All-in, we expected a messy quarter, and results came in slightly above our expectations. |
As has been anticipated, the property impressed and easily exceeded even our lofty expectations. |
As we've repeatedly said, this is the type of announcement that is reflective of the strength of MGM Mirage management and its ability to find strategic opportunities globally when investors are least expecting it. |
Broadly speaking, there is limited tourism in the French Quarter, as opposed to the population in the suburbs. It's encouraging for the local economy and I think they'll do a good business with construction workers. |
Conversations with Strip operators indicate that business volumes over New Year's Eve in Las Vegas were up significantly year over year. Additionally, we believe expectations for the fourth quarter on the whole are low and operators could exceed them. |
Despite the phenomenal growth of Las Vegas, the construction talent pool is not deep enough to provide the needed labor to build all currently announced projects. We believe if all announced and anticipated projects were to proceed before the end of the decade, a significant portion would not get off the ground given the limited depth of the construction talent pool, most importantly subcontractors. |
Despite this slow start to the fourth quarter, we believe fundamentals on the Las Vegas Strip remain solid for the balance of the quarter and into 2006 .... |
earnings could be messy over the near term and possibly impacted for the next 12 (months) to 24 months. |
Following channel checks with the Las Vegas Strip operators over the last two weeks, we remain encouraged that the overall volume of high-end gaming play improved over last year. The MGM-Mirage properties and Caesars Palace appear to have played lucky for the holiday period while Wynn Las Vegas' hold may have been soft over the New Year's week, but should be normal for the quarter. |
I don't know how they will get these companies to invest millions into these projects unless they are allowed to build them on land. They would not only protect the assets of the casino companies, but land-based casinos could benefit the market greatly. |
I have a hard time believing they would turn away if the project were to come in at, say $1.3 billion. |
I think every major casino company wants to get into online gaming but without access to the U.S. market it becomes a costly venture. |
If Lake Charles avoids a direct hit, devastation to the primary feeder market could have a negative impact as coverage from business interruption insurance is not certain. |
In all likelihood, operators will start getting business interruption insurance in the fourth quarter, which would add upside to our forecasts. |
Investors may be caught a little bit off guard by the price tag. |