Morningstar

2 Winning Bets Among Casino Operators

2 Winning Bets Among Casino Operators
Securities In This Article
MGM Resorts International
(MGM)
Las Vegas Sands Corp
(LVS)

Dan Wasiolek: While Las Vegas and Macau are currently the world's two largest gaming destinations, we believe a rising sun will shine bright on Japan as it stands to become the third largest gaming region after the island nation authorized gambling last year.

We expect Japan to open four integrated resorts in 2024 that combined stand to generate $21 billion in annual sales with solid high-teens return on invested capital.

Given the attractive opportunity, we believe many operators will be interested in these gaming licenses. But our discussions with over 25 professionals involved in the process, lead us to believe that Japanese authorities will place importance on controlling gambling addiction, and therefore will value those operators with experience in constructing and managing gaming resorts in stringent regulatory environments such as the U.S. and Singapore. As a result, we see narrow-moat company Las Vegas Sands, with its leading share in Singapore, and no-moat MGM Resorts, with its dominant presence in Las Vegas, as lead candidates to be awarded Japanese gaming licenses in 2019. Thus, we model both companies to collaborate with Japanese local partners in developing world destination resorts that open to the public in 2024.

Investors should have both companies on their radars. Las Vegas Sands is fairly valued, while MGM Resorts is slightly undervalued.

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About the Author

Dan Wasiolek

Senior Equity Analyst
More from Author

Dan Wasiolek is a senior equity analyst, AM Consumer, for Morningstar*. He covers gaming, lodging, and online travel. Names covered within the gaming industry are Wynn Resorts, Las Vegas Sands, MGM Resorts, Caesars Entertainment, Penn Entertainment, and DraftKings. In the hotel industry Dan covers Marriott, Hilton, InterContinental, Hyatt, Wyndham, Choice, and Accor. Other travel related names under his coverage are Booking Holdings, Expedia, Airbnb, Tripadvisor, Sabre, and Amadeus.

Before joining Morningstar in 2014, Wasiolek spent 16 years as an analyst and portfolio manager covering US mid- and large-cap strategies for Driehaus Capital Management. During the first half of his time at Driehaus, Dan’s responsibilities as an analyst included analyzing and recommending stocks across all sectors and industries for inclusive in the portfolios. Then in the second half of his tenure at Driehaus, Dan was responsible for stock selection and portfolio management of the US mid- and large-cap strategies, as well as co-managing in-house smaller-cap portfolios.

Wasiolek holds a bachelor’s degree in business administration from Illinois Wesleyan University and a master’s degree in business administration, with a concentration in finance, from the DePaul University Kellstadt School of Business.

* Morningstar Research Services LLC (“Morningstar”) is a wholly owned subsidiary of Morningstar, Inc

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