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Gaming Guru

Howard Stutz
 

Wynn, Adelson smooth over contentious relationship

21 June 2011

By Howard Stutz

LAS VEGAS, Nevada -- Hostilities have subsided somewhat between two warring factions.

Not basketball fans and LeBron James.

Steve Wynn and Sheldon Adelson have buried their animosity after years of open antagonism. In recent weeks, they have publicly said nice things about each other and their respective casino companies.

But let's not get ahead of ourselves. The chairmen of Wynn Resorts Ltd. and Las Vegas Sands Corp. are not heading out for a couples retreat on Wynn's yacht in the Mediterranean.

It isn't out of the scope of reality, however, that we might see their companies working together on industry issues in the U.S. (Internet gaming legalization) and overseas (continued expansion into foreign casino markets).

Once they put their overpowering personalities aside, Wynn and Adelson are probably on the same page concerning many of these matters.

This détente is not good news for their gaming industry rivals.

Wynn Resorts and Las Vegas Sands are far more financially sound than other casino companies. They also hold the largest stakes of any Nevada-based casino operators in the booming Asian gaming markets.

This also isn't good news for gaming journalists.

It's much more interesting when Wynn and Adelson are lobbing bombs each other's way. Instead, there is a cease-fire in the war of words.

Wynn told Dow Jones News Service last month the allegations raised against Las Vegas Sands by Steven Jacobs, the company's fired Macau chief executive, in a wrongful termination lawsuit, are garbage.

Wynn said "it's not in the cards" that Adelson wanted to use improper leverage against the Macau government. He also praised Adelson's "bravura" and success in Macau.

Adelson returned the favor on June 10 at Sands' annual shareholders meeting in New York.

When questioned about Wynn, Adelson said he "had a lot of respect" for his rival and the company.

"We are not trashing each other," Adelson said. "We are trying to help each other."

Adelson was also looking forward to dinner next month with Wynn "and his new wife."

Excuse me, but what freaking parallel universe did we just wake up in?

Wynn used to refer to Adelson as "Mr. Magoo, with an edge." In 2006, Adelson told Time magazine he was no longer concerned about Wynn because his rival cared more about what people thought of his casino designs than making money.

When present-day Macau was in its early stages, Adelson tried to get Wynn to invest with him in building the Cotai Strip. He was rebuffed when Wynn said publicly that Cotai " was a stupid idea."

Wynn and Adelson used to bicker about everything. A few years ago, they sparred over the number of parking spaces each had at their Strip resorts.

Now, it's mutual admiration.

"We can live together, we can survive and we can flourish together," Adelson said.

Wynn and Adelson could be a powerful duo.

Adelson developed on Cotai without Wynn, building the 3,000-room The Venetian Macao Resort-Hotel. Las Vegas Sands is adding hotel-casinos that are expected to open next year. Melco Crown and Galaxy Entertainment have also built Cotai Strip resorts.

Wynn is no longer negative toward Cotai. He's in the design stage on his own 52-acre site.

Las Vegas Sands has rebounded from its near financial upheaval of 2009. Adelson imploded his corporate executive team, invested more than $1 billion into the company, and finished a $5.5 billion resort in Singapore that is quickly becoming Las Vegas Sands' crown jewel.

Adelson's next step could be a proposed $21 billion Las Vegas-like gaming destination in Madrid, Spain. He might offer Wynn a piece of the action.

However, Adelson needs to put legal matters behind him.

Allegations raised in Jacobs' lawsuit caused the Securities and Exchange Commission and Department of Justice to investigate the company for possible violations of the U.S. Foreign Corrupt Practices Act.

A retrial date could be set next week in the 2008 Richard Suen lawsuit. The Nevada Supreme Court quashed a $60 million judgment against the company.

Members of Adelson's private security staff and his former personal driver, claiming violations of overtime laws, filed federal lawsuits last week.

If things get tough, maybe Adelson can seek comfort from his new BFF.