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) 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.
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