Jun 21, 2019 Newsdesk Japan, Latest News, Top of the deck
Wynn Resorts Ltd