The Smart Way to Get Rich Off Las Vegas Casinos
April 18, 2015
Making money in Las Vegas may not be as hard as it seems. Image owned by The Motley Fool
Place enough bets in a Las Vegas casino, and it's sure to burn a hole in your pocket. The first rule in Las Vegas is, "The house always wins" and every bet in a casino is tilted in the house's favor.
That's why the best bet in Las Vegas isn't in the casino at all; it's on the casino itself. That's right, you can own the house and get paid simply for owning a piece of a casino if you know where to place your bets.
The side of Las Vegas you don't know
All of that cash flowing through a casino everyday has to go somewhere, and in most Las Vegas casinos, it ends up in the hands of Wall Street or investors around the world who own the casino company's shares.
Caesars Entertainment (NASDAQ: CZR ) , MGM Resorts (NYSE: MGM ) , Wynn Resorts (NASDAQ: WYNN ) , and Las Vegas Sands (NYSE: LVS ) combined own almost every major resort in Las Vegas, and they generate billions in revenue from casinos, hotel rooms, restaurants, and entertainment. They're also publicly traded on the stock market.
But like the slot machines and table games in a casino, not all casino companies are created equal. MGM Resorts and Caesars Entertainment lost $150 million and $2.78 billion respectively last year, lowering the odds that you'll ever get your money back. So, when investing in major gaming operators, it's best to stack the odds in your favor with a company that's rolling in cash.
Wynn Las Vegas is by far the most profitable resort in the city. Image source: Wynn Resorts.
While its much larger neighbors in Las Vegas were busy losing money, Wynn Resorts and Las Vegas Sands were busy raking in $732 million and $2.8 billion in profits respectively last year. Not only do they own two of the most profitable resorts in Las Vegas, they are also two of the biggest players in Macau as well -- the Asian market that now generates six times the gaming revenue as the Las Vegas Strip.
And unlike a slot machine, these two companies pay out on a regular basis. These companies tend to pay shareholders every quarter simply for owning the stock.
In Wynn Resort's case, the current dividend is $1.50 per share per quarter, and Las Vegas Sands pays $0.65 per share per quarter. For both stocks, the return is 4.6% in cash per year, better than any savings account or treasury bond you can buy today.
Better odds than betting red
Unless your name is Phil Ivey, the house has an edge in every bet you make in a Las Vegas casino. But you can still make a bet in Las Vegas that has better odds than betting red at the roulette wheel.
Wynn Resorts and Las Vegas Sands are both printing money in the casino (not literally) and if you own shares of their stocks, these companies will likely pay you just for owning part of the casino. It's not a guaranteed winning bet that's without risk, but at least the deck is stacked in your favor instead of the house having the edge.
Owning gaming stocks is really the only smart way to get rich off Las Vegas. So rather than taking a go at keno or trying your hand at blackjack, next time you're in Las Vegas, consider owning the casino as a better betting strategy than any other bet the city can offer. At least the odds will be in your favor, something no table game or slot machine will ever offer you.
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We have all heard of the Internet of Things -- but few appreciate just how it could be about to transform our lives and put THE INTERNET TO SHAME. The Economist calls it “transformative” but you’ll probably just call it “how I made my millions”. Fortunately for investors with the foresight to take advantage of this next explosive revolution, a select few companies are poised to experience massive growth when the internet goes dark. Click here to learn about one stock to own before this massive upheaval takes hold.
We have all heard of the Internet of Things -- but few appreciate just how it could be about to transform our lives and put THE INTERNET TO SHAME. The Economist calls it “transformative” but you’ll probably just call it “how I made my millions”. Fortunately for investors with the foresight to take advantage of this next explosive revolution, a select few companies are poised to experience massive growth when the internet goes dark. Click here to learn about one stock to own before this massive upheaval takes hold.
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