Gaming: High Rollers

By Staff -- HOTELS Magazine, 5/1/2006

Steve Wynn raised the ante for casino hotels with his US$2.7 billion investment in Wynn Las Vegas and raised a lot of eyebrows for what is considered the most expensive gaming complex ever built. But not for long—that bid would not even get Wynn to the table in Singapore. Gaming is a hot market, and the stakes are going up fast.

The project: MGM Mirage’s Project CityCenter

The price: US$7 billion

The play: An 18 million sq ft. (1.672 million sq. m) “urban metropolis” comprising a 4,000-room luxury hotel and casino; two, 400-room non-gaming boutique hotels, and retail, dining, entertainment and condominium space. Located on the Las Vegas Strip between Bellagio and the Monte Carlo, the complex is slated to open in 2009.

The project: Boyd Gaming’s Echelon Place

The price: US$4 billion

The play: A multi-faceted, world-class resort on the Las Vegas Strip that will include The Echelon Resort, with its 2,600-room Resort Tower and 700-room Suite Tower; The Shangri-La Las Vegas; the Delano Hotel and the Mondrian Hotel. In addition to these 5,300 rooms, the complex will include a new ExpoCenter, retail promenade, restaurants and nightlife venues. Opening is slated for 2010.

The project: Las Vegas Sands Corp.’s Marina Bay Sands

The price: US$3.6 billion.

The play:  A bid to the Singaporean government proposing 2,500 hotel rooms, including meeting, convention and exhibition space, three entertainment venues, retail venues, and, just for good measure, a museum.

The project: Genting International/Star Cruises Singapore Entertainment & Events Destination

The price: US$3.1 billion.

The play: A bid to the Singaporean government would include 5,000 hotel rooms and a world-class convention facility.

Note: MGM Mirage (partnering with Singapore’s Capital Land) and Harrah’s Entertainment (with Keppel Land and STAR, an Asian media and entertainment company) also submitted bids to build a casino/resort complex along Singapore’s waterfront. Their offers were not disclosed. However, consultants estimate that US$3 billion will be the minimum opening bid for any hopeful playing for what should be a lucrative, diversified revenue mix.

The Match-Up: Las Vegas vs. Macau

Total 2005 revenues

Clark County, Nevada (which includes Las Vegas): US$9.7 billion; Macau: US$6.8 billion

Average table take per day

Las Vegas: approximately US$2,500; Macau: nearly US$18,000

Slot machine revenues

Las Vegas: 66% to 70% of total gaming revenue; Macau: roughly 5%

Customer profiles

Las Vegas: Blackjack is the biggest revenue generator among table games, accounting for 35% of the US$3.7 billion in statewide table game revenues; live poker is gaming momentum; US$1 tables are still on offer, though the ante is generally far higher.

Macau: VIP Baccarat delivers 62%of revenues among games of fortune; 70% of the gaming income comes from VIPs and high rollers; minimum table bets typically are US$40, though players can still find tables with a US$25 starting bet.

Market makers

Las Vegas: Gaming is just one leg of the revenue stool for Las Vegas’ casino hotels; total non-gaming revenue now exceeds the gaming take for most of the major players.

Macau: The ability to extend credit can add a fivefold upside to the revenue-generating capabilities of local casinos.

Sources: HVS International Gaming Services; CSLA Investment Bank; Asian news reports