Why Gaming Will Win

I’ve been singing the praises of Las Vegas gaming companies for over a year now. MGM, Las Vegas Sands and Harrah’s have all rewarded those who heard those praises with big stock gains. But valuations have been pushed up because of astronomical land purchase values in Las Vegas and speculation in Macau. $30 million an acre is now the going rate in Sin City. But these prices can’t grow forever. There’s seriously no way Vegas can grow enough to support those values. Right?

Party right. See everything is a market. The market is hot right now with wealthy people and companies flush with money ready to buy into gaming. But it doesn’t have much room to go up. So if these gaming companies are going to grow they’ll have to suck more money out of their properties or find other cash flow.

Getting more money out of existing properties might be a stretch. $300 a room is mighty ex