“Reinvesting more in Macau than we made in last ten years”

Wynn is still confident in the secular success story that is Macau despite the recent slowdown in China, Beijing’s new austerity policy, junket scandals, the UnionPay crackdown or investors’ anxiety about the possible deceleration of business in the territory.

In Macau for the General Meeting of Wynn Resorts shareholders and its parent company Wynn Macau, CEO Steve Wynn proclaimed his confidence at a press conference saying: “What we’re reinvesting in Macau is more than we made in the last ten years”. Wynn confirmed that its Cotai resort - the US$ 4 billion Wynn Palace - is on schedule and will be ready for Chinese New Year 2016.

The Wynn CEO reassured reporters that the recent economic slowdown in China and the austerity policy emanating from Beijing are only affecting the group’s retail luxury sales. “Our Macau business in casino and hotels is stronger and will be stronger in the future”, Wynn said. “Only luxury retail sales are softer”, he added without specifying how much.

According to Wynn’s first quarter results, revenues from entertainment and retail grew only 5 percent against 10 percent of total revenues. The company did not disclose Macau’s revenues for retail in its quarterly results.

UnionPay

Regarding the UnionPay terminals ban in casinos reported by South China Morning Post this week, Steve Wynn stressed that the casino operator “has nothing to do with it as we don’t use UnionPay . . . We also weren’t approached by Macau’s authorities related to the issue of illegal transactions and a possible July 1 deadline for a terminal ban”.

Of other scandals affecting Macau in the last few weeks, like junkets, Steve Wynn denied that the majority of junket operators are criminal related: “That idea always existed but junkets have serious business and don’t have time for criminal activities”, he claimed.

Steve Wynn declared that he was not anxious about Macau’s future, saying that the territory could become a major international destination within 5 years when all the infrastructure is built, the Hengqin island project is completed and the new wave of casinos in Cotai are fully operational. But to support this expansion and with Macau living with no unemployment, there will be a need to bring in and hire non-residents to the territory.

Limited Japan

Regarding the long-awaited and much-anticipated new gaming destination of Japan, Steve Wynn declared that if the Tokyo government approves gaming licences, the market will not work freely but with some “limitations”. But even a casino market in Japan is uncertain. “If the study bill is passed before June, it indicates a strong likelihood to go even further; if the bill does not pass this year, that will indicate it is more likely it is not going to happen,” the CEO said.

The casino tycoon also emphasised that he had contacts with the “leading and biggest” Japanese companies for a possible partnership if the gaming licences are issued, without naming any. “We’re absolutely interested and ready to put all our resources into Japan”, Wynn told reporters.

Wynn Macau’s performance in the first quarter trailed that of some of its competition in Macau, like MGM China and Sands China, the two casino operators who recently reported an operating profit increase of 32 and 50 percent, respectively. In the first quarter, Wynn Macau’s operating profit (adjusted property earnings before interest, taxes, depreciation and amortization) climbed 16 percent from a year ago to US$ 384.3 million, beating analysts’ consensus of US$ 367 million. Net revenues (revenues less promotional allowances) increased 14.2 percent, surpassing the billion dollar mark with US$1.132 billion.