VIP Baccarat Lights Up Las Vegas Sands' Outlook

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK (TheStreet) -- VIP baccarat tables account for the largest chunk of Las Vegas Sands' (LVS) gaming revenues in Macau.

In 2007-08, the company saw substantial increases in its Macau VIP table game wagers from the opening of Venetian Macau in August 2007 and the Four Seasons Macao in August 2008. We expect this momentum to continue with the scheduled opening of the integrated resort at Parcel 5 & 6 in the Cotai strip region in Spring 2012.

LVS competes with Wynn Resorts(WYNN), MGM Resorts International(MGM), SJM, Galaxy and Harrah's, among others.

While we estimate LVS' Macau VIP table game wagers will increase from $126 billion in 2012 to $232 by the end of our forecast period, Trefis members expect an increase from $140 billion to $270 billion during the same period. The member estimates imply an upside of 5% to 10% to the Trefis price estimate for LVS' stock.

We currently have a Trefis price estimate of $47.90 for Las Vegas Sands's stock, which is in line with the current market price.

VIP Baccarat is gaining popularity in Asia, particularly in China. In 2010, it generated revenues of $16.9 billion, accounting for 72 percent of the casino sector's overall revenue and witnessed a 70 percent yearly increase, according to the official data from the Gaming Inspection and Coordination Bureau.

In the second quarter of 2011, Macau's VIP baccarat revenue increased 50% year on year recording $6 billion, benefiting the leading casino operators. LVS China registered 100% increase y-o-y in net income for the quarter totaling $267 million.

Las Vegas Sands is one of the leading casino companies in the world and has a presence in the U.S., Singapore and Macau. It's scheduled to open the Sands Cotai Central, previously Parcel 5 & 6, in Spring 2012.