I love Vegas and you love Vegas, but does Wall-Street love Vegas? Maybe they don’t love Las Vegas. In a year-end review of MGM Resorts International’s stock price, The Motley Fool said that MGM’s poor performance was, in part, due to Las Vegas being a has-been gaming market.
The first problem MGM faces is that it’s largely centered in Las Vegas, which has become the has-been of the gaming world. With rivals Las Vegas Sands (NYSE: LVS ) and Wynn Resorts (Nasdaq: WYNN ) increasingly focusing on the strong Asian gaming markets, MGM has to depend largely on the health of the Vegas Strip, where gaming wins have fallen steadily since their 2007 peak.
While the take-away that Las Vegas is a has-been seems strong, it’s fairly accurate. The world is changing and so is where people gamble. In the past we’d see Wynn fly their Asian high roller to Vegas, but it’s much more economical for them just to fly to Macau where the player will still get signature Wynn service at a brand new casino.
With 48 states making money from gambling and online gaming becoming legal in the future we will continue seeing casino companies diversify out of Las Vegas searching for new income streams. New York, Miami and Boston are among the major cities looking to expand their gaming in the next few years while Philadelphia already has a casino in the city while there are multiple options in the Philly suburbs.
This is not to say Vegas won’t always rule our gambling vacation lives, but it is to say that there are other places inside and outside of the country that will be getting the attention that we’ve come to expect.
I’ll have more thoughts on the future of comps, with this being the case sometime next year because there’s a lot to consider.