Macau govt proposals practical not punitive: Wynn CEO
Recent proposals on the future regulation of the Macau casino industry were “not punitive” but “practical,” said Matt Maddox (pictured in a file photo), chief executive of Wynn Resorts Ltd, the U.S.-based parent of Macau casino operator Wynn Macau Ltd.
He was speaking to TV host Jim Cramer on business news channel CNBC.
“I think what’s going on in Macau is not punitive, it’s practical. They’re moving to a really highly-regulated environment, just like we experience here in the United States,” Mr Maddox stated in the interview aired on Thursday.
On September 15, Wynn Macau Ltd – which runs the Wynn Macau and Wynn Palace resorts in the city – saw nearly 29 percent of its stock value lost in a single day, ending at HKD6.40 (US$0.82).
The decline coincided with a Macau government announcement the day before, about proposed changes to that city’s legal framework for the casino industry, including that the Macau government would need to approve Macau operators’ dividends, and that the government would use a delegate system to supervise each operator.
Referring to the group’s presence in Macau, Mr Maddox told CNBC: “We employ 15,000 people there. We’re good corporate citizens, and I have a very, very bullish view of the future of Macau and what we’re going to see going forward.”
A memo from Bloomberg Intelligence analysts Angela Hanlee, Cecilia Chan and Kai Lin Choo, made available on Friday, discussed the outlook for Macau’s current six casino licensees – and in particular those with United States-based parent companies – in terms of staying in the Macau market after the current permits expire in June next year.
Macau casino operators with “high dividend payouts and large exposure to foreign ownership versus peers may be subject to less-favourable terms” in their effort to remain in the local market, said the analysts.
Sands China Ltd, controlled by Las Vegas Sands Corp, and Wynn Macau Ltd, controlled by Wynn Resorts Ltd, “paid 109 percent and 100 percent of their net profit as dividends in 2018,” said the Bloomberg team.
The memo added: “Amid ongoing Sino-U.S. tensions, generous dividends might be interpreted as having low commitment to Macau’s development, potentially prompting local authorities to impose stricter rules for Sands China and Wynn Macau, such as diluted ownership from their U.S. parents, a larger lump-sum tax than peers, higher requirements for capital investment, or restrictions on their payouts.”
On September 20, Capital Group Companies Inc, a Wynn Macau Ltd shareholder, reduced its stake in the company for HKD102.5 million gross, or nearly US$13.2 million, according to information disclosed to the Hong Kong Stock Exchange.
The day after the stock price correction seen for Wynn Macau Ltd, the firm said it had obtained a revolving loan facility totalling US$1.50 billion, “to refinance certain indebtedness of the group,” and “to fund ongoing working capital needs and for general corporate purposes”.
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