Meltdown

Quote: Steve Wynn OCTOBER 1, 2014

‘We elected man as president who had no experience at anything’. “I’m more scared about the United States than I am about China,” Wynn told CNBC this week at the Global Gaming Expo in Las Vegas. The protests in Hong Kong have “become sort of a party out there.” Wynn said he believes the situation will be resolved: “Everyone in China is pragmatic and practical.”

Quote: Steve Wynn OCTOBER 16, 2015

"In my 45 years of experience, I've never seen anything like {Macau} before". And what he's seeing is what happens when the Chinese government turns its back on your business.

After a 75% crash in profits, Steve Wynn is now facing a complete disaster next year when the next resort in Macau opens. Wynn resorts is currently constructing Wynn Palace, an integrated resort containing a 1,700-room hotel, a performance lake, meeting space, a casino, a spa, retail offerings, and food-and-beverage outlets in the Cotai area of Macau. In July 2013, Wynn signed a $2.6 billion guaranteed maximum price ("GMP") contract for the project’s construction costs. The total project budget, including construction costs, capitalized interest, pre-opening expenses, land costs and financing fees, is approximately $4.1 billion. Wynn expect to open our resort on Cotai in the first half of 2016.

There was a minor $10 drop in room rates, This year the ADR was $317, down from $327 in the 2014 third quarter. Occupancy at Wynn Macau of 95.9% compares to 98.5% in the prior-year period. In Vegas ADR increased 3.0% to $275 from $267.

The Macau Government has denied the request of Galaxy for 400 tables and instead is permitting 150 new gaming tables in its Galaxy Macau Phase II resort. In addition, the operator asked for 444 slot machines but it is understood that there is no decision on this yet.

Las Vegas Sands Corp. announced today that it will release its financial results for the quarter ended September 30, 2015 on Wednesday, October 21, 2015. No word if they are facing a similar situation with their new resort.

Macau is toast. If China has the bad recession
they are all predicting, Wynn is better off
never opening at all. They say it's partly due to
pie in the sky lying about how good the economy
was for years and investors buying into it.
Not unlike a Ponsi, where the bottom has
to eventually fall out. Banks lend and lend
in good faith and make huge loans that
are destined never to be paid back.

I saw a miniature version of this at a garage
a friend owned 40 years ago. He had a ton
of business because he let his customers
run a line of credit. The bank kept loaning
him more and more money to expand
because he had so much business. Then
his wife left him and the lawyers found
he had no profits, just a lot of customers
owing him money. It was all a paper fantasy,
he couldn't call in all the debt to pay his
bills so he declared bankruptcy.

http://wolfstreet.com/2015/08/31/macaus-economy-blows-up/

Quote: Evenbob

Macau is toast.

Well 18 billion patacas is still a lot of money. Vegas is making no where near that amount.

Quote: Evenbob

If China has the bad recession they are all predicting, Wynn is better off never opening at all.

Wynn Las Vegas,is the original US$2.7-billion resort with total gaming space of 111,000 sq ft , a Ferrari/Maserati dealership, Wynn Golf Club which opened on April 28, 2005. Steve Wynn became a billionaire in 2004 (at the age of 62), before the casino opened with a net worth of $1.3 billion. His Net worth is US$ 2.4 billion as of September 2015 , but Elaine Wynn's Net worth is US$ 1.42 billion as of August 2015.

What if Steve Wynn had called it quits and never opened the Encore or expanded into China. Is there something to be said for quitting while you are ahead? Could he end up poor (or at least a mere multimillionaire)?

Wonder what an AC chart from May 26, 1978 to today would look like ?

On a side note, looking for a chart on my own, just found out Atlantic City race track closed in January of this year. DAMN

If Wynn opens in Macau and doesn't get the
business he needs, his debt there will skyrocket
like it did at the Revel. In no time he'll be in
serious trouble. Greed is great, he already has
a casino there, why did he think this would be
an endless money pit. It's China, anything can
happen. Like Jake's partner tells him at the
end of Chinatown.

