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Gaming Guru

Amanda Finnegan
 

Wynn says he's prepared to weather economic storm

22 December 2008

LAS VEGAS, Nevada -- Steve Wynn is hours away from opening his newest multi-billion dollar venture in one of the hardest economic times Las Vegas has ever seen.

During a 40-minute interview this week with celebrity reporter Robin Leach, Wynn discussed the gaming industry's economic woes, Nevada's regulatory climate, his newest resort and the sale of Treasure Island to former Frontier hotel owner Phil Ruffin.

Wynn said at both Wynn Las Vegas and Encore he has focused on a younger crowd and the nightlife phenomenon that has hit Las Vegas, which he said began sometime around 2000 and stemmed from European hot spots. Wynn recruited Victor Drai, creator of Tryst in the Wynn, to recreate the nightlife vibe in Encore with the XS nightclub.

Gaming, Wynn said, hasn't been as big of a priority in recent years.

"In my business gaming has never been the driver. It's maybe been the best cash register in the building until the clubs came along," Wynn said.

When Wynn sold Mirage Resorts in 2000, he already had been in the business for 27 years. Even for a seasoned casino veteran, Wynn said he and his neighbors are facing difficult economic times.

"The environment is so different -- it's nothing that I've ever experienced," he said. "I'm struck by the fact that around me are companies threatened at the moment who are dealing with their cash flow or their revenue as issues of survival, that there are tens of thousands of employees who are destabilized and frightened about being laid off or losing their jobs, that the city wasn't well prepared for this contingency."

Wynn said with or without a downturn in the economy, one thing hasn't changed.

"I've never started building without having all the money to finish it, plus a reserve," he said. "I can't imagine that people would do it any other way."

While Wynn will be opening his second resort on the Strip, some casino developers are pulling out of projects, both locally and internationally. MGM Mirage executive vice president and chief financial officer Dan D'Arrigo announced last month that his company wouldn't be building in the Las Vegas market for five to seven years.

"This is not a happy moment. There is no triumph," Wynn said of the Strip economy. "There is just lament that Las Vegas is in this situation. Las Vegas should not be in this situation."

Wynn was especially harsh on companies that have found themselves backed into a corner during the poor economy.

"I find myself prepared for this with my company. And I take no special credit for this. It's hard to puff yourself up for not being stupid. That's not the same thing as being smart," he said.

Wynn recently watched real estate developer and former New Frontier owner Phil Ruffin buy Treasure Island for $775 million. Wynn said he believes the "unbundling" of the Strip from companies like MGM Mirage and Harrah's will be beneficial.

During the interview, Wynn called for the Nevada Gaming Commission to place more demands and restrictions on casinos.

"I think the state of Nevada should be very preemptive and demanding about the balance sheets of licensees and those balance sheets should be measured in terms of their ability to withstand the maturity of their debt in a bad time, their ability to complete projects financially before they start them, not after," Wynn said.

The $2.3 billion Encore Las Vegas will open its doors at 8 p.m. Monday. The resort will feature 2,034 rooms, 11 retail stores, seven bars and five restaurants, including the Frank Sinatra tribute restaurant, Sinatra.