Las Vegas Sands Is Ready to Explode

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Macau's gaming revenue is growing at an astonishing clip, helping every company that operates a casino in China's gambling haven. But the government limits casino expansion and only one casino is set to open in the next two years, meaning more for current operators. Once that one casino adds to Las Vegas Sands' (NYS: LVS) share on the growing Cotai Strip, it could be boom time for the world's most valuable gaming company.

Overall, Macau's gaming revenues are up 57% in August and have climbed 46.8% so far in 2011. That helped Las Vegas Sands push revenue 26.6% higher at The Venetian Macau during the second quarter. The numbers would have been higher, but Galaxy Macau opened, taking a little market share from competitors like Melco Crown's (NAS: MPEL) City of Dreams.

Once Las Vegas Sands finishes Sands Cotai Central (I'm still uninspired by the name) next year, the numbers could get even better. There aren't any new developments with table games on the schedule for a few years. And the timelines of resorts from MGM Resorts (NYS: MGM) and Wynn Resorts (NAS: WYNN) are soft at best.

So that leaves a major opportunity for Las Vegas Sands to take more share in Macau with their four existing resorts.

Don't forget about Singapore
If Macau wasn't enough, Las Vegas Sands has stacks upon stacks of cash piling up at Marina Bay Sands as well. It's hard to get a handle on the casino's growth rate this early in the game, but with $405.4 million in property EBITDA and a 55% EBITDA margin in the second quarter, things are going well.

And competition will be limited to Resorts World Sentosa until at least 2017 because of an exclusive gaming license.

Foolish bottom line
Shares of Las Vegas Sands are currently trading at a 13.4 EBITDA/enterprise value multiple, in the same range as Wynn Resorts and Melco Crown. But neither of those companies have resorts opening soon, and with Sands Cotai Central and a growing market in Singapore, this should help Las Vegas Sands remain on top.

I think shares are going to get a bump as the company takes share in Macau and starts to shed debt. This is still the best stock in gaming.

Interested in reading more about Las Vegas Sands?Click hereto add it toMy Watchlist, which will find all of our Foolish analysis on this stock.

At the time this article was published Fool contributorTravis Hoiumdoes not have a position in any company mentioned. You can follow Travis on Twitter at@FlushDrawFool, check out hispersonal stock holdingsor follow his CAPS picks atTMFFlushDraw. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

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