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Best of Chris Sieroty

Gaming Guru

Chris Sieroty
 

Wynn Resorts ranks 26th on Fortune's "Fastest-Growing Companies" list

25 September 2012

LAS VEGAS -- Wynn Resorts Las Vegas was the only Nevada business to make the list of Fortune Magazine's "Fastest-Growing Companies," coming in 26th on the list, the magazine reported in its Sept. 24 issue.

Company Chairman and CEO Steve Wynn attributed the accomplishment to a consistent and high-quality product, as well as continued strong revenue growth at his firm's two properties in Macau.

Wynn Resorts was ranked due to its three-year average revenue growth of 26 percent and profit growth in that period of 81 percent. The company's ranking comes as it prepares to replace a long-term board member and faces several lawsuits.

"In one word, it's China," Wynn said in a phone interview. "Our properties in China have brought hundreds and hundreds of millions of dollars back to Las Vegas."

The magazine also highlighted Wynn Las Vegas's casino revenue growth of 17 percent. The company's Macau growth rate was 32 percent, the magazine said.

"We are very fortunate," Wynn said. "We cater to an upper-end clientele. We don't pretend to be Circus Circus. We are selling a quality product to people who really care about it."

Wynn said the past few years have been "painful," but revenue from China has allowed the gaming company to keep its work force, pay benefits and invest $100 million in renovations to Wynn Las Vegas.

"It's also about consistency," Wynn said. "We've been consistent over the last two to three years. We didn't make a flashy commercial … having my name on a building didn't attract people. People get a good product."

Wynn Resorts, Las Vegas Sands Corp. and MGM Resorts International have all benefited financially from operating in Macau, Wynn said.

Wynn said Macau "saved MGM," while Sheldon Adelson, CEO of Las Vegas Sands Corp., wouldn't have been able to build the Palazzo on the Strip without revenues from Macau.

The former Portuguese colony generated $3.27 billion in gaming revenues in August.

Wynn Resorts saw net revenues grow from $3 billion in 2009 to $5.3 billion in 2011, thanks to strong growth in China. The company in 2010 opened Encore at Wynn Macau, an expansion of Wynn Macau, which opened in 2006.

Wynn Resorts is developing its $4 billion Wynn Cotai project in Macau.

Despite the recession's effect on Las Vegas, Wynn Resorts has been consistently profitable largely due to its light debt load and strong balance sheet, the company said. The gaming company posted net income of $138.1 million, or $1.37 a share, in the second quarter on revenue of $1.25 billion.

Analysts surveyed by Yahoo Finance expected Wynn Resorts to report earnings of $1.33 a share on revenue of $1.31 billion in the third quarter.

The prestigious ranking comes in the run-up to an Oct. 2 hearing to determine whether his former business partner Kazuo Okada and his Aruze USA Inc. can vote their approximately 20 percent stake at the Nov. 2 annual meeting.

Okada remains a company director. Two lawsuits in Clark County District Court are the result of a dispute between the two former business partners.

Wynn Resorts this year declared Okada "unsuitable" under Nevada gaming law and canceled his $2.9 billion stake in the company after an investigation found he allegedly gave more than $100,000 in payments and gifts to gaming regulators and their families in the Philippines.

Okada denies wrongdoing, and in a lawsuit has questioned the timing of a $135 million company donation to the University of Macau Development Foundation. The donation was made at a time when its Wynn Macau subsidiary was seeking approval to build a new casino.