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Best of Howard Stutz

Gaming Guru

Howard Stutz
 

Macau helps lessen Wynn loss

26 February 2010

LAS VEGAS, Nevada -- Casino developer Steve Wynn summed up the current status of Wynn Resorts Ltd. in a few sentences in the company's hourlong fourth-quarter earnings conference call Thursday.

"We're more of a Chinese company than American company today as we're having this call," Wynn said. "I love it. Thank God for being outside the United States today. There isn't an executive in the world that isn't thrilled about being outside the United States today."

Wynn's comments came after the casino operator announced it had narrowed its fourth-quarter net loss from a year ago based on results from Wynn Macau.

Wynn said he was guarded on the future of Las Vegas, often blaming the Obama administration and the political climate in Washington, D.C., for the troubles casino operators are having on the Strip.

"The policies in Washington, the policies of government have taken a terrible toll on the working people in America that come to Las Vegas," Wynn said. "I'm excited for 2010 and beyond for Macau. I wish I could say the same thing about Las Vegas. Unlike some of our competitors who have seen all kinds of glitter and wonderment just around the corner. We don't see that."

Wynn Resorts, which operates Wynn Las Vegas and Encore, said its net loss in the quarter that ended Dec. 31 was $5.2 million, or 4 cents a share. A year ago, the company lost $159.6 million in the fourth quarter, or $1.49 per share.

Analysts surveyed by FactSet Research expected the company to earn 15 cents a share.

Wynn Resorts said its net revenues were $809.3 million, compared with $614.3 million in the fourth quarter of 2008. The revenue increase was driven by a 29.6 percent increase in revenues at Wynn Macau and a 35.7 percent revenue increase from its Las Vegas casinos.

The recently completed fourth quarter included a full three months of results from Encore, which opened on Dec. 22, 2008.

At Wynn Macau, the volume of its table-games business in the VIP segment jumped to $16.9 billion from $11 billion even as the house's win percentage slipped. The company's slot machine handle in Macau increased 9.4 percent to $843.5 million.

Wynn expects continued good fortune to roll into April when Encore, a $600 million expansion at Wynn Macau, opens with 410 suites and villas, additional casino space and restaurants.

Wynn also gave investors a taste of what the company is developing on Macau's Cotai Strip, calling the project a single-resort development "that is the prettiest we've ever built."

Wynn also released additional details on the company's plans for Philadelphia. On Tuesday, Wynn Resorts signed an agreement to be the managing partner for a stalled casino project in Philadelphia. Wynn said he has been spending "eight or nine hours a day" on the project. It will not have a hotel but will be a full-scale casino with 3,000 slot machines, table games and a variety of restaurants.

"It won't be slots in a box. It will be the cutest place we've ever built," Wynn said. "It will be the Wynn signature presentation with all the bells and whistles."

The location is near the Walt Whitman Bridge that connects Philadelphia with communities across the Delaware River in New Jersey.

Even with a focus outside Las Vegas, the company is concentrating on its home base. Wynn expects to open the Beach Club at Encore on May 21. The $67 million expansion will add pools, a restaurant and a nightclub. The expansion also includes enhancements to Encore's Switch restaurant.

"We took a fancy porte cochere that was worthless and turned it into something that will produce revenue," Wynn said.