchlist.
Fool contributor Robert Eberhard has lost a bit of money at craps over the years but does not own any shares of the companies mentioned here. Follow him on Twitter, where he goes by @GuruEbby. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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