Ongoing disconnect between Las Vegas and Macau seen in damning February numbers from Las Vegas Strip. Lots of excuses but just excuses for failure to solve baccarat business problem.
Baccarat numbers speak volumes but all table games numbers damning too.
Question very simple. Has baccarat business gone east for good? Baccarat business most of gambling business so this question number one for Las Vegas Strip exposed investments.
WYNN and LVS not affected given perfect hedges in Macau. MGM slightly affected with good Macau hedge but its huge exposure to Las Vegas Strip represents long term red flag. CZR at risk given US recession lingering effects on gamblers with only perhaps Korean concession salvation.
Las Vegas management not yet solving baccarat business problem. May not be solvable. But solvency and prosperity of highly leveraged Las Vegas Strip depends on it.
Notice Cosmopolitan adjacent to City Center owned by Deutsche Bank so this specific management may be best positioned to solve baccarat business problem. No investment angle but perhaps Cosmopolitan solving baccarat business problem can guide other casino executives.
Getting baccarat whales and baccarat whale aspirants to come to Las Vegas Strip from Asia seems easy problem on paper. Resolve of risk averse Las Vegas Strip casino executives that had easy time for decades now tested.
Investors need to watch numbers ignore words. Macau baccarat continues rout of Las Vegas Strip and coming of Cotai Strip next big thing. Instead of building colossal ferris wheel Las Vegas Strip needs to solve baccarat business problem with serious commitment.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.