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Steve Wynn Welcomes Competitors’ Entries

Posted on May 23rd, 2011

With a “the more, the merrier” attitude, Steve Wynn, the Chairman and CEO of Wynn Resorts Ltd and Wynn Macau Ltd, welcomed the addition of the newly-inaugurated $2 billion, 550,000 sq. m. Galaxy Macau, the latest casino-resort complex on the Cotai Strip. He feels that the launch of the new establishment will only serve to increase overall gambling revenue in what is now the world’s largest gambling market. Born Steven Alan Weinberg, Steve Wynn is the 512th richest man in the world with a net worth of $2.3 billion. He is known as the man who was responsible for leading the revival and expansion of the Las Vegas Strip in the 1990’s. His companies built or renovated some of the most well-known names in Las Vegas, like the Golden Nugget, The Mirage, Treasure Island, Bellagio, Wynn and Encore. In 2006, Time Magazine included Wynn in its list as one of the World’s 100 Most Influential People. Later in the same year, he was inducted into the American Gaming Association Hall of Fame.

As a Special Administrative Region of the People’s Republic of China, Macau is the only place in China where gambling is legal. Since its handover by Portugal, Macau has seen a rapid and steady growth in its gambling industry and is now the largest in the world in terms of revenue. In the first four months of 2011, gaming revenue in Macau reached $10 billion, as much as Las Vegas made in the entire year 2010. Wynn Resorts was awarded one of the three licenses to operate a gambling establishment in the SAR. The other two are Sands China Ltd of billionaire Sheldon Adelson and MGM Resorts International. Located on the Macau peninsula, Wynn Macau was the first Las Vegas-style casino-resort in Asia. Opened in September 2006, Wynn Macau has 600 hotel rooms and suites, five restaurants, 2,400 sq. m. of retail space, and 2,000 sq. m. of convention facilities. The casino gaming area is 19,000 sq. m. with over 200 table games and 375 slot machines.

In April 2010, Wynn Encore Macau opened with 414 suites and villas, gaming facilities, 2 restaurants, 1 bar, 3 retail establishments hosting Cartier, Chanel and Piaget stores, and a spa with eight private therapy suites. Of the Encore Macau, Steve Wynn says, “the loveliest hotel in the world is not in London, Paris, Tokyo, New York or San Francisco. It is here in Macau.” This year, Wynn Resorts expects approval by the Macau government of its application to build a resort-casino on the Cotai Strip, which the government hopes will broaden the appeal of Macau from that of a pure gambling hub to a destination for global tourism and recreation. Expected to cost MOP 20 billion, the new establishment will more than double Wynn Resort’s hotel rooms in Macau. Steve Wynn says, “I believe the Cotai project is the best work we have done.” The Venetian of Sands China and Melco Crown’s City of Dreams already operate resort-casinos in Cotai. SJM Holdings Ltd of Stanley Ho and MGM Resorts International are likewise awaiting approval of their applications for land licenses.

The development of the Cotai Strip also involves the thrust of the Macau government to broaden the consumer base of its gambling industry. The government hopes to shift its reliance on the high-rollers to the fast-growing mass market. Wynn pointed out that the perception of Wynn Macau as a facility focusing on the upscale gamblers is belied by its share of the general or mass market. “We just have a lot of VIP business, but we also have the best win per table in the general casino in Macau”, Wynn says.

At an annual general meeting in Macau, Steve Wynn declared that Wynn Resorts was always on the lookout for other opportunities in the region, without naming any specific markets. He said, “We feel that we are an Asian company … we have a capital structure and balance sheet that allows us to go anywhere and do any project of any size easily.” However, while shares in the $17 billion company have jumped almost 130 percent over the last 12 months, they have recently dropped by about 6 percent after investors started cashing in their earnings. This has led analysts to look more positively at shares of SJM and Sands China compared with Wynn Macau.