Monday, June 2, 2008

Gaming in Asia - Long-term Trends/Analysis on CNBC

At the end of the day I DISASGREE with this guy. I find it ironic that the AGA (American) is commenting on Macau. Doesn't he have a vested interest? LOL

Asians like table games and probably will move towards MORE but I think they will remain heavily table based. I personally find more women play slots/machine games vs. table games so, as that segment of the economy starts to earn more there might be greater long-term potential.

I think most Americans are TIRED of ZERO freebies in Vegas and that is one reason why Vegas will be hurt MORE this time vs. previous slowdowns. Why?

1) The middle class can't afford the "fine dining." I fine that most people I talk to just want better "normal, affordable food/selections." When I was in Vegas earlier this year I would NOT have met this demographic as I wanted my girlfriend to enjoy the experience. We ate at many nice restaurants and took in shows every night but the bill was STEEP! She noticed it and, when we went to Tahoe a month later to ski everything was a bit lower key.
2) Airfares are through the roof so, even if you give someone a free room they have to get there!
3) When people get there they can't afford as much due to higher debt levels than previous recessions/slowdowns.
4) At some pointt the American casinos will eventually figure out that people want more VALUE (bang for the buck). The way to maximize profits is to FILL IN ROOMS, which generate gambling revenues and food sales. We'll see how it plays out......

Finally, the way to play Macau gaming is Wynn Resorts (Ticker: WYNN), MGM (MGM) and Sands(LVS). I've been told that, of the three, the Sands (Venetian) is BAR NONE the most comparable to Vegas.

Dan Ross

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