Board gives thumbs up to Wynn

Thursday, March 10, 2005 | 11:10 a.m.

Acknowledging that Steve Wynn's flair for innovation has launched new eras in gaming for three decades, the state Gaming Control Board unanimously recommended approval of licensure for the $2.7 billion Wynn Las Vegas resort Wednesday.

It was clear from the beginning of the two-hour hearing that Wynn and his management team were on the fast track to approval, but the three-member board asked several questions to assure that all i's were dotted and every t was crossed on a series of licensing, suitability, corporate registration and shareholder applications.

"It's an exciting time for Las Vegas, and Mr. Wynn's timing couldn't be better," said Dennis Neilander, chairman of the Gaming Control Board, prior to the vote. "Mr. Wynn is an innovator, and I'm a regulator. I have no reason not to allow him to be an innovator."

"I'm proud to be a part of this process," added board member Bobby Siller. "I had the opportunity to tour the property, and when it was only at about 80 percent developed, it was still a breath-taking experience."

Siller said he was impressed with the management team that sat in the same chairs in the board meeting room just two weeks earlier when MGM Mirage presented its plan to acquire Mandalay Resort Group and form the world's largest casino company.

"But this group is equal to if not better than that management team," Siller said of Wynn and his team, which collectively have more than 160 years' experience in the industry.

Siller also said it is a credit to Wynn that so many employees in the industry are trying to land jobs with the company "because they wanted to be a part of the Wynn experience."

New board member Mark Clayton, upstaged by the comments of his two colleagues, added, "It's an eventful time for the applicant as well as the state of Nevada."

The Control Board's recommendation next goes to the Nevada Gaming Commission, which meets in Las Vegas on March 24. The five-member commission also is expected to approve the licensing.

Wynn offered precious few new details about his 2,700-room resort that now dominates the northern Strip skyline. The property opens in seven weeks, and engineers already have begun testing emergency systems throughout the hotel.

Wynn said he plans to open the property just after the stroke of midnight on April 28 and that employees and their families will stay in the rooms on the Monday, Tuesday and Wednesday nights preceding the opening. It's a period that Wynn calls "one of the happiest times of my life," because the workers to whom he has entrusted the building get a chance to see it in a pristine state.

Advanced bookings for rooms and for convention and meetings space already have exceeded expectations, said Wynn Las Vegas President Ronald Kramer.

Wynn also detailed some of the marketing plans for the property, indicating that a blitz of Asian tourists will be making their way to Las Vegas in general and his resort specifically. The company has sales offices in Southern California and Vancouver, British Columbia, as well as Tokyo, Taipei, Singapore and Hong Kong.

More sales offices are planned in a variety of cities in mainland China where the company will be confronted with the issue of selling the resort without mentioning gambling.

"But we're not just hustling people to play baccarat," Wynn said, noting that his marketing team would emphasize dining and shopping experiences in both Las Vegas and Macau.

Making entertainment, dining and retail experiences as profitable as the casino has been a staple in Wynn's success formula at the Mirage and the Bellagio in the 1990s. He said he has no intention of upsetting Chinese government officials.

"They've very clearly drawn the line," Wynn said. "The last thing we want to do is upset the government of China (with the company's marketing)."

Some of Wynn's guests are expected to be high rollers who would use the resort's private gambling salons, which received several minutes of regulatory scrutiny since diagrams the company provided to the Control Board were unclear as to whether there were two or three salons.

Board members concluded there were two rooms eligible for salon status -- a marketing ploy that enables players with high credit ratings to play behind closed doors. Salons are required to have special surveillance systems with closed-circuit cameras that provide video images directly to Gaming Control Board agents in their offices.

Wynn will join high-end resorts MGM Grand, Venetian, Mandalay Bay and Caesars Palace in the private salon business, hoping to capture big-money players who only play in private settings.

The Control Board also sifted through Wynn Las Vegas' dizzying financial structure, which includes several companies and subsidiaries financed by Wynn and Japanese partner Kazuo Okada, chairman of Aruze Corp., a public stock offering and a series of long-term debt offerings.

In addition to financing construction of the resort and Wynn's Macau project, which is due to open in 2006, the company is gearing to finance the $900 million Encore expansion project, which will add 1,500 rooms to the resort.

Neilander, a finance expert, praised the company's financial structure, but he termed the company's revenue projections as "aggressive." But he quickly added that in Wynn's previous resort openings, he had similar aggressive projections.

With strong pre-bookings in rooms and conventions and higher-than-expected average daily room rates projections, Neilander said he expects a repeat of the performances brought in with the opening of the Mirage, Treasure Island and Bellagio.

"Everybody thought you'd fail," Neilander said, "but in the first year (of operations of those resorts), you blew the projections away."

During the hearing, attended by about 70 people, Wynn split his time sitting with his wife, Elaine, a member of the Wynn Las Vegas board of directors, and Okada, who sat with several of his Japanese associates with Aruze.

Aruze was licensed at a previous board meeting and was only on the docket as a corporate investor in the Wynn project.

Attorney Frank Schreck, who highlighted Wynn's gaming industry career in Las Vegas, introduced Wynn, who spent about 20 minutes explaining his strategy.

Noting that for the first time he's going to have to compete against properties he designed and built, Wynn said his new resort is more about bringing an idea to fruition than building a new tourist attraction.

"We've got loads of boxes of stuff," Wynn said of the city's attractions. "But this (Wynn Las Vegas) is new and different from all of the projects we've had in the past. The trick is to dish it up in new and wonderful ways."

Wynn said the secret is to develop an atmosphere of intimacy in a resort that serves thousands of guests at a time. It's also about providing enough surprises to keep guests coming back to discover more.

"We've got to get them to come twice; they can't do it in just three days," Wynn said.

People who have seen the interior of the property say Wynn has succeeded with the concept. And once a guest is in the building, Wynn said it's up to his employees to do the rest.

"Turning the tourist into a guest, that is the alchemy," Wynn said to board members.

He said his company has always been known for its attention to human resources and "that's going to be the hallmark of this company."

In the end, the final judge of the success of the project will be the public, he said.

They'll begin making their judgments next month.

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