Steven the Wizard of Oz Wynn

Wherever he goes and whatever he does, Steven Wynn attracts attention.  Of course, the main reason people are interested in the comings and goings of Wynn are his casinos.  Any time a new Wynn casino opens it is international news.  It is news because a Wynn casino means features and concepts that are unique to the industry; a new Wynn casino is a game changer.  Besides the realities of Wynn’s creativity, people are intrigued by Steve because of the mythology; Steve Wynn is the Wizard of Oz for the gaming industry.  According to legend and myth, Wynn gives cowardly lions courage, scarecrows brains, tin woodsmen hearts and he can even get Dorothy back to Kansas .   Whatever the problem a casino jurisdiction faces, Steve Wynn, the magician, the wizard is the answer.  Any city with casinos that are struggling at some point dreams the Wynn dream.  “If only Steve Wynn were to come to town.”  “Steve could fix things; he would bring excitement, hordes of people and wealth to our city.”  “Oh, please Steve, won’t you bring your magic to our town?”

That is the wishful, sentimental and emotional view generally held by people desperate for a solution, a turnaround and an economic miracle.  There is another Wynn as the Wizard of Oz group of believers, the analysts.  The industry analysts are far more analytic, reasoning and objective that the dreamers.  To them Wynn is a practical solution, after careful reasoning and scientifically applied metrics they find the perfect opportunity for Wynn’s skill set.  It is a question of the “right price” and the “right timing” for a Wynn investment in their analysis.

The first group produces pleasant dreams and the second group produces rumors.  “Wynn was seen in town.” “Wynn met with Trump.” “Wynn’s team is studying the issue.”  Atlantic City has long been nursing a Wynn dream.  As soon as he left town and built the Mirage it started.  Everyone from regulators to mayors and dealers to boardwalk vendors realized that when they lost Steve Wynn they really lost something very important, imagination.

When Wynn sold the Golden Nugget to Bally’s in 1987 for $440 million, he said he would not be back until there were major changes in the way gaming was regulated in Atlantic City.  And over the years, he has reiterated that statement.  Still, there have been periodic rumors Wynn was coming back to town and buying…  You can fill in the blank with the names of most of the casinos in Atlantic City.  Lately, there have been a couple of new rumors:  “Is Steve Wynn going to take over Revel?”  “Will Wynn  buy the Atlantic Club?” “After all, the Atlantic Club is the original Golden Nugget with another name; wouldn’t that be ironic if Wynn bought it back for 1/20 of $440 million he got 26 years ago?”

The latest round of rumors started for the unusual reasons:  “Only the Wizard could fix the problems.”  “This is the perfect time for the Wizard to work his magic.” However, now there is new and unique reason for the rumor.  Wynn’s company filed for an internet gaming license in New Jersey.  The law states that anyone wishing to operate an online casino in the state must be licensed and have a bricks and mortar casino in Atlantic City.  It is possible that Steve Wynn has changed his mind about Atlantic City. He may be ready to return to boardwalk.  Atlantic City observers are looking skyward hoping to see Wynn’s hot air balloon falling out of the sky.

However, it is also possible that the balloon is hovering over another place.  It is possible that Wynn has another plan.  Actually, we know he has another plan, two other plans in fact.  Wynn is vying for a license in Pennsylvania to operate a casino in Philadelphia.  Philadelphia is in the midst of Atlantic City’s traditional casino base.  It would be an ideal place to build a casino that captured that market without the regulatory costs and restrictions of Atlantic City.  Wynn’s second plan is a casino in Boston.  He is a bidder for a Massachusetts license.  Boston is also located in a much more desirable location than Atlantic City.  The regulatory costs and restrictions are another issue completely; Massachusetts is going to be a costly place to operate a casino.  But going to a Massachusetts would not require backtracking on a position on New Jersey regulation that Steve Wynn has taken very publicly for the last 25 years.

I suspect that when the Wynn team is brainstorming and imaging an ideal outcome on the eastern seaboard that a Wynn casino in Philadelphia and a Wynn casino in Boston would be as good as it gets.  With casinos in both Boston and Philadelphia, Atlantic City would have very little value for Wynn Resorts.  At this point in the 21st century, Atlantic City has become a limited and regional destination.  Wynn builds casinos that are major national and international destination resorts.  Wynn properties are not suited to the Atlantic City market of 2013.  That leaves only the online gaming in New Jersey with any real value for the company.

So how can Steven-the-Wizard-of-Oz-Wynn do all three of those things at once?  How can he build a billion-dollar casino in Philadelphia, a billion-dollar casino in Boston and take advantage of New Jersey law permitting online gaming?  I have no idea, I was never allowed behind the curtain.  Although I was in the boardroom once when he was fantasizing about building a better-than-Disney Indian casino near Seattle.  It was thing to behold. He sat on the table, walked on the table and danced on the table.  Steve painted magical pictures for my clients, an Indian tribe.  He told stories of high finance and high rollers, he was spellbinding.  And then he handed over to an underling and left the room.  We had been granted an audience with Oz the Mighty, Oz the Powerful, but we did not get a glimpse behind the curtain.

How odd would it be if Steve Wynn were to buy the Atlantic Club in Atlantic City in order to gain a foothold in New Jersey’s highly anticipated Internet gaming market? It’s not like he’s unfamiliar with the building.  Wynn built the Boardwalk’s southernmost hotel-casino, which opened as the Golden Nugget Atlantic City in 1980, and he sold it for $440 million in 1987.  Since then, the property has had six different ownership groups and six different names. The parent company of online gaming giant PokerStars wanted to buy the aging 800-room property for $15 million. That deal fell apart in May.  This brings us back to Wynn, the chairman of Wynn Resorts Ltd. A Wynn subsidiary quietly applied for one of New Jersey’s interactive licenses. The Press of Atlantic City found out about the paperwork, one of dozens of applications submitted by multiple companies.  Howard Stutz, Las Vegas Review-Journal, 9-2-13

The differences between Wynn Philadelphia and the five other groups jousting for Philadelphia’s remaining casino license boils down to where their customers would come from, how they would get to the casino, and what they would do when they arrive, said Dan Keating, head of the company that is Wynn’s project manager. Keating’s company has built 26 casinos around the country in the past 20 years, including SugarHouse Casino …Keating said Wynn properties generate more money from non-gaming activities than from gaming. And Philadelphia would be no different. “Wynn is the big dog,” Keating said. “He is not going to be a local or regional casino, but will bring people from afar. He doesn’t do Wynn Lite.”  Kellie Patrick Gates, Philadelphia Inquirer, 9-2-13

The state Gaming Commission is about to wade into a casino dispute between Boston and the smaller neighboring city of Everett.  At issue is whether Las Vegas casino developer Steve Wynn must reach a host community agreement with Boston before he can seek a license from the commission, which plans to discuss the matter at its meeting on Wednesday.  Wynn has proposed a resort casino complex on a site along the Mystic River in Everett. But Boston officials suggest that a small portion of the site is actually located in their city – thus qualifying Boston as a second host community.  Everett officials fear that Mayor Thomas Menino could simply refuse to negotiate with Wynn because the mayor backs a competing casino proposal at Suffolk Downs in East Boston. Associated Press, 9-2-13


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