If you’re looking for new investment opportunities, analysts recommend these casino developers.
The casino business might be stagnating in certain parts of the world, but now is the time to get rid of the industry’s weakest players and let the market swallow them up. Financial experts have shown that, in the hands of capable and successful managers, the gambling industry can be extremely profitable.
This is why casinos owned by well-run companies such as Melco Crown, Las Vegas Sands and Wynn Resorts are always a safe bet if you’re looking to invest some money. Due to their successful business strategies, these casino giants benefit from the growing demand in Macau, the world’s largest gambling hub.
If you’re finding it difficult to choose which business to entrust your money with, here are a few details on the world’s most profitable gambling companies:
Casino profits made during the first quarter of 2014:
• Melco Crown – $1.36 billion
• Las Vegas Sands – $4.01 billion
• Wynn Resorts – $1.51 billion
When it comes to sure investments, Melco Crown is probably one of the smartest choices you can make. This company has a clear strategy of targeting Asian players, making it one of the industry’s most promising names.
Most of this company’s profits come from its City of Dreams casino in Macau. In addition to this popular and successful venue, Melco Crown also operates the smaller Altira Macau and owns Mocha Clubs, the latter being Macau’s largest non-casino venue offering electronic-gaming machines.
As the only area where Chinese gambling laws allow casinos, Macau is the company’s main focus at the moment. By the middle of 2015, Melco Crown will inaugurate its new Studio City property and at the beginning of 2017 the fifth – and final – hotel tower at City of Dreams will open for business.
The company has several other plans for the future, including a new casino scheduled to open this year in the Philippines. Located on a 6.2-hectare site in Manila’s Entertainment City, the casino will offer nearly 365 gaming tables, approximately 1,680 slot machines and 1,680 electronic table games both to VIP and regular customers.
From a financial point of view, things look very promising as the company saw a 19% increase in sales during the first quarter of 2014, with adjusted property EBITDA going up 31%.
Las Vegas Sands
The famous American company has operations in Las Vegas and Singapore, but collects most of its profits from Macau, where it is a market leader. Industry experts claim Sands’ share in hotel room inventory is bigger than the combined shares of the next five gambling operators.
Over the coming years, Las Vegas Sands will keep spending a lot of money on its plans to expand in Macau. The Parisian Macau is expected to open its doors in late 2015, as Sands’ fifth property on the Cotai Strip.
If all plans go according to schedule, the developer will have more than 12,600 hotel rooms and apartments in Macau by 2017. Meanwhile, Sands is using its experience in offering gambling services in Asia to explore new investment opportunities in Japan and South Korea.
The first quarter of 2014 brought Sands a 21.4% increase in revenue of 21.4%. Adjusted property EBITDA increased 15.2% and diluted earnings per share rose 37.7%.
A third recommendation from financial gurus is Wynn Resorts, another casino giant operating in Macau and Las Vegas. In Macau, the company owns a 280,000 square feet casino resort with two luxury hotel towers offering more than 1,000 rooms, as well as additional retail and entertainment facilities. Wynn’s Las Vegas operations include two luxury hotel towers with 4,748 rooms and a 186,000 square feet casino.
According to international gambling news, Wynn has plans to inaugurate a new casino in the first half of 2016. Wynn Palace is a fully integrated resort with a 1,700-room hotel, a lake, meeting space, spa, food and beverage outlets and, of course, a casino.
Wynn has always focused mostly on getting VIP customers, which could mean slower growth when compared to Melco or Sands. But differentiating itself in the high-end segment of the market is not a bad strategy for Wynn.
The first quarter of 2014 brought the company increased revenues in Macau and a slight decrease in its Las Vegas operations. Even so, adjusted property EBITDA increased 9.7% compared to last year.
Regardless of your choice, industry reports show that you can’t go wrong with any of these casino giants. Such investments present the lowest possible risks, as all of these companies are growing steadily year by year.