COMPANIES ARE EXPANING HOLDINGS IN MACAU

Implications: This is certainly not a concept that is hard to understand. Expansion where the profit picture is beyond what was expected leads to more of the same. In this case, Wynn Resorts, Venetian (Sands) and MGM are planning new properties. Some are already under way. Makes good business sense - hard to look at this move with a jaded eye. The financial impact for these companies are enormous for the side of the ledger that shows figures in the black...

Analysis: Nevada residents think that the only place to go for gaming, food and beverage, retail and entertainment is right here in Las Vegas. My thoughts are simply, it may be true for the continental U.S., but a bit of a stretch if you take in Macau. The financial facts are that Macau will probably make history by eclipsing the Las Vegas market in 2007. It's not by any strange chance - it's a matter of how the gaming markets differ. Macau has an extremely high density of constant players - there is no down time - no softening of the market due to whatever - it just goes on and on, as it has for more years than we can count. Many of those years were in the hands of Stanley Ho, who had a strangle hold on Macau gaming. Mr. Ho still has his properties and loyal customers - even he has felt the pressure to upgrade to keep the competition from running him over. It does not matter anymore where the properties are located - the guests, players, and general walk-in customers want the best the area has to offer. Try to get away with not keeping up and event the most loyal customers will move on - you can't blame them. It's the nature of this dynamic business.

MGM has seen fit to partner up with Pansy Ho, daughter of Stanley Ho. She holds in her possession a subconcession that allows her to open a new property on the Cotai Strip. It will actually make a good marriage as MGM wants representation in Macau and Miss Ho wants the financial support that MGM can give. There was some question that came up with Nevada Gaming Commission as to the business relationship between Pansy Ho and her father Stanley. I think that has been resolved and MGM has the go ahead to continue their plans.

Macau is a unique and very lucrative area - it has bolstered the bottom line for both Sands Group and Wynn Resorts. The only limitations in this area will be how much land is left to build new resorts on. It's my opinion that the government will try and hold licences down, but be assured that is just a formula to keep control over who wants to join in on the fray.

It will be interesting...