Posts Tagged ‘Wynn Resorts’

Activist/author Pisani sees a place for corruption

September 17, 2014

At TEDx Ubud earlier this month, author and activist Elizabeth Pisani highlighted how corruption fits into social and political contexts, a vexing issue for US companies doing business overseas. Pisani, who will also appear next month’s Ubud Writers and Readers Festival, also noted that corruption isn’t always about self-enrichment.

Totally globalized native New Yorker and former broadcast news producer Muhammad Cohen is a blogger for Forbes and author of Hong Kong On Air, a novel set in his adopted hometown during the 1997 handover about television news, love, betrayal, high finance, and cheap lingerie. See his bio, online archive and more at www.muhammadcohen.com; follow him on Facebook and Twitter @MuhammadCohen.

Investors demand more from Macau

June 5, 2014

Macau’s gaming revenue rose 9.3 percent year-on-year in May to more than $4 billion, the fifth highest monthly total ever. That news sparked a brutal selloff in Macau casino shares, as investors expected even better numbers. Some analysts insist sellers are missing Macau’s big picture.

Totally globalized native New Yorker and former broadcast news producer Muhammad Cohen is a blogger for Forbes and author of Hong Kong On Air, a novel set in his adopted hometown during the 1997 handover about television news, love, betrayal, high finance, and cheap lingerie. See his bio, online archive and more at www.muhammadcohen.com; follow him on Facebook and Twitter @MuhammadCohen.

Macau stocks: expect a wild ride

May 7, 2014

Wells Fargo Securities analyst Cameron McKnight forecasts a “choppy” year ahead for Macau casino stocks. But for true believers, sharp drops represent buying opportunities.

Totally globalized native New Yorker and former broadcast news producer Muhammad Cohen is a blogger for Forbes and author of Hong Kong On Air, a novel set in his adopted hometown during the 1997 handover about television news, love, betrayal, high finance, and cheap lingerie. See his bio, online archive and more at www.muhammadcohen.com; follow him on Facebook and Twitter @MuhammadCohen.

Casino billionaires risk all in brawl

February 26, 2013

When elephants fight, the grass gets trampled, according to an Asian proverb. Most animals know how far to take a confrontation without lasting consequences, but occasionally, one or both elephants gets gored.

For more than a year, Wynn Resorts chairman and CEO Steve Wynn and Kazuo Okada, his one-time largest shareholder and key financier, have dueled publicly. Last week, Wynn shareholders voted to remove Okada from the company board of directors, a day after Okada, the chairman of Japan’s largest pachinko machine maker, resigned amid leveling a blistering attack on Wynn.

Behind the boardroom drama, billionaire casino developers Wynn and Okada have traded allegations of numerous shady dealings in Macau and Manila. Bribery accusations, in dollar amounts ranging from the hundreds to the hundreds of millions, figure prominently in their charges. As I wrote in Asia Times, inviting regulators to scrutinize the casino business is a risky bet. That’s especially true in this confrontation, where neither elephant seems inclined to back off.

Totally globalized native New Yorker and former broadcast news producer Muhammad Cohen is author of Hong Kong On Air, a novel set in his adopted hometown during the 1997 handover about television news, love, betrayal, high finance, and cheap lingerie. See his bio, online archive and more at www.muhammadcohen.com; follow him on Facebook and Twitter @MuhammadCohen.

Hard ten coming for casinos in Macau

June 26, 2012

This week marks the tenth anniversary of the real start of Macau’s gaming liberalization. The contracts that brought American casino operators Wynn Resorts and Las Vegas Sands to Macau were signed in late June 2002.

Less than two years later, the first Vegas-style casino, Sands Macao, opened. Macau was on its way to becoming the world’s largest gaming destination, with more than five times the casino revenue of Las Vegas last year. Casino operators have pocketed billions in profits from their Macau operations.

It’s been an easy ten years since liberalization, but now Macau casinos face a difficult decade ahead. They must contend with increasing competition from other Asian gaming destinations and among themselves. There’s also uncertainty about the continued flow of players across the border from mainland China, by far Macau’s main market, as Beijing goes through a wrenching leadership change.

But most of all, the casinos must handle the uncertainty of license renewal. As I wrote in Asia Times, gaming concessions will expire by June 2022, giving the Macau government more leverage to demand more from the casinos now. There also a chance that licenses won’t be renewed for one or more of the current concessionaires, most likely an American one, and no clear timeline or guidelines on the criteria for renewal. For casinos, that adds up to a lot of gray hairs and brown noses in the decade ahead.

Totally globalized native New Yorker and former broadcast news producer Muhammad Cohen is author of Hong Kong On Air, a novel set in his adopted hometown during the 1997 handover about television news, love, betrayal, high finance, and cheap lingerie. See his bio, online archive and more at www.muhammadcohen.com.

Diversification with Macau characteristics

July 20, 2011

The Wynn Resorts quarterly earnings announcement released this week underlines a key difference between Las Vegas and Macau. It’s a difference that Macau casinos need to address, particularly because Beijing says so.

Net revenue for Wynn’s Las Vegas operations in the second quarter totaled $390.8 million. Casino net revenues were $158.3 million, meaning non-casino revenues – from rooms, food and beverage, retail and entertainment – represented $232.5 million, or 59 percent of total revenues.

(During the earnings conference call, Wynn Resorts founder Steve Wynn trashed President Obama. Wynn’s personal attack extended an emerging tradition for the billionaire mogul.)

In Macau, Wynn registered net revenue of $976.5 million. Gross non-gaming revenue totaled $94.6 million, or less than 10 percent of the total. That figure must rise, Chinese central government officials urge, and Macau’s government has made diversification a priority.

Don’t expect Macau to mimic the Las Vegas patterns for non-gaming revenue. Instead, look for diversification with Macau characteristics. What works in Vegas overwhelmingly hasn’t worked in Macau and may never succeed. My Asia Times article examines reasons behind those differences. Beijing will need patience to see significant changes in Macau’s non-gaming revenue percentage.

Totally globalized native New Yorker and former broadcast news producer Muhammad Cohen is author of Hong Kong On Air, a novel set in his adopted hometown during the 1997 handover about television news, love, betrayal, financial crisis, and cheap lingerie. See his biography, online archive and more at www.muhammadcohen.com.

Casinos make bad bets in Asia

May 7, 2010

The world’s two most expensive casino resorts are now open in Singapore, whether the Lion City likes it or not. As I wrote in Asia Times, Singapore didn’t want casinos, just the theme park, convention center, museums and other attractions that it was able to squeeze out the developers in exchange for allowing the gambling dens. However, Singapore’s nanny state ways limit casino revenue. That promises trouble for developers Las Vegas Sands and Malaysia’s Genting Group that are investing a combined $10 billion in their resorts, and for Singapore, too.

Singapore isn’t the only Asian city where casino developers are placing bad bets. Billionaire Steve Wynn’s infatuation with China’s government and disdain for the Obama administration got another airing at last month’s debut of his Encore Macau property. Wynn’s plan to plunk down another couple billion dollars in Macau illustrates precisely why to be wary of Macau, especially if you’re Steve Wynn.

Totally globalized native New Yorker and former broadcast news producer Muhammad Cohen is author of Hong Kong On Air, a novel set in his adopted hometown during the 1997 handover about television news, love, betrayal, financial crisis, and cheap lingerie.

Putting Your Mouth Where Your Money Is

August 15, 2009

Macau’s two biggest American casinos operators are making plans for share sales in Hong Kong, as detailed in my Asia Times report. Analysts are divided on whether the Macau operations of Las Vegas Sands, owner of the Venetian Macao, and Wynn Resorts are worth a gamble. Before placing their bets, investors might also want to consider the leaders of these two companies.

Wynn founder Steve Wynn and LVS chairman Sheldon Adelson are both self-made multi-millionaires. They also share an apparent conviction that success bestows skills beyond their fields of apparent expertise.

Adelson fancies himself as a master of repartee. During LVS’s earnings conference call, according to the transcript from www.AlphaRising.com, one analyst trying to discuss that possible stock offering (or IPO for initial public offering) prompted the following exchange:

Analyst: What is the earliest you think you can do something in Hong Kong?
Adelson: What do you mean do something in Hong Kong? You mean go to have dinner there?
Analyst: Well, you will probably do that pretty soon. You probably…
Adelson: We have great Chinese restaurants…

Adelson loves showing off his conviction that he’s the cleverest guy in the room. In BBC interview just after LVS’s close escape from bankruptcy last year, reporter Sharanjit Leyl asked about financing the Marina Bay Sands in Singapore, the most expensive casino resort ever built, price estimates reaching US$8 billion. Adelson brushed aside the inquiries. When Leyl rephrased the question to ask about his “problem with money,” a visibly annoyed Adelson replied, “I don’t have a problem with money. We don’t have any arguments, any confrontations. Money and I get along very well.”

Steve Wynn wouldn’t talk about his company’s IPO filing during his conference call with analysts last month, but he opted to play talk radio demagogue. “Right now we are watching the United States government deal with complex problems that clearly seem to be beyond their intellectual ability,” Wynn said. “Right now, we are more afraid of Washington than we are of the economy.”

Denouncing “bombastic rhetoric from the White House and from the administration,” Wynn said, “There is an attitude that, there is a very definite bias in this administration that business is bad… The President of the United States has his own office and he has his own group of little cadre of people that agree with him and look at the world just the way he does and they don’t listen to anybody from what I’ve heard from my business friends. They invite people down to Washington and tell them what they think, they don’t ask or listen to anybody.”

In this conference call meant to discuss company earnings and business prospects, Wynn went on to praise China – “maybe we could all learn a lesson by watching what happens there…. but I’ll bet you that government sees to it that economy and that workforce is protected” – and Macau’s incoming Chief Executive Fernando Chui Sai-on, who was chosen to run unopposed in a backroom deal and endorsed by the 300 electors (also chosen in an unopposed election) voting for Macua’s leader in the local Beijing-approved version of democracy.

Chui is a member of the cabal of families that have dominated Macau for generations. His candidacy sparked outrage among grassroots Macau, including a protest ad that had to be run in Hong Kong newspaper because no Macau publication would dare risk the wrath of the entrenched elite.

From Macau’s handover to China in December 1999 until this May, Chui served secretary for social and cultural affairs, reportedly using his position to enrich family business interests. Chui undeniably did little to improve Macau dismal social services, most notably healthcare, Chui’s area of academic training including a US PhD, despite Macau’s vast government surpluses thanks to the casino boom. People in Macau at best see Chui as an empty suit fronting for big business interests (which, given a chance to do it again, would have never let Wynn or Adelson into Macau), more commonly as a not particularly smart or honest empty suit.

But for Steve Wynn, Chui is a heroic figure. Contrasting Chui with the US leadership, Wynn praised Chui for “understanding issues that affect people” as well as exemplifying the “the level of education and sophistication that permeates the Chinese, the People’s Republic of China government.

“These are very smart people, very highly educated people, very thoughtful people. My own feeling is the government of Macau will protect and so will the central government in Beijing and the regional government in Zhuhai at Guangdong province, Guangzhou. The government will do a very enlightened and thoughtful job of protecting the interest of the citizens and the business enterprises that support the health of those businesses.”

Yet, no matter how lavish their praise for China’s government, Wynn and other international investors in China never get around to trading in their passports for Chinese citizenship.

Totally globalized native New Yorker and former broadcast news producer Muhammad Cohen is author of Hong Kong On Air, a novel set in his adopted hometown during the 1997 handover about television news, love, betrayal, financial crisis, and cheap lingerie.


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