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Overview: An investor's guide to the casino industry

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Part 2
Overview: An investor's guide to the casino industry PART 2 OF 7

Why the casino industry is rapidly expanding into new markets

Asia’s growth potential

The international gaming industry is growing quickly. It’s expanding to new jurisdictions. Many U.S. commercial casino companies, including Las Vegas Sands (LVS) and Wynn Resorts (WYNN), have helped the industry become an important part of the global economy. They have pursued investment opportunities in emerging foreign markets—especially in Asia. In the past few years, Asian gaming markets have experienced rapid growth.

Why the casino industry is rapidly expanding into new markets

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The charts above shows that Asia Pacific’s share of the global market will surge to 43% in 2014—from 21% in 2009. This trend reflects the fact that current demand in Asian countries overtakes supply. Examples of new territories entering the market include Singapore’s rapid emergence as a casino gaming center. It surged from a standing start in 2010. Its revenues totaled more than $8 billion in 2014.

Macau is the largest and most successful Asian market. It’s often regarded as the “Las Vegas of the East.” The casino industry is expanding in size. However, it also continues to evolve in scope. It provides new entertainment offerings. It has adopted technological innovations. The innovations improve the overall customer experience. They also improve the efficiency of casino operations.

U.S. isn’t behind by much

Recently, Caesar Entertainment (CZR) and MGM Resorts (MGM) announced their plans to expand operations in New York and Las Vegas, respectively. Also, Penn National Gaming (PENN) is looking for possible expansion opportunities in the U.S.

Investors can get exposure to leisure companies by investing in exchange-traded funds (or ETFs) like the VanEck Vectors Gaming (or BJK) and the Consumer Discretionary Select Sector SPDR Fund (XLY).

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