Looking for a Break from a Stressful World, Steve Wynn Doubles Down in Vegas


No one in the gaming industry is as entertaining as Steve Wynn.   He may fly below the radar for short periods of time, but then he bursts out with an announcement of something startlingly new and different.  Just when it seems Wynn has his hands full with his ex-wife, building a casino in Boston and construction delays in Macau, Steve surprises us again.  Wynn is going to build a new resort in Las Vegas with the working title Wynn Paradise Park.  In characteristic style, Steve says it will be the greatest project he has ever built, and of course that means better than any casino resort in the world.  Wynn is taking his golf course and turning it into a wonderland.

Almost giddy with excitement, Wynn compared the project to Disneyland, better and more fun than anything he has done in his 45-year career.  In fact, it is so good that he challenged outsiders to find faults in the plan because he and his staff can find none. It is vintage Wynn; it is what we have grown to expect from him and it is why investors put money into Wynn Resorts.  For investors, casual observers, competitors and citizens of Las Vegas, Steve Wynn is like a high speed roller coaster ride – a very exciting experience.

“Just like Disney,” said Wynn. The proposed project is the first major construction Wynn has undertaken in his home city since Encore Las Vegas opened there in 2008. The new resort, which will feature 1,000 hotel rooms, could cost as much as $1.6 billion, said Wynn. “This is the most fun project in my 45 years,” Wynn told investors. “Somebody take the other side, tell me what’s wrong with this idea? We’ve all drunk the Kool-Aid.” Christopher Palmeri, Bloomberg, 4-7-16

The expectation of his magic affects the way everyone thinks about anything Wynn.  That is true even in Macau.  Morgan Stanley has recently upgraded projections because of the “aspirational” effect; the company may have meant “inspirational.”  However, it might have been saying his casinos cause people to aspire to something outside of their normal, everyday lives.  Wynn caught a lot of flack over the way he expressed that aspiration.  He famously said, “Rich people only like being around rich people.  Nobody likes being around poor people, especially poor people.” Maybe that is his secret; he lets people feel rich and hides their poor selves when they are immersed in the Wynn luxury.

Morgan Stanley said it was making its revised estimates on the basis that Wynn Palace would be “an aspirational casino for gamblers and could take share from peers.” Macau’s casino industry faces a risk of overcapacity, as it is expected approximately 750 new live gaming tables are to enter the market over the next 12 months, says Morgan Stanley.  Gross Gaming Revenue Asia, 4-12-16

Wynn Palace is big news in Las Vegas and on Wall Street; it promises more visitors for Las Vegas and bigger revenues and higher stock prices of Wynn Resorts.  Although, there some cynics that question Wynn’s timing; “Why did he make the announcement now?” they ask.  Is he trying to take the spotlight away from the War of Roses between himself and his former wife, Elaine, over voting rights of her stock?  Does he want Wall Street to focus on the long-term future and ignore the expensive delays and questionable future of Wynn’s casino projects in Boston and Macau?

Those are big issues, by controlling his ex-wife’s shares for voting purposes, he maintains his position as the largest stockholder.  Without Elaine Wynn’s shares, Steve could lose his ability to control the company.  Even if Morgan Stanley has absolute confidence in Steve in Macau, there are significant challenges; Macau’s gaming revenue continues its double digit declines.  At the same time, market capacities continue to grow.  In the next year, 6000 new rooms and nearly one thousand table games will be added to the market.  Wynn Palace is part of that expansion.  The project has been delayed four times.  Although an August opening is predicted, Steve still does not know how many tables he will be allottedTo add to his woes, Massachusetts has proven to be much more difficult than Wynn or anyone else thought.  At best, Wynn will not open before 2018 and 2020 is looking more realistic.

I think these are all reasons behind the new project in Las Vegas.  Steve Wynn in 74 years old; in 2020 he will be nearly 80.  The dynamic days of his forties are all in the real view mirror.  Now, even when he finds a great opportunity, such as Philadelphia, Boston or Macau, they come with endless problems.  Las Vegas has always been warm, welcoming and accommodating for Steve Wynn.  He cannot turn back the clock with a new Strip project, but he can escape the hassles, lawsuits, delays and uncertainties of the world outside of Las Vegas.

 

 

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1 Response to “Looking for a Break from a Stressful World, Steve Wynn Doubles Down in Vegas”


  1. 1 Lynne B Rosner April 13, 2016 at 3:22 pm

    Nobody knows how to file a lawsuit against Wynn in Nevada?


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