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Inside Gaming: Casinos Follow Flow of Money to Asia

6 February 2006

Gaming interest in overseas investments is far from unique. Instead, companies are joining a crowd driven by a weakening dollar and economic recovery in Asia and Europe. New York bankers say U.S. affiliate income should double in 2006, with income expected to top $240 billion. The bulk comes from goods and services originating overseas, such as U.S. casinos and hotels, rather than American manufacturing. Still, the dollar is expected to resume its slide this year, so the companies involved will have to carefully hedge their currency risks.

Asian casinos are on a roll. Their gross revenues are expected to hit $13 billion this year, up 20 percent from 2005, a report by Globalysis, a Las Vegas-based firm that tracks Asia's casino gaming markets, says. The report attributed the increase largely to new casinos in Macau. The biggest jump in revenue, an estimated $4 billion, is expected in the fourth quarter of 2006, mostly because of the planned opening of the Wynn Macau casino in September. Otherwise, South Korea is the big winner, with three new casinos opening to compete with Macau gaming operations and lure upper-tier Japanese customers.

Industry insiders say Macau casino revenue and visitor numbers each increased 12 percent in 2005, but were down from 40 percent gains in 2004. They say Las Vegas Sands Corp. accounts for three-quarters of the growth, showing the impact of high-quality, new casinos on the market. Las Vegas Sands has taken over 15 percent of the market. Sources say that is just the beginning of what the company is likely to accomplish as it continues to develop the Cotai Strip in the former Portuguese colony off the coast of China.

The advertisements read "Vegas Fixer Upper," but it's not really. Still, for $25 million, a buyer can move in to one of the most renowned private estates in Las Vegas, with its own stable of exotic wildlife. The home is next to the 18th hole at the Shadow Creek golf course in North Las Vegas and was for years the home of casino developer Steve Wynn. The 12,162-square-foot mansion, one of only two houses on the golf course, has four bedrooms and sits on 4.6 acres. Wynn now lives in a Fairway Villa at his new Wynn Las Vegas hotel-casino.

Meanwhile, Kirk Kerkorian, the 88-year-old majority shareholder in MGM Mirage, has put his 8,400-square-foot Mediterranean-style mansion in Beverly Hills, Calif., on the market, also for $25 million. The mansion, built in 1986, is said to be perfect for a couple. It has two tennis courts, two pools and two guest houses. The 30-acre property is in the right market, where 41 homes sold for $10 million or more in 2005, up from 25 the year before.

Gaming Wire Editor Rod Smith can be reached by e-mail at rsmith@reviewjournal. com or by phone at 477-3893.

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