Sands Leading In New York Casino Competition, Says Analyst

Wall Street Analyst reports that Las Vegas Sands (NYSE: LVS) has a strong chance of obtaining one of the three casino permits in New York’s downstate region.

Wells Fargo analyst Daniel Politzer recently reported to clients that it may be a while before any new casino hotels are developed on the Las Vegas Strip. Noting Sands’ planned expenses in Macau and its proposed 5 billion-dollar project in Nassau County, NY, Politzer believes that Sands has the innermost pipeline for the industry’s most ambitious investments. Politzer commented on Sands’ New York venture, expressing that they are the likely front-runner due to the magnitude of the project and their capability to cooperate with local entities. He further noted that Sands’ proposal is the most desirable out of the dozen or so contenders for three downstate permits. Despite the result of the bid, Sands holds financial obligations to Nassau County.

Politzer didn’t provide much information on LVS’ potential plans to develop an integrated resort in Thailand, suggesting we shouldn’t expect much in the near future. Alongside plans to increase operations in Macau, Singapore, and the possibility of building a new property in Uniondale, NY, Thailand is also being considered as a potential destination.

Don’t Expect Much

In Las Vegas, the upcoming additions to the city’s casino offerings are The Fontainebleau on the Strip and Red Rock Resorts’ Durango Station in the southwest corner, with both planned to open by the end of 2020. After that, there won’t be any new major projects in the near future as operators are focusing on making improvements to existing venues instead. As an example, Caesars Entertainment (NASDAQ: CZR) is transferring a tower from the Horseshoe to the Paris as a means to benefit from its higher occupancy and rates. Moreover, Penn Entertainment (NASDAQ: PENN) is investing $206 million for an expansion of M Resort in Henderson. Red Rock also recently unveiled its plans for substantial renovations of Green Valley Ranch Resort Spa & Casino which is in Henderson too. Once Durango is done, the next step is likely to be the $800 million Inspirada project for Red Rock.

Polizer reported that despite minimal development activity during the COVID-19 pandemic, there are now numerous projects in line for their gaming coverage. Furthermore, MGM and Wynn are both expected to have robust pipelines in store.

MGM, Wynn Also Strong Pipelines

Due to limited opportunities within the country and existing political barriers, gaming companies are expanding internationally for diversification. MGM Resorts International (NYSE: MGM) and Wynn Resorts (NASDAQ: WYNN) are two such companies. In 2030, MGM is set to open an $8 billion integrated resort in Osaka, Japan, though this is not currently viewed as a major opportunity. Wynn is planning on opening Wynn Al Marjan Island in the UAE which is anticipated to be a greater success – a Wells Fargo analyst even commented that when it opens next year (2023) it could add 10% to the operator’s share price.