Steve Wynn
Billionaire Steve Wynn finally feels confident enough to set an opening date for his second casino in Macau, months after complaining that uncertainty plagued the Chinese city amid a gambling downturn.
Wynn Palace resort will open March 25 next year along the Cotai Strip in the world’s largest gambling hub, Wynn Resorts Ltd. chairman and founder said Wednesday, after the casino operator’s Hong Kong-listed unit reported earnings slumped 44 percent in the second quarter.
“We’re pretty sanguine at the moment, although anything is subject to change,” the 73-year-
old Wynn said in a conference call. “The government happily gave us 100 percent of our last and final request for construction labor.”
The casino tycoon in April called for clarity from Macau’s government on its plans for the gambling industry, and on the number of workers he could get to finish building Wynn Palace. The city’s casino operators are struggling with a yearlong downturn after China’s crackdown on graft hurt gambling by high rollers, with June casino revenue plunging 36 percent.
Operators are betting new resorts in Macau would pull them out of the doldrums by integrating more attractions to lure Chinese tourists. Melco Crown Entertainment Ltd., a joint venture between billionaires Lawrence Ho and James Packer, will announce an opening date for its new project Monday.
Wynn Macau Ltd.’s adjusted property earnings before interest, taxes, depreciation and amortization fell to USD173.4 million in the second quarter, in line with a median estimate of $173.5 million from six analysts surveyed by Bloomberg.
The parent, which relies on Macau for about 60 percent of revenue, reported a 72 percent drop in second quarter net income to $56.5 million as betting fell in both the Chinese city and Las Vegas. Wynn Macau shares fell 1.5 percent to HK$15.46 as of the mid-day break in Hong Kong trading.
The announcement of Wynn Palace’s opening date is “another small positive for the group,” said Tim Craighead, a Bloomberg Intelligence analyst. “This may be an indication that some of the policy challenges are starting to soften.”
Macau’s government relaxed visa rules for Chinese nationals last month allowing them to stay in the territory longer and more frequently. The government is also considering whether to ease smoking restrictions on gambling floors.
“We don’t expect the market to show any signs of momentum until we get a few new properties opened,” Aaron Fischer, an analyst at CLSA Ltd., said in a note yesterday. “We believe the focus should be on getting Wynn Palace opened on time” with less focus on the VIPs and more on tourist attractions.
The company has seen a very rich stream of customers in the business class of the mass segment after the easing of travel restrictions, Wynn Macau Executive Director Ian Coughlan said on the conference call.
Still, Wynn the founder sounded a note of caution on Macau. “Macau continues to be more of a question than a certainty as we head through 2015 and toward our opening,” he said. Stephanie Wong, Bloomberg
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