THE UPSIDE OF THE CREDIT CRUNCH

We continue to believe that MPEL’s City of Dreams will be the only new casino/hotel to open in 2009. The LVS construction delay on Lots 5 and 6 that came to light this weekend certainly bolster our case. While Galaxy Entertainment hasn’t announced any pushback on the planned 2009 opening of its Cotai Megaresort, I believe that is forthcoming. There is nothing like a trip to Macau to get the full picture. Having guys permanently stationed on the ground there doesn’t hurt either.

Macau supply growth is slowing down. That is good for Macau operators. Despite its inability to pull in the financing, this is good news for LVS as well. They still have their covenant issues in Q4 but one step at a time. WYNN looks to be in the driver seat here. All we need is for Beijing to loosen the reins in visitation and/or the Macau government to tighten the reins on junket commissions. Following my trip to Macau, I believe both will happen.