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Macau Legislature Passes Credit Legislation

1 June 2004

Las Vegas Sun

MACAU -- The Macau General Assembly passed credit legislation on Monday that will allow casino promoters to extend credit in the form of gambling chips to high-rollers, Wall Street analysts said today.

The law, effective July 1, is expected to spur Steve Wynn's plans to build a resort in Macau as well as another deal from MGM MIRAGE, analysts said. MGM MIRAGE wasn't granted a development license from the Macau government but has been in talks with the daughter of license holder Stanley Ho to build a casino there, they said.

Wynn had initially indicated that his company would not begin construction in Macau before credit legislation changes were made. But the company's latest quarterly financial statement last month said it was willing to begin preparatory construction before legislation passed.

"This is very positive for (Wynn Resorts Ltd.) and we expect rapid movement within weeks on many fronts including release of full project details, finalizing the land deal, completing the financing package ... and finally, a groundbreaking by late June/early July," Deutsche Bank Securities analyst Marc Falcone wrote in a research note.

"We would not be surprised if (MGM MIRAGE) were to announce a deal to enter the growing Macau gaming market," Fulcrum Global Partners analyst Joe Greff said in a separate research note.

Sheldon Adelson's Las Vegas Sands Inc. last month became the first American company to own and operate a casino in Macau, ending Ho's decades-long casino monopoly on the Chinese island.

The Las Vegas Sands opened the $240 million Sands Macau casino May 18 and will host a grand opening July 21.

The opening of a Macau casino by another Las Vegas operator "could help quantify market potential," UBS Warburg analyst Robin Farley wrote in a research note. "Initial results form the Sands could represent the lower end of what the property could do since the Sands had a soft opening and was unable to extend credit to high-end gamers," Farley said.

Wynn Resorts stock rose 84 cents per share in early trading to $39.50. Shares of MGM MIRAGE rose 51 cents per share to $44.92.

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