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Friday, April 10, 2009 | 11:17 a.m.
Steve Wynn, Part I
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Uncertain Futures, seg. 2
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Uncertain Futures, seg. 3
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Uncertain Futures, seg. 4
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Steve Wynn, Part I
Steve Wynn, Part II
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Poison of Choice?, seg. ...
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Poison of Choice?, seg. ...
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Poison of Choice?, seg. ...
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Steve Wynn, Part II
Video: Wynn, In His Own Words (December 2008)
Related stories
- Wynn: Obama’s remarks bad for convention business (2-26-2009)
- Wynn reports loss in fourth quarter (2-24-2009)
- Wynn announced salary reductions, reduced work weeks (2-03-2009)
- Wynn says he's prepared to weather economic storm (12-20-2008)
- Envy this casino operator (12-20-2008)
Casino mogul Steve Wynn said during an interview this week he has little faith that federal stimulus dollars headed to Nevada will lift a struggling economy.
President Barack Obama’s $787 billion stimulus plan will bring an estimated $1.5 billion to the state. Wynn said that’s not the solution.
“I think a great percentage of the stimulus has been wasted. It didn’t do what it was supposed to do,” Wynn said. “We did not create jobs. Nothing I’ve seen has been a job creator.”
Wynn sat down for an interview on the news discussion program “Face to Face with Jon Ralston,” which aired in two parts Wednesday and Thursday. During his interview with the Las Vegas Sun columnist, Wynn outlined what he feels is a recovery plan for Wynn Resorts and discussed the suffering national and local economy.
Wynn said he believes changes in tax structure are the government’s most powerful tools for recovery, and more specifically, tax credits should be used as an incentive for companies to hire.
“If you wanted to create jobs in every sector of this economy and every community … you could do it in less than a month without hiring any federal employees,” Wynn said. “You’d simply say if a company can prove that it has increased its regular work force, with health insurance … we will give you a tax credit to support the payroll of that new hire.”
Wynn said he was “the only person in Nevada” to create jobs in the past year. Wynn hired more than 4,000 people for the opening of his $2.3 billion Encore Las Vegas resort but announced a cost-cutting initiative in February that reduced work weeks and salaries for full-time employees, eliminated 2009 bonuses and suspended the company match to employee 401K plans. Wynn Resorts hasn’t had layoffs at the level of other gaming companies on the Strip.
Wynn has disagreed with Obama on more than the stimulus package. In February, the casino owner joined city officials in their criticism of Obama’s remarks on corporations spending taxpayer dollars in Las Vegas.
Wynn said Obama’s remarks caused State Farm Insurance executives to cancel a $5 million sales conference at Wynn’s resorts. Rather than moving forward with the conference, Wynn said State Farm paid a $3.3 million scrub charge to cancel the conference.
“I think there’s a bias in the government to get a pound of flesh. There’s a meanness against business. The [Obama] administration has a sense of anti-business because of the excessive things that were done on Wall Street,” Wynn said.
On a state level, Wynn said the worst thing Gov. Jim Gibbons and the Legislature could do is come after the gaming industry seeking more taxes.
“I know that if they go after the gaming industry we will have massive, unbelievable cutbacks. The unemployment rate will go to 15 percent,” Wynn said.
Wynn called out others in the business community like lawyers, banks, the construction industry and insurance companies “as selfish people who have refused to take up one spec of their fair share.”
“They’re hurting but they aren’t paying the kind of taxes we are. Over half of the state’s budget is paid by us,” Wynn said.
Wynn Resorts is faring better than some others in the gaming industry, but still reported a net loss of $159.6 million during the fourth quarter compared to a profit of $65.5 million the comparable period of 2007.
Wynn was critical of his Strip neighbors, like MGM Mirage and Las Vegas Sands, who are billions of dollars in debt with ongoing projects in Las Vegas and Macau. Wynn said he has kept to his philosophy of expanding his brand when the cash is there, plus maintaining a reserve.
“This particular form of insanity is when you started a project without having the money to finish it. I find that to be mystifying. I don’t have anything to say, but why?” Wynn said.
Aside from Wynn Las Vegas and Encore Las Vegas, Wynn Resorts owns a 600-room hotel and casino in Macau and has started construction on the $700 million Encore at Wynn Macau.
Wynn said he might be interested in buying back his former properties now owned by MGM Mirage, such as the Bellagio and The Mirage, but only if the price is right and the cash is available.
“Hopefully taking advantage of our proper balance sheet, our cash reserve, our low interest rates and our lack of short-term maturity… we are in a position to be helpful to people on the Strip who would be better served by unbundling,” Wynn said. “I think the unbundling of The Mirage company is a good idea. I thought that the putting together of those two companies was a bad thing.”
