For years we've been anticipating a real shift of gaming revenue from the Macau Peninsula to Cotai in Macau. But for years, casinos in the old part of town have more than held their own against new competition. But two new resorts appear to be changing the picture, and it's starting to show in financial results.
Two weeks ago, Las Vegas Sands
This is in stark contrast to a 5.4% decline in EBITDA at MGM Resorts
This shift to Cotai should continue with Sands Cotai Central now open and a number of choices now available to gamblers. When Wynn, MGM, and SJM open on Cotai in a few years, Cotai will be a must-have spot for each of these companies.
Melco's looking attractive
Melco Crown is often the forgotten operator in Macau, with Las Vegas Sands and Wynn getting most of the headlines. But the company now has an enterprise value-to-trailing EBITDA ratio of just 9.0, better than either of its competitors by more than 2 points (without projecting Sands Cotai Central).
City of Dreams has steadily been improving, and with gaming shifting to Cotai, the resort's financial performance should steadily get better.
Melco may not put up the flashy numbers of some of its rivals, but it is one of the most attractive companies in the gaming space. Next week I'll cover the major players and make my top gaming-stock pick after the first quarter's results.
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