Quote: Pacomartin

What if Steve Wynn had called it quits and never opened the Encore or expanded into China. Is there something to be said for quitting while you are ahead? Could he end up poor (or at least a mere multimillionaire)?

When you get to a certain level, it is not about the money. Steve could have "quit" at any time. But he is not a Benny Binion who wants to just run a small casino like a street guy and have fun. He is a guy who builds things. He probably likes the building more than the running. Rumor is he did not want his name on the thing.

So he keeps building.

Trump/Wynn in 2016!

Quote: AZDuffman

He probably likes the building more than the running. Rumor is he did not want his name on the thing.

The name was "Le Rêve", four days before the Desert Inn's main tower was imploded on October 23, 2001.

I think you are correct about him, and I don't even think he cares about gambling.He probably would be the guy who builds cathedrals if he lived 1000 years ago. I was thinking that in many cases these guys go into business driven by the need to do "something", but when the dust settles it looks like the smarter decision would be to have done nothing at all.

Take the Hard Rock Cafe, a very profitable off strip casino for decades. It is sold for a lot of money for its potential, they build new towers, they spend a lot of money trying to attract the mid level Asian gambler, and they put in expensive restaurants. It's now a very unprofitable casino.

Quote: Pacomartin

I think you are correct about him, and I don't even think he cares about gambling.He probably would be the guy who builds cathedrals if he lived 1000 years ago. I was thinking that in many cases these guys go into business driven by the need to do "something", but when the dust settles it looks like the smarter decision would be to have done nothing at all.

It might be smarter, but the thing is that is what he does. The guy does have an eye for class and design. He might do well in designing high end residential or non-casino hotels, but casinos are the business he knows best.

Quote:

Take the Hard Rock Cafe, a very profitable off strip casino for decades. It is sold for a lot of money for its potential, they build new towers, they spend a lot of money trying to attract the mid level Asian gambler, and they put in expensive restaurants. It's now a very unprofitable casino.

Happens all the time but that is business. At some point people will take losses and someone else can make a go of it. Look at the mess that was the profitable Stardust. They could have ridden that out another decade at least. Made it a "classic" place for budget travelers. Nope.

Quote: AZDuffman

Look at the mess that was the profitable Stardust. They could have ridden that out another decade at least. Made it a "classic" place for budget travelers. Nope.

Stardust was blown up on November 1, 2006. So it is an excellent example. Just operating it for the last decade would have been far more profitable than blowing it up, spending a fortune on an unfinished casino, and selling the land for $300 million.

I hope the new resort doesn't savage Wynn and Sands. The poor old guys need something for retirement.

Studio city Macau opens in 8 days.

Studio City, a $2.3 billion, Hollywood-inspired gaming and entertainment complex, hired Terence Winter (The Wolf of Wall Street) to write the script and Brett Ratner (Red Dragon; X-Men: The Last Stand) to produce. Directed by Martin Scorsese starring Robert De Niro, Leonardo DiCaprio, and Brad Pitt. This $70 million dollar film is strictly for promotion material. And get this, the government is going to give Studio City only 150 tables (same as they gave Melco's casino last month).

Steve Wynn's rant at the quarterly review is that he is expecting the same treatment (about 150 tables) for his $4.1 billion resort due to open next year.


Right now Wynn Macau has 465 table games but the VIP tables are making $19,953 per day for the first 9 months of 2015 vs $34,263 per day for the same period last year. The mass market tables are making $11,988 per day in 2015 vs $17,070 last year

In comparison the 233 table games in Wynn Vegas are making $5502 /day vs $7396 /day last year. The average blackjack table on the Vegas strip makes $1600 per day.

Unless the governments relents and give him more tables, Wynn could be facing a total debacle.
"In my 45 years of experience, I've never seen anything like this before." Wynn ranted.