Motley Fool – Macau’s gaming market is now seven times the size of the Las Vegas Strip and outgrew the Sin City 18.5% to 4.8% in 2013. So, we should at least be pondering if there’s an upper limit to how large the market can grow.
It’s the growth of Macau’s overall market that will really drive Las Vegas Sands, Wynn Resorts, Melco Crown, and MGM Resorts over the next few years. Other than trading market share between one another and the other two concessionaires, SJM and Galaxy, that’s the only way to grow.
First, let’s look at the size of Macau’s gaming revenue compared to China’s GDP, a good proxy for the relative size of Macau’s gaming business. I’ve provided the numbers below along with a comparison to the same figures in the U.S.
The Chinese are known for their gambling, but it’s a bit surprising to see double the gaming revenue as a percentage of GDP versus the U.S. Keep in mind the total market for gaming in the U.S. is about six times the size of the Las Vegas Strip, so gaming in the U.S. is much more than just Las Vegas.
One advantage Macau has over Sin City is that it’s the only place in China where gambling is legal. So, while expanded gaming in Kansas may take away from Las Vegas growth, as China’s economy grows, so will Macau.
