This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

MGM Gambles on a Northeast Gaming Corridor

By Brian Egger of BreakingCall.com

NEW YORK ( TheStreet) -- In recent years, the compass of global gaming resort development has been pointing in the direction of China's Special Administrative Region of Macau.

While MGM Resorts International (MGM - Get Report) is less exposed to that Far Eastern gaming enclave than its key Las Vegas rivals Las Vegas Sands (LVS) and Wynn Resorts (WYNN), MGM recently generated about one-third of its earnings before interest, taxes, depreciation and amortization from Macau. That exposure is expected to grow as the 2016 opening for MGM Cotai draws closer.

Investors have focused on MGM's gaming opportunities in Asia, but the prominence of Macau as a destination has drawn attention away from some exciting development prospects on U.S. soil. Those domestic opportunities received little mention on MGM's quarterly earnings conference call Tuesday.

In June 2012, MGM and privately held Peterson Companies agreed to develop an $800 million casino-resort at National Harbor, across the Potomac from Alexandria, Via.

Later that year, in August, MGM unveiled plans for a project of similar budget dimensions in Springfield, Mass. With both proposals held in abeyance ahead of licensing and other hurdles, company observers eagerly await the outcome of MGM's efforts to establish a U.S, gaming "northeast corridor."

While the promise of these projects is considerable, investors should be prepared to extend their wait into 2014, as local political processes play out.

Although the two proposed casino sites are located some 370 miles apart, the situations in Massachusetts and Maryland bear similarities. Massachusetts's 2011 gaming statute authorized up to one casino-resort to be built in each of three regions of the Bay State (i.e., eastern, western and southeastern), as well as one slots-only facility.

MGM is one of three entities vying for the state's western region casino-resort license, for which detailed proposals are due by December of this year. Last month, MGM's plans were approved by voters in Springfield. That referendum paved the way for MGM to face off against Hard Rock in West Springfield and the Mohegan Tribal Gaming Authority in Palmer.

Just south of the Mason-Dixon Line, a similar political drama is unfolding. MGM's National Harbor plan is one of three in contention for a casino license in Maryland's Prince George's County.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
MGM $20.26 1.96%
AAPL $112.34 4.29%
FB $89.89 3.05%
GOOG $614.34 2.77%
TSLA $247.69 3.80%

Markets

Chart of I:DJI
DOW 16,351.38 +293.03 1.82%
S&P 500 1,948.86 +35.01 1.83%
NASDAQ 4,749.9790 +113.8740 2.46%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs