Can it really be five years ago that the “new Macau” started in earnest when Steve Wynn opened the classiest joint in town? How time flies. We remember the party well, with the big shot and his then-wife dancing to the tune of “I need a hero” in front of the gyrating fountains.
Today, several billion US dollars in revenues later, the Las Vegas Review Journal wrote a nice report to mark the anniversary by noting that things have never been better for the iconic resort. Respectfully, we beg to differ.
Perhaps this is nit-picking, but things have been better, competitively speaking. While we could fully understand if Wynn himself were to be thanking his lucky stars for the success of his Macau property, especially since Vegas went into the tank in 2008, and he would probably be the first to admit that he never imagined he could be making this much money from it today, we wonder if that’s really enough for him.
It’s not that he hasn’t yet received approval for his Cotai land. We have no doubt that will come, eventually. How could any government be ungrateful to someone who had pledged to donate more than a billion patacas to help build its new university campus in Hengqin? And once the concession is gazetted, we presume Wynn Macau will no longer need to keep adding a paragraph to its interim and annual reports detailing the US$50m payment that needs to be made to an undisclosed third party to relinquish its rights to the land, as the Macao Post noticed this week.
No, it’s not that. It’s that we can’t help but notice how Wynn Macau appears to be in the same boat as its fellow American gaming companies, rowing away as hard as they can while the Galaxy Entertainment Group steams past with smoke billowing from its exhaust, thanks to the recent addition of a second engine in Galaxy Macau.
Now, don’t get us wrong. We know Wynn doesn’t see itself as a competitor of GM. Its mass floor still does a lot more, especially at the high end over in Encore, and its Ebitda margins are a lot wider. But Wynn used to be the undisputed champion of the rolling-chip market. It still does more than any other single property in Macau (if that is a fair way of describing it since the addition of Encore). Nevertheless, Galaxy Macau has turned its owners into the clear leaders of the VIP market in Macau, if you discount all those third-party volumes accounted for by SJM.
Will Wynn be able to regain the title belt when it opens its own property in Cotai? Perhaps. When that eventually happens. But right now, there is no doubt where the momentum lies in this market. And it ain’t with the yanks. Happy birthday, Wynn Macau. Used with permission and copyright IntelMacau.com