Wynn seeks Macau expansion as Las Vegas opening looms

By Jeff Simpson

Thursday, Dec. 9, 2004 | 11:07 a.m.

Wynn Resorts

Wynn Las Vegas

Encore at Wynn Las Vegas

Wynn Macau

Less than five months before he's slated to open his $2.7 billion Wynn Las Vegas, and with structural steel pilings in the ground for his $704 million Wynn Macau, Wynn Resorts Chairman Steve Wynn says his company is poised to capitalize on the two most powerful gaming markets on Earth.

In Macau, Wynn has abandoned his intent to use his 20-year concession in the Chinese enclave to sign a joint-venture partner to build additional properties.

Even though prospective partners would have had to cough up all of the cash to build a property that would split revenue with Wynn Resorts, Wynn says the emerging power of the Macau market makes a joint venture unlikely.

"Why would you want to share?" Wynn said of his company's Macau opportunity. "I'm going to exploit my opportunities in Macau."

Instead of developing second and third Macau properties with other hotel owners, Wynn says the power of Macau is too valuable to sell, and that he'll build at least one, and possibly two properties on the island.

"I don't want to own the town," Wynn said Tuesday. "I just want to own the best two or three places."

Wynn said he had talked with a couple of high-profile casino operators about their desire to partner with his company but decided Wynn Resorts would do better to build on its own.

UBS Warburg casino equity analyst Robin Farley said Wynn's decision to keep his Macau opportunity for his own company is likely a smart decision, but suggested Wynn might have built sooner than he had if he'd realized how strong Macau's market was, even without the credit-granting reforms he was lobbying the Macau government for.

"It probably makes sense not to subconcession," Farley said. "If he's got the capital, it makes sense. But if he had realized how deep the market was for play that didn't require credit (he might have opened a Macau property sooner)."

Wynn Macau construction is on schedule for a September 2006 opening, Wynn said.

And he's looking for more Macau land on which to build at least one additional casino resort.

"I have 16 acres (at Wynn Macau) but only used about 12 or 13 acres," Wynn said. "And I will get more property."

Wynn Macau will help his company's effort to take part in a potential Singapore casino market if the Malay-peninsula country decides to allow the casino business.

"Doing a good job in Macau is the key to the rest of Asia," he said.

Wynn declined to say whether he thought Singapore would approve Las Vegas-style casinos but said Wynn Resorts would definitely pursue the opportunity to build there if it does.

"We're in the game," Wynn said of Singapore.

Deutsche Banc casino industry analyst Marc Falcone said Wynn's Macau project will boost his standing in Asia.

"When the Macau government issued the concession agreements, they wanted high-quality, destination resorts," Falcone said. "There will be a distinct difference in the properties on Macau, and that will serve Wynn well in Singapore."

Farley agreed.

"To have a successful property already catering to the region, to showcase what kind of development he created, is clearly an advantage," Farley said. "It's clearly an advantage as opposed to not having a property in the market."

Wynn said the vitality of the Macau market reinforces his oft-stated opinion that Macau is a much more lucrative venue than the United Kingdom looks to be.

"The most powerful place on Earth is China, and I'm a primary concessionaire in that market," Wynn said. "For now, the U.K. doesn't strike me as a gravy train."

But Wynn said London remains a city he'd like to operate a Wynn-branded hotel in, along with his own country's biggest city -- even if those properties don't have a gaming component.

"I'd love to have a hotel in New York and London," Wynn said. "Having a hotel in New York is a longtime dream."

Wynn said Wynn Las Vegas continues on schedule, noting that its signature mountain design feature now under construction next to the Strip has proven to be more difficult and costly to build than was planned.

The showroom that will house "Le Reve," the Franco Dragone production that Wynn will open the property with, received its county certificate of occupancy a month ago.

On-site rehearsals for the show start Jan. 3. Wynn said the show will be a "loose story," with the audience part of the production.

He differentiated "Le Reve" from the city's biggest production shows, particularly the Cirque du Soleil shows that MGM Mirage has at Treasure Island, Bellagio, New York-New York and MGM Grand.

"A circus is a thing you look at," he said. "You watch people and you're amazed at what they do. But you don't identify with them. We'll be different, with a theatrical production. A theater is about the audience identifying with the characters."

Wynn said he's actively seeking a third entertainment element to go along with Le Reve and with "Avenue Q," the Tony Award-winning musical he signed earlier this year that is scheduled to open in September.

"I'm looking for something for 2,600 to 2,800 people," Wynn said. "Whether it's a singer or a production, it has to be the right show."

Except for an 18th-greenside waterfall that has yet to be finished, the new Wynn Las Vegas golf course is completed.

Wynn said the course's 17th hole will be "the most spectacular hole in the state."

Falcone said he believes Wynn Las Vegas will drive more business to the city than some industry executives expect.

"When people see and experience Wynn Las Vegas, it will create another round of enthusiasm for Wynn Las Vegas and for Las Vegas," Falcone predicted.