Last week, I came out to Las Vegas to spend a few weeks here during Harrah's Entertainment's
On Saturday, a combined 3,009 people entered the $1,500 buy-in No-Limit Hold'em event and $2,500 buy-in H.O.R.S.E. event, making it the largest number of poker players ever to enter a single day of events (the first day of the 8,773-player 2006 WSOP Main Event was divided across four separate dates). Just a week earlier, 2,998 players entered a $1,500 buy-in No-Limit Hold'em event, marking the previous record.
And Harrah's isn't the only one capitalizing on the fact that much of the world's poker-playing population is all in one place at the same time. In fact, several other casinos in Las Vegas are holding tournament series at the same time, including Las Vegas Sands'
Notes from the Las Vegas Sands shareholder meeting
On Thursday, I went to the Las Vegas Sands shareholder meeting at The Venetian. Las Vegas Sands -- which happens to be my latest pet project -- is one of the most exciting companies in the casino business, and has perhaps the greatest growth trajectory. The company opens the Venetian Macao this summer, which will be just the first (though by far the largest) of its seven Cotai Strip properties in the exploding Macau gaming market. When complete, the company's Cotai Strip properties will feature approximately 2,900 table games, 16,000 slot machines, and nearly 20,000 hotel rooms. LVS also opens the Palazzo on the Las Vegas Strip later this year, with a 5,000 slot casino opening in Bethlehem, Pa. in 2008, and the Marina Bay Sands opening in Singapore in 2009.
In addition to the growth trajectory, the company also has what has been a very successful convention-based business model. During the annual meeting, CEO Sheldon Adelson said that 50% of the visitors to the Las Vegas Strip fit a Sunday-Thursday and Thursday-Sunday pattern, while 30% to 40% of visitors are Free Independent Travelers (FIT), and 10%-20% are gamblers. In contrast, 50% of the Venetian's business comes from higher-spending convention travelers. And if I heard correctly, Adelson also said that The Venetian has 330 meeting rooms, which are sometimes booked 5-10 years in advance. As such, the company is "not subject to macroeconomic trends," which has helped the Venetian to consistently produce an occupancy rate at 98% and 99%.
Meanwhile, the company's ability to monetize its real estate will yield high returns on invested capital. The company expects to have recovered 47% of the combined $3.3 billion cost of building the Venetian and Palazzo through the sale of the Palazzo mall space, which accounts for just 5% of the total land. The company also expects to recover 103% of the cost of building the $2.4 billion Venetian Macao through the sale of mall space, while essentially funding the entire Cotai Strip through the sale of mall space and vacation suites.
This is a bit like buying into a poker game and receiving a cash refund while keeping the chips.
During the Q&A, one shareholder asked about the labor shortages in Macau. LVS President Bill Weidner noted that the main issue is balancing the interests of the people living on Macau with those of the 1.3 billion people next door on mainland China who would be willing to work for a lot less.
Another shareholder asked why The Venetian Las Vegas is not a 5-star or AAA Five-Diamond property like Wynn Resorts'
From the Ameristar Casinos shareholder meeting
On Friday, Motley Fool Hidden Gems selection Ameristar Casinos
The meeting lasted only half an hour. The company did say that the East Chicago property would be re-branded within 12 months after the close of the acquisition, which is expected late this year. Meanwhile, the Council Bluffs expansion project is slated for completion in mid-2009, and will feature a single-level platform incorporating the existing riverboat casino with a view overlooking the casino floor.
Double down with further Foolishness:
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- Gaming Roundup: LVS and MGM Mirage Disappoint
- Ameristar Scores East Chicago