The bundling Wynn referred to is MGM Mirage’s 2004 acquisition of Mandalay Resorts, which consisted of the Mandalay Bay, Luxor, Circus Circus, Excalibur and the Monte Carlo. Wynn said the bundling goes against what Las Vegas was built on.
“The town’s history has been based on competition, diversity of ownership -- smart groups of guys fighting it out. Getting the best deals by having competitive advantages,” Wynn said. “When you bundle things up in giant corporations like Harrah’s or MGM Mirage, to me it’s not a Las Vegas thing.”
In a 2005 interview with Ralston, an optimistic Wynn said that short of a terrorist attack like 9/11 or another cataclysmic event, Las Vegas wasn’t a machine that could be easily thrown off. Four years later, with lower room occupancy numbers, slashed room rates and a drop in convention business at his resorts, Wynn has changed his tune.
“We’re not insulated. People that lose their jobs and go broke can’t go and spend money. People that have money when things get this widespread get careful and don’t spend money,” Wynn said. “Everyone is conserving their assets and that is the right thing to do in a situation like this.”
Correction: This story has been changed from its original version to reflect that "The Mirage company" Wynn referred to when speaking of "bundling" was the merger of Mandalay Resorts and MGM Mirage, not MGM Grand and Mirage Resorts.
maybe give your customers a little more fair play at slots, steve. you may have updated las vegas with the mirage, but you also started these bean counters.
Yep, the Wynn slots are amongst the tightest I have seen.
I love Steve. Well, you know when he isn't singing show tunes or shooting a finger off, or poking a hole in priceless artwork.
I would really love to see the 'turning of the worm' if Steve can buy back some of his babies from Kerkorian.
Hmmmm, I've always figured Mr. Wynn as someone who doesn't look behind, thus I've believed he would never bring Mirage and/or Bellagio back under his aegis.
But the more I think about it, a move like this may be in his long-term interest because 1) MGM needs the cash, obviously, to complete City Center and the success of City Center might arguably be symbiotic with the recovery of the entire Vegas market, 2) having the K-Mart of casino operators, Colony Crapital, with its greasy tentacles all over City Center, and maybe Mirage and Bellagio, would mar the cachet of Mr. Wynn's neighborhood. There are just certain people you don't want at the party, and 3) simply put Bellagio and Mirage make money. I have little doubt that Vegas will emerge from this economic meltdown just fine. If Mr. Wynn makes these purchases for what I might consider a bargain, they could be paid off in seven-to-eight years.
Besides, Mr. Wynn needs a challenge. Encore is complete. I know there's Macau, but Wynn is a Vegas guy. He needs his next challenge here in Vegas and being at the vanguard of its recovery as well as its face (albeit surgically-enhanced) is something he'd no doubt relish.
I love to see Steve buys back Bellagio maybe not the Mirage! To much @ Mirage had been damaged by MGM, it will cost too much to restore where I used to work as International Marketing VP! I will go back to work for Steve yesterday, he was the best BOSS bar none!
When I used to stay at The Mirage in the early eighties they had the best staff in town. I could tell the employees really loved their jobs because it showed in their superior and sincere service. They were not going through the motions as I see many of the hotel staffs on the strip do today. Steve Wynn must have been doing something right.
I can see it now,Mr Wynn buying them back dropping rates(:ie cheep mans vegas again) make a bundle then drop one or both and building some thing even bigger? Now that would be a gas!!!
9ballguy: Hmmm, might need to get your facts straight. The Mirage didn't exist in the early 80's. It's didn't open until 1989.
So sorry Jgbpdx regarding my mistake.... I intended to say the early nineties.. Try making a positive statement about the article instead of a snide sarcastic,negative one. I hope you are not in the service industry.
I just saw that Vegas has lost the annual SIA Snowboarding convention to Denver for the next 10 years.
No, it won't bring Las Vegas to its knees, because it wasn't a huge convention, but it's lost business.
Wynn was one of the guys saying "Vegas is recession proof" about 8 months ago.
Too many bean counters, mergers, and golden parachutes ruined this town. Vegas needs an enema.
Kudos to Steve Wynn for standing up and saying that Obama is hurting businesses.
I've always liked Mr. Wynn. Thanks for speaking up about this so-called stimulus plan.
I live in NY, and the things that the current President Obama said about going to Vegas really made me mad! I lived there for two years and I loved it! Who the heck is he to say anything about where people spend their money? I think he has to go to school to become an idiot. I think he wants his cake and eat it too. Give people money, but then tell them that they are not responsible enough to spend it wisely so you are going to tell them where to spend it. Or where not to spend it. And yes, Steve Wynn is right...his stimulus plan has not helped the economy. In my thoughts, did Bush's stimulus checks helped the economy?
