Shares of Steve Wynn’s Chinese casino operation fell the most in almost a month after allegations the Wynn Macau Ltd. chairman sexually harassed women.
The Macau unit, which accounts for the bulk of Wynn Resorts Ltd.’s revenue, slumped as much as 6.5 percent in Hong Kong yesterday. They traded at HKD28.40, down 5.3 percent, as of 1:41 p.m. On Friday, U.S. parent Wynn Resorts Ltd.’s shares fell 10 percent in New York, the most in 13 months.
Morgan Stanley and Union Gaming Group LLC downgraded their ratings on Wynn Macau stock yesterday, after the Wall Street Journal reported that Wynn – a casino industry stalwart – pressured massage therapists and a former resort manicurist to perform sex acts. The allegations were denied by the Wynn Resorts’ founder.
Wynn assets are “best in class,” but the uncertainty surrounding the harassment allegations and the potential for local regulatory review may push investors away from Wynn Macau and toward rivals Galaxy Entertainment Group Ltd. and Sands China Ltd., Union Gaming analyst Grant Govertsen wrote in a note yesterday. He downgraded Wynn Macau to a hold from buy. Morgan Stanley lowered its rating to equal-weight from overweight previously.
The long-term impact on the stock may be muted, according to Dickie Wong, Hong Kong- based executive director of research at Kingston Securities Ltd. “The company’s overall operation is on a good track,” he said. “Wynn’s scandal is more personal-related. The impact to the whole industry should be limited.”
Before today’s move, shares of Wynn Macau had climbed to an almost 3 1/2-year high as VIPs return to the Chinese gambling enclave. The allegations against Wynn come just days after Wynn Resorts reported better-than-expected quarterly earnings, with a surge in revenue from the Wynn Palace, a casino located on Macau’s Cotai Strip, overshadowing weaker results out of Las Vegas.
While Wynn Resorts is based in Las Vegas, it generates more than 70 percent of its business in Macau, the world’s largest gambling hub. The company said early last week it plans to develop the next phase of the USD4.2 billion Wynn Palace on 4.45 hectares. On a conference call, Steve Wynn expressed optimism the business will be able to continue after the gaming licenses of Macau’s six casino operators start expiring from 2020.
Representatives for Macau’s Gaming Inspection and Coordination Bureau couldn’t be reached over the weekend. Bloomberg
GOP senators: Party should consider returning mone
Two Republican senators say their party should immediately consider returning contributions from casino mogul Steve Wynn in light of sexual harassment allegations against him.
Wynn has been a prolific Republican donor. He led the Republican National Committee’s fundraising efforts during President Donald Trump’s first year, helping the committee rake in more than USD130 million.
Sen. Lindsey Graham of South Carolina tells ABC’s “This Week” on Sunday that the money should be returned if the allegations “have merit.” Republicans previously called on Democrats to return contributions from disgraced Hollywood mogul Harvey Weinstein.
Sen. Susan Collins of Maine tells CNN’s “State of the Union” that Republicans should return the money if they’ve accepted contributions recently that haven’t been spent.
Wynn resigned Saturday as RNC finance chairman after a Wall Street Journal report on allegations made by several women. Carrie Hong, Daniela Wei
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