But if I knew how to manage my portfolio safer and smarter than most hedge fund managers, I could realistically grow my wealth.
Rising Public Debt Is A Threat To Casinos
The increase in US public debt threatens the nation’s economic growth. The country would have to increase taxes. This would decrease personal disposable income.
Improvement in the employment rate could drive demand for leisure activities. An increase in wages could drive consumers’ disposable income. This would benefit casinos.
When inflation is low, consumers have greater purchasing power. They have a higher spending capacity. Greater purchasing power is a positive sign for casino resort companies.
Household spending is rising steadily in the US. This indicates an improvement in disposable household income. The improvement is due to wage growth.
An increase in disposable income boosts consumers’ buying power. It increases the probability that consumers will spend on leisure activities.
In the US, consumer sentiment is tracked by the Consumer Sentiment Index, or CSI. The final reading on the overall CSI was 88.80 in November 2014.
New Jersey allows gambling on casino games and poker. Currently, it dominates the market. It has ~90% of total US online gaming revenue.
Last month, the State of Nevada Gaming Control Board released gaming revenues for October 2014. Revenues declined for the third month in a row.
Baccarat gambling is a high-stake table game. It’s more popular in the Asian markets than in the US. VIP Baccarat represents nearly two-thirds of the gaming revenue in Macau.
In Las Vegas, the lodging market occupancy levels remained well above the US historical norm. The average occupancy in Las Vegas was ~89.2% in October 2014.
US casino operators are considering REIT spin-offs to achieve higher valuations. Real estate is a main income source. REITs distribute at least 90% of their taxable earnings to shareholders.
Casino operators may want to add more non-gaming amenities in 2015. This will strengthen customer spending after a year of slow casino revenues.
According to Macau’s Statistics and Census Service, or DSEC, visitors increased by 11% year-over-year, or YoY, to 2,654,180 in October 2014.
The last three resorts that opened on Macau’s Cotai Strip increased revenue for their operators. This means that Macau’s gaming revenues depend on its supply power.
Macau’s gaming forward EV/ EBITDA multiple has been declining since January 2014. Analysts started to reduce the EBITDA estimates due to key issues in Macau.
Macau’s gaming slowdown may continue into 2015. It’s due to a lack of new resorts. Macau’s casino gambling revenue is expected to keep declining until mid-2015.
Analysts downgraded their 2014 and 2015 estimates for gross gaming revenue. They lowered the target price for casino players with operations in Macau.
Casino gambling is spread across major destinations around the world. Casinos, at major destinations, are being influenced by certain factors. This is hampering industry growth.
Chipotle Mexican Grill (CMG) has given the maximum five-year return on investments of $1,000, which has increased to $13,585.
Chipotle has tasted success in its first restaurant concept, Chipotle Mexican Grill. Now Chipotle is ready to test the waters with two more concepts.