Here in NY, we used to be the Leather Stocking region of the country. You got your EPA do gooders in here and they chased all of our business to Mexico, China the Philippines, India...to everwhere but somewhere in the United States. They lobbied to get strict and expensive regulations about clean water, clean air and all this stuff. But it was at the expense of the companies...the government never gave them a bailout to help put in water treatment plants and stuff. And I still do not see our jobs coming back from overseas here. Thanks WTO. Thanks NAFTA. And what's the best thing Obama can do? You cannot help the economy without creating jobs! Duh! Pick on the only place that was making decent money...Vegas. He has no business in Washington....at all. And someone correct me if I am wrong...isn't he the ex governor of, what I read, is the most crooked state in the Union....Illinois? How did he get to be President? I didn't vote for him!!
wow, if you're not a wynn kisser you get your comment removed.
You are brillant Mr. Wynn - no, seriously. I watched this interview on Sunday morning and was amazed at your ability to respond with such conviction and business acumen. I am thoroughly impressed! Your ideas, your personal investment in this community is to be admired. I truly felt a sense of your personal commitment to be a part of the solution. Even put in a position to criticize the President - who I agree is brillant - you addressed the question that imparts your keen understanding - you are intellectually mature. Please stay committed to our community, we need you. When the stockholders voted for the sale of Mirage Resorts I knew their commitment was not to the betterment of Las Vegas in conjunction with profits - they took beautiful properties and turned them into an assembyline - and then did it again, except now their making crap. You know the truth, but you know it because you feel it. You have to feel Vegas to know Vegas. And you Mr. Wynn feel Vegas.
Wynn is right on target on two major points.
First, it is unwise to take on any debt without a clear plan for paying off that debt. That applies to individuals using credit cards as well as major corporations spending huge sums on future projects.
Second, I, too dislike the idea of major casinos buying up the competition, and placing several major casinos under the same management.
Las Vegas gambling HAS to be predicated on the premise that the gambling public will be given an opportunity to win at least PART of the time. If the odds are reduced to the point where a person might as well throw their gambling dollars into the sewer, why go at all?
Taking on excessive debt, and putting the entire gaming experience in the hands of the accountants is going to result in LV gaining a reputation that will destroy the publics desire to participate. If the number of offers we are receiving in our E-mail are any indication, the downward slide has already begun.
We were last out there in December, and if our last trip is any indication of where LV is headed, I think we will be spending our gaming dollars closer to home, until LV management remembers that it is in a People Business, and is not trying to rip off everyone who ventures onto the Strip.
You said it deminin! The strip is headed for a sobering, hard and cold reality if they don't stop ripping off their customers.
You are wrong - he was a state senator not a governor. And his comments about spending money were in response to business receiving bail-out money ie TAXPAYERS DOLLARS and were meant to indicate that companies should not be heading to Vegas on TAXPAYERS DOLLARS - and right he is. I live in Vegas and even I can't afford to enjoy this town right now so if I can't afford to spend my own money here for some entertainment why should someone else spend my money here to be entertained. People who refuse to understand the TRUE meaning of his words are either brain-dead or just to stubborn to admit that what he said made sense.
As for Illinois being the most corrupt State in the Union I can only say that there isn't an HONEST politician in ANY state of this union - so while Illinois may have the distinction of being the 'most' corrupt we would be hard-pressed to find a state that isn't.
We have enjoyed going to LV for several years, and we have always had a good time, and figured that we received some value for our money. This last trip in December was ruined the very first morning when we went down to the buffet for breakfast, and found a price of $18.95...FOR BREAKFAST...at a BUFFET??? How much can a couple of eggs, 2 strips of bacon, a slice of toast, and a cup of coffee cost?? That just set the tone for the entire trip, and had it not been for the wife hitting a nice slots win at Paris, we would have felt somewhat cheated for the entire trip. I think the next time we go, we will stay at the Orleans, or some place off strip...at least those places still seem to appreciate their clientele.
Funny how no one is talking about the "movements" within Wynn and Encore, instead of laying people off they are taking away peoples full-time status and forcing them to go backwards into steady extra positions. Mainly people within the culinary union including but limited to servers, bussers, food runners and stewarding. Mr. Wynn is talking about buying up new properties while he's putting employees in his namesake properties virtually jobless and without the ability to get their full-time status back if and when the economy does turn around. He's using the economic recession to single handedly break the culinary union, that is a prediction that only time will tell.
I just came back from a week in Las Vegas and it certainly isn't what it used to be. The price of food was insane--$20.00 for breakfast in a coffee shop?? Give me a break. I guess casinos don't care if they get visitors' money at table games, machines, or the coffee shop, but the people being ripped off sure care.
Don't even get me started about the atmosphere on the strip. I felt like I fell into a scene from "The Jersey Shore" on MTV. All the new bars on the strip and the screaming, drunk 20 somethings that were at these places were just tacky.
Las Vegas needs to become a playground for real adults again.