Okay, it’s time for my third annual “Why I want to own a Casino” post. We’re going to pick Las Vegas Sands (Venetian LV/Macau, Sands Macau and coming soon Singapore) for fun this time. Sometimes talking about mind boggling numbers is fun. These numbers come right from the 10K so it’s just a matter of interpreting what you read.
The revenue for The Sands Casinos is primarily Las Vegas (US$1,335,032,000) and the Macau properties (US$2.9 billion dollars) so you can see all the press is true. Macau is dusting Las Vegas. Despite all this the Sands company lost $163 million dollars — but it’s not as bad as it sounds because they had a half BILLION dollars in interest expense related to the Macau construction and Palazzo in Vegas plus another half BILLION dollars in depreciation expense. This company isn’t on the ropes by any standards.
Casino revenue: $3.1 billion dollars against expenses of $2.2 billion dollars. That means people lost nearly a BILLION dollars gambling. An average return of about 33% — that’s a hell of a vig. Rooms were $767 million against expenses of 154 million. Dining was $369 million against $186 million. There’s some minor stuff too, but you’re looking at insanely profitable operations. And these figures are all UP for the year 2008 over 2007. They don’t disclose comp expenses directly, but we can extrapolate them at about $12.7 million dollars, and they have a “doubtful accounts provision” of $41 million which is nearly double 2007. Still $41 million is nothing against the revenue figures.
So, yeah, I want in this business. The barriers to entry are phenomenal and I don’t see it happening. But CMOT Casino Group would be awesome. I’d name parts of the casinos after all my investors, so if you can get me about two billion dollars, I can return your investment quickly and almost guaranteed. You all know me and know I’d run a great casino. Honestly, I think I could finance one with about half of that in hand. Only a fool wouldn’t throw their money my way. We’re talking CMOT Towers in Macau, CMOT Palace in Vegas, and one day expansion to England when they approve them (CMOT Mews) and perhaps Atlantic City (CMOT Shores) but I don’t see that as a good market. I’d cater to the mid-level crowd (the group that goes to the MGM, Paris, NY/NY) and not the high-end (Bellagio, Venetian, Wynn) or low end (Circus-Circus, and whatnot).
In other news, a special shout-out to Evan for being a better friend than I’d have ever imagined. Thanks to him. He got major, enormous brownie points today. Also, Evan, you can get that Mickey Mouse silverware at Disney Village. Seriously. I can’t imagine you didn’t guess that.
And I got to meet John’s parents today at breakfast. I think they appreciated my biting wit and weren’t too scared. The service at Bistro555 really sucks bad. At least it’s cheap and the food is good. After, we (Evan, Liz, John, and me) went skating. Skating was okay but it was very foggy due to failure of dehumidifiers. Liz posted a photo on her Facebook page.
I got a Keurig K-Cup system from Hermina and today I bought some random items for it. The coffee is good, but the hot chocolate is weak. Next up, I must try the tea. I highly recommend this. I cannot wait to let my friends try the stuff. Queen has lost their new front-man. Paul Rodgers who replaced the irreplaceable Freddie Mercury has returned to Bad Company. That leaves Queen in search of a new lead singer. As you know they were on American Idol a few days ago for the season finale. They are considering the runner up (Adam Lambert who should have won and did a bang up job performing with Queen) according many news reports. I think it would be awesome.