Las Vegas Sands Corp. (LVS), MGM Resorts International (MGM), Wynn Resorts, Limited (WYNN): All Roads Lead Here

Wynn Resorts, Limited (NASDAQ:WYNN)

Wynn Resorts, Limited (NASDAQ:WYNN) was actually one of the earliest entrants into Macau, winning one of the original three licenses, versus the sub-licenses that were subsequently bought by Sands and MGM. However, the company has only one casino in the province, which was supplemented by a later expansion project, while Sands has already put up four casinos. Like its competitors, though, Wynn Resorts, Limited (NASDAQ:WYNN) is planning a new resort on the Cotai strip, a mega $4 billion project that should improve its prospects in the region.

In FY2012, Wynn Resorts, Limited (NASDAQ:WYNN)’s China operations reported pretty weak results, with small declines in both revenues and adjusted operating income. Despite a solid occupancy level at its Macau resort, the company generated a below-average winning percentage at its table games and had weak performance in its non-gaming segments. In addition, the company has strategically focused its attention and marketing resources on the subset of customers that will utilize multiple revenue-generating services. While Wynn Resorts, Limited (NASDAQ:WYNN) is going through some growing pains, an additional Macau casino should improve its long-term position.

The bottom line

Despite pockets of growth in select U.S. markets, the gambling giants have turned their collective attention to the large pool of customers and profit in China’s Macau province. While the house always wins, the companies need to watch the bottom line and avoid the construction excesses that landed them in hot water during the financial crisis. Since playing catch-up is hard to do, investors should stick with the leader and bet on Sands.

The article All Roads Lead to Macau originally appeared on Fool.com and is written by Robert Hanley.

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