2014 is set to be a breakout year for Macau, the Chinese gambling
and tax haven that neighbors Hong Kong.
With 47 casinos, Macau's role in the gambling and tourism
industry was cemented long ago. In fact, Macau became the world's
largest gambling center in 2006.
Macau's rise to prominence has been swift. Macau was already
one of the world's richest cities when the Portuguese colony
transitioned to Chinese control in 1999.
Until late 2001, all
in Macau was operated by a single company and protected by a
"monopoly license" issued by the Chinese government. It was in
2002, following its expiration, that the Western competition
arrived and Macau started to boom.
Despite the tremendous profitability of Macau's casinos over
the past several years, 2014 will be the best year ever for the
The first Western casino operator arrived in Macau in 2004,
Las Vegas Sands (
opened its first casino
Two years later the Wynn Macau opened its doors, introducing
Wynn Resorts (
and its high-profile founder - Steve Wynn - to the Chinese
market. Soon after came another Las Vegas Sands property, The
Venetian, followed by a long list of additional casinos and
A short ferry ride from Hong Kong and easily accessed through
its major international airport, Macau has become the chosen hot
spot for Chinese gamblers. Most impressive is that in just the
last eleven years, Macau's gambling industry has grown so much
that it now dwarfs Las Vegas.
Many U.S. casino operators have looked to Macau as a growth
opportunity. In fact, the Las Vegas casinos earned only about 15%
of Macau's total gambling revenue from 2013.
But the growth in Macau is projected to continue. Estimates
call for the industry to grow by 20% annually until at least
2018. By comparison, gambling revenues in Las Vegas grew by only
4.8% in 2013. The gap between Macau and Las Vegas is only growing
Macau isn't a new story, however. For several years now, the
major casino companies setting up shop in Macau. But the real
news is that 2014 will be a huge year for casino owners.
That's because no new casinos will be built in Macau in 2014.
That's a big change: there has been at least one new casino
opening every year since 2005.
As a result, the existing Macau casinos won't face increased
competition. Additionally, the largest hotel property in Mainland
China recently opened, and it's a short 10-minute drive from
Macau. To put this in perspective, the hotel and theme park drew
in 500,000 visitors in its first 10 days of operation.
Another boost to Macau is the strong global economy. While
there are concerns about China's slowing economic growth,
prosperous Chinese people continue to spend money.
Gaming stocks have been on a roll, with the
Market Vectors Gaming ETF (
up 45% in the last year. But the real opportunity for growth is
specific gaming companies operating in Macau.
Melco Crown Entertainment (
, for example, are up 133% in the last year. The company operates
multiple hot casinos in Macau and, with its geographic center in
Asia, is positioned to take advantage of the high growth rates in
the gaming sector.
Las Vegas Sands, which owns three properties in Macau, is also
poised to take advantage of the major growth in Macau. In
February, the company reported its fourth quarter 2013 earnings.
Its earnings increased 32%, entirely attributable to the 56% jump
in earnings from its Macau properties. The stock is up 69% over
the last year.
Meanwhile, Wynn currently owns two properties in Macau with
another one expected to open by 2016. Wynn's original Macau
property, Wynn Macau, features 501 table games, the majority of
which are in its VIP area. The second property, Encore at Wynn
Macau, features only suite-style hotel rooms. Wynn has clearly
positioned itself to cater to the wealthiest clientele, and it
appears to be paying off. The stock is up 112% over the past
While these stocks have made impressive gains, the numbers out
of Macau should be even more impressive in 2014. Each of these
three stocks offers investors a different way to enter the
Melco Crown Entertainment is Asia focused, with two casino
properties in Macau, the largest non-casino entertainment in the
area and new properties planned for both Macau and the Filipino
capitol of Manila.
Wynn is more diversified, but still largely focused on Macau
these days. Of its four properties, two are in Macau and a third
is on the way.
Finally, Las Vegas Sands offers a more diversified entry for
investors. Of its eight casino properties, three are in Macau and
three are in Las Vegas, with additional properties in Singapore
If you're ready to place a bet on the continued growth in
China's gaming sector, look no further than these three
Triple your dividends with one stock - starting this
With so many investors grabbing up shares of blue chips, yield
is getting hard to come by. In fact, the average yield of
the Dow has sunk to 2.1%. But our group of investors isn't
worried. We're collecting big monthly dividends…
up to $550 every 30 days
… from a little-known investment that
yields a whopping 12%
! If you'd like to tap into this income stream, and earn up
to triple the dividends of even the best blue chip,
click here for our full report on this