Wynn Resorts, Limited (NASDAQ:WYNN) owns and operates luxury hotels and destination casino resorts in Las Vegas and Macau, China. The resorts feature guest rooms and suites, restaurants, golf courses, and on-site luxury automotive dealerships. As gambling stocks started to come back this year, Wynn Resorts, Limited (NASDAQ:WYNN) might be your best bet–literally.
The gaming industry has lost ground in recent years due to the global crisis. Lately, we have seen some gaming stocks back in the game. These stocks are undervalued as they have yet to catch up to the overall market. Industry revenue in the first quarter of 2013 easily beat modest analyst expectations.
The rising of Macau
Macau is also known as the “Monte Carlo of the Orient.” In 2007, Macau overtook the Las Vegas Strip in gaming revenue. The numbers are impressive; Macau’s casino sector is more than five-times larger than Vegas’s. Macau’s economy is growing at a rate of 19% per year, faster than mainland China. By all means, Macau is the most important growth engine for traditional gambling.
In 2006, Steve Wynn opened his first casino in China. Today, seven years later, Macau accounts for more than 70% of Wynn’s earnings. Macau will continue to show strong growth in 2013. Wynn Resorts, Limited (NASDAQ:WYNN) operates in Macau under a 20-year concession agreement with the government. Furthermore, Wynn is developing a $4 billion gambling resort in Macau’s Cotai Strip expected to open in 2016. Steve Wynn once joked he will move Wynn’s corporate headquarter to Macau as soon as he learns to speak Chinese.
Wynn resorts is a win-win investment
Wynn Resorts, Limited (NASDAQ:WYNN) forecasts decent growth for 2013 and beyond as the U.S. and Chinese markets continue to recover. Many new opportunities will arise for the gaming company worldwide as more states begin to approve gambling venues in an attempt to offset rising deficits. Both Las Vegas and Macau should continue to contribute to Wynn’s growth.
Wynn Resorts, Limited (NASDAQ:WYNN) plans to unveil an online-gambling venture, which will provide a whole new avenue for growth. The company has already applied for an online- poker license in the state of Nevada, and rumor has it that Wynn engaged in talks with Zynga Inc (NASDAQ:ZNGA) to deliver a “real cash” online-poker platform.
Furthermore, Zynga Inc (NASDAQ:ZNGA) is already gaining experience in the U.K. with its real money venture, Zynga Plus Poker. The recent legalization of online gambling in New Jersey along with Zynga’s reputation for innovation and creativity puts the company in an excellent position to penetrate this highly lucrative market.
Online gaming and competition
The gaming market is shifting to online at a steady pace. Legislators started to realize tax revenue money is “on the floor.” As of today, international online gaming revenue is more than $30 billion and the market is only in the introductory phase of its product-life cycle. The industry is extremely lucrative and Wynn Resorts, Limited (NASDAQ:WYNN) and peers are going to riding the wave.