It’s a doubtful honour when gaming sector stocks are picked for their potential by the US$70 million Vice Fund in Texas, which buys alcohol, tobacco and firearms stocks as well as gaming companies. However, the booming Asian economy is set to drive big gains in Asian casino stocks. Last year US gaming shares did well from Asian casino markets - MGM Mirage, Wynn and Las Vegas Sands were amongst those companies reaping the benefits of Macau developments.

With increasing talk of a Chinese investment ‘bubble’ and a brief stock tumble following comments by a legislator who said only 30% of companies listed on the Shanghai Stock Exchange are good for investment by Western standards, some analysts are raising questions about the long-term value of Macau investment. Problems such as rising construction costs, competition and over capacity in the enclave could be further impacted by casino legislation in other Asian countries. The possibility of China naming other gambling locations has also been suggested.

In the short-term it seems that investors are convinced that Asian gaming stocks will not go the way of the tech boom. Genting led the gain last year and saw its share value rise by 54%. All sectors of the gaming industry are expected to see growth in Asia, with the relevant gaming stocks starting to catch up with US gaming stock trading levels. The big names of the gaming world are betting on Macau and two, Genting and Las Vegas Sands, have secured positions in Singapore’s emerging casino market. For the moment anyway Asia would seem the place to put those gambling investment dollars. (E-02.05.07)

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