Monday, November 02, 2009

Las Vegas Sands Geo-Politcal Risk Issues

Las Vegas Sands (LVS) had their conference call and talked at length about Macau and how it will be a winner as the market develops and the gambling market grows. They keep mentioning that they cannot talk about the Hong Kong listing but then they tease and claim to expect good things. Talk about a conflict.

OK here is the problem. China has 1.3 billion people. If as and when their economy continues to grow there will be gambling. But why will the gambler want to go all the way to Macau? Why would Beijing want the cold hard cash to leave their economy? How will they compete with new to be developed casino offerings within main land China? Macau is a protectorate that is distasteful to the Chinese. They will look for ways to bring it back into the fold.

If you do not believe the above just have a chat with Meyer Lansky about how the mob lost the casino’s in Havana. You always need the protection of the state to survive in this business.