Wynn puts focus on gaming ahead of Macau IPO

This would be Hong Kong's second-largest IPO so far this year, behind Metallurgical Corp of China's us$ 2.34 billion Hong Kong offering. Wynn is pricing its 1.25 billion shares in the us$1.09-us$ 1.30 range, according to its prospectus.

Wynn Resorts, the world's third-largest casino operator by market value, said that it does not expect new casinos set to open in Singapore to be a threat to its Asia business. Since opening its first Macau property three years ago, Wynn has nearly doubled its casino space there, and now offers 19,045 sqm of slot machines, baccarat, roulette and other table games, up from an original 10,219 sqm.

The IPO - which may be the fourth-largest in the world this year - comes on the back of record monthly gaming revenues in Macau in August, and news that China has quietly eased restrictions on its citizens travelling from Guangdong province to Macau, signaling a faster-than-expected recovery in the world's largest gambling market.

A restaurant and even a production kitchen were sidelined to make way for casino space, feeding hungry customers, mostly from mainland China. Even now, Wynn Macau is converting a 600-seat theater that never played host to regular shows for other uses, including slot machines and VIP gaming.

"The Chinese don't care about the rooms and food," said Gabriel Chan, an analyst at Credit Suisse. "Most casinos just provide instant noodles and abalone. The Chinese don't walk away from the table to eat or go back to their rooms."

Wynn declined to comment directly on the phenomenon. But the numbers speak for themselves: A whopping 90 % of Wynn's Macau revenue comes from gambling, versus closer to a 50-50 split for its Las Vegas properties, which also draw heavy revenue from their hotels, restaurants, shows and shops.

Mainland China supplies about 65 % of Macau's visitors, many of them repeat customers. China's clampdown on the frequency of such visits last year - amid concerns over excessive gambling by its citizens - sent chills through the local gaming market, which has surpassed the Las Vegas Strip as the world's largest.

But a recent relaxation of those restrictions has helped business recover for Wynn and other major operators, including Galaxy Entertainment and Melco Crown, whose casinos and rooms are expected to host to throngs of gamblers during China's weeklong October 1 National Day holiday.

"Gaming is one of many options in Vegas. But in Macau, people definitely want to go there for gaming," said Chan. "In Vegas, most people stay for about four days and it's hard to spend four days in a row gaming. In Macau, 50 % of visitors are day-trippers."