GGRAsia – Nevada to study Galaxy Ent stake in Wynn Resorts: report

Nevada to study Galaxy Ent stake in Wynn Resorts: report

Mar 26, 2018 Newsdesk Latest News, Macau, Top of the deck

The Nevada Gaming Control Board is to consider Macau casino operator Galaxy Entertainment Group Ltd’s decision to acquire an approximately 4.9 percent stake in Wynn Resorts Ltd, the latter a casino firm operating in and regulated by the U.S. state, reports Bloomberg, citing an email from the Control Board’s chairwoman Becky Harris.

Wynn Resorts is the parent of Macau gaming operator Wynn Macau Ltd.

In Nevada, those owning more than 10 percent of a casino business must meet “suitability” requirements according to the Bloomberg report. Ownership of between 5 percent and just under 10 percent must be reported to the Control Board, according to Bloomberg’s narrative.

The business news outlet said that, although Galaxy Entertainment’s stake fell short of the automatic reporting rule, the Control Board had discretion to scrutinise stakeholders owning under 5 percent of a casino business.

In a Friday statement, Macau’s regulator, the Gaming Inspection and Coordination Bureau, also known by its Portuguese acronym, DICJ, had hinted that Galaxy Entertainment’s move for the Wynn Resorts stake did not breach a local law which says that neither a Macau gaming concessionaire, nor any Macau gaming concessionaire’s shareholder with a stake of 5 percent or more in that business, can control a stake of 5 percent or more in any other local gaming concessionaire, be it directly or indirectly.

The acquisition of Galaxy Entertainment’s stake coincides with the exit of Wynn Resorts’ founder and former chairman and chief executive Steve Wynn as a shareholder of that group; a process that began with his resignation in early February following allegations of sexual misconduct.

Wynn Macau Ltd said in its annual report filed with the Hong Kong Stock Exchange on Friday: “The resulting controversy related to Mr Wynn and his separation from the group could significantly harm our business in numerous ways, including in ways that we cannot predict. The DICJ, our gaming regulator in Macau, is monitoring and reviewing the situation, and we are cooperating. Additional allegations have been and may in the future be asserted against Mr Wynn.”

In other developments, on Friday the Wynn Macau board declared a special dividend of HKD0.75 (US$0.0956) per share payable to shareholders whose names appear on the register of members on April 16, 2018. The firm did not pay a special dividend in 2017.

Analysts DS Kim and Sean Zhuang of JP Morgan Securities (Asia Pacific) Ltd said in a Sunday note on Wynn Macau Ltd: “Including its interim [dividend] (HKD0.21), this represents a 134 percent payout and a 3.5 percent yield. Going forward, we forecast its dividend to grow at 20 percent-plus every year, suggesting its dividend yield can rise to over 6 percent by financial year 2020.”