Wynn Palace (pictured), a new US$4.2-billion casino resort in Macau’s Cotai district opened by Wynn Macau Ltd on August 22, seems to be experiencing a “slow ramp-up” of its mass-market gaming operations.
So said a Monday note from Japanese brokerage Nomura.
“Our visit to Macau last Friday and [impressions] on several previous visits all point to a slow ramp-up at the Wynn Palace’s mass gaming area,” said the institution.
The brokerage added, referring to a senior executive at Wynn Macau Ltd’s U.S.-based parent: “Wynn Resorts Ltd’s chief financial officer (Steve Cootey) also indicated, in our meeting two weeks ago, that the mass gaming at Wynn Palace has been ramping up slowly, similar to previous new openings.”
The institution stated, referring to another new Cotai property – the US$2.7-billion Parisian Macao, opened by rival casino operator Sands China Ltd on September 13: “The mass gaming traffic at Wynn Palace was also notably lighter, compared to the newly opened Parisian, though it is worth noting that the table minimum [bet] at Parisian was also significantly lower”.
On Friday it was announced that Gamal Abdelaziz had resigned as president and executive director of Wynn Macau Ltd with effect from that day.
The executive – also referred to in company communications as Gamal Aziz – was hired in January 2013 by the casino group’s founder Steve Wynn, to drive the development of Wynn Palace.
“His resignation within two months of the official opening of Wynn Palace… could very likely hint at a disappointing ramp-up of the Wynn Palace,” stated Nomura in its Monday note.
Brokerage Sanford C. Bernstein Ltd said in a Monday note on Macau that the management reshuffle at Wynn Macau Ltd might indicate “Wynn’s strategy of running the two Macau properties as separate entities is not working”. It added it had a “positive view” of Mr Abdelaziz’s replacement, Ian Coughlan.
Since 2007 Mr Coughlan has been president of Wynn Resorts (Macau) SA, the local unit that holds the Wynn group’s Macau gaming concession. Wynn Macau Ltd’s first resort in the local market – Wynn Macau on the city’s peninsula – opened in September 2006.
Nomura said in a separate note on Monday, regarding Macau’s market outlook during the Golden Week holiday period surrounding China’s National Day holiday on October 1, and referring to data from Ctrip.com, a Shanghai-based online travel agency popular with Asian consumers: “While hotel room rates saw a 119 percent to 147 percent uptick (versus a normal week), none of the hotels in Cotai were fully booked.”
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"We [estimate] that these illegal [currency exchange] transactions account for somewhere between 50 percent to 60 percent [of Macau's annual gross gaming revenue]”
Managing partner at IGamiX Management and Consulting