Casino observers speculate on Wynn’s future

David Strow

Tuesday, March 7, 2000 | 10:37 a.m.

With Steve Wynn's future at the combined MGM Grand Inc.-Mirage Resorts Inc. unclear, analysts and Strip observers are busy trying to guess where Wynn will go next.

Many business people might retire after grossing $500 million from the sale of their companies. But most Strip observers believe that's not something Wynn's prepared to do yet -- and the hottest rumor is that Wynn will attempt a comeback at the Desert Inn hotel-casino.

"When you're talking about the greatest innovator and creative imagination of anyone that's ever been in this business, does that sound logical to you that he would retire?" said hotel-casino broker David Atwell. "You can expect him to do something significant, regardless."

MGM Grand has not officially announced whether Wynn will remain after the merger. However, company Chairman J. Terrence Lanni told the Associated Press that Wynn hasn't asked for a job at the new company, nor has he been offered one.

The Desert Inn, owned by Starwood Hotels Resorts Worldwide Inc., recently went back on the market after Sun International Ltd. decided not to purchase it while the company was going private. The sale price had been $275 million.

Now Wynn, with nearly $400 million in capital from the sale of his Mirage Resorts shares after taxes, might look at picking up the high-end property at an attractive price and starting over, observers speculate. It would be a move not unlike that of Bill Bennett, who acquired the Sahara shortly after leaving Circus Circus Enterprises Inc. (now Mandalay Resort Group).

If he purchased it, Wynn would pick up 32 acres of land nearby for future expansion.

"The Desert Inn is small enough to handle, make a 5-star resort," said Anthony Curtis, publisher of the Las Vegas Advisor newsletter. "If his true dream was to create the absolute 5-star gem, it's possible.

"If you had to put your money on one move, that would be a logical one."

But not everyone is convinced Wynn would want to buy the property, which has struggled in recent years with relatively anemic cash flow.

"He's been a developer, not necessarily an acquirer of other peoples' property," said Robin Farley, analyst at Deutsche Banc Alex. Brown.

Should Wynn decide to try to build a Strip property from the ground up, there are two possible parcels of land available. One would be the 55-acre Boardwalk site, next to the Bellagio -- a site Wynn has eyed for future expansion for years. The second plot is a 16-acre site at the intersection of Harmon Avenue and the Strip, located near the Polo Towers.

The Boardwalk site is larger and more attractive, but it is owned by Mirage Resorts -- and it is believed MGM Grand would be reluctant to sell it, since it would open the possibility of a competing property opening next door to the Bellagio.

Starting a new property from the ground up would require outside financing as well. But some on Wall Street aren't convinced the appetite exists for bonds to build another casino, particularly since the latest projects on the Strip have produced relatively disappointing returns.

"Anything he'd do would require significant outside financing," said Dave Anders, analyst at CS First Boston. "I'm not sure the market is ready to provide it, not just for Steve but for any new projects."

What also shouldn't be ruled out, Anders and a few others said, is that Wynn might be tired of the gaming industry -- and ready to go into an entirely new venture, or just take time off.

"I'm under the impression that he really was going to take time off, focus on other aspects of his life," Anders said. "Building Beau Rivage and Bellagio ... those were enormous projects that took a lot of energy and a lot of time. It isn't inconceivable he would want to focus on the art world or pursue other activities."