Las Vegas Casinos Getting it from All Sides

Las Vegas CasinosLas Vegas Casinos Getting it from All Sides

One of the interesting things about analyzing financial markets as they apply to the city of Las Vegas is that those same financial markets could be friendly one day and then become very ugly the next. Throughout most of the decade, casino companies in Las Vegas have been doing excellent business both in Las Vegas and abroad and because of that they have managed to hedge most of their bets. However, it appears as though circumstances are starting to turn against even the casino giants of Sin City to the point where their shares are really starting to feel the hurt on Wall Street in the United States of America.

A giant casino operator in Las Vegas is the Las Vegas Sands Corporation. They are famous for their Sands and Venetian casinos in Las Vegas, both of which have been staple casino resorts in the city for the last few years. However, both casino resorts have been down in terms of their earnings over the last decade and it is for this reason that many of the company’s executives have been looking abroad in an effort to make enough money to offset the losses that their flagship operations in Las Vegas had been suffering.

One way they did that was to look to the gambling Mecca of the east in Macau, a place that has really been booming throughout the last couple of years. Las Vegas Sands was responsible for opening both Sands Macau and Venetian Macau operations, both of which took off almost immediately from the point of being opened. In fact, as of right now, Macau gaming revenues are expected to beat those of 2007 by almost 50% which is no mean feat to be sure. However, restrictions by the Chinese government have now prevented tourists from mainland China from visiting Macau more than once every three months and that in turn has resulted in a slump of revenue for Macau-located casinos. This in turn has reverberated through the financial ladders to the United States, where the LVSC has taken a huge hit to their stock prices, closing at an all-time low of $23.11 per share.

The hit taken by the Sands Corporation was perhaps the most egregious, although there are other casino operators that are starting to feel the heat as well. MGM Mirage, famous for the casino of the same name in Las Vegas, saw its shares close at $21 which represents a low point for the last year. Wynn Resorts Limited, which is of course famous for the resort of the same name in Las Vegas, closed down about 5% on the day’s trading. The element of commonality between these casino operations is that they all had subordinate operations in Macau that were negatively affected by the new Chinese government imposed restrictions on travel to Macau.

What does this mean for Las Vegas? At the moment nothing, but if current trends continue the future could see some serious downsizing of some gambling operations within the city.

July 13, 2011 by : posted in Las Vegas News No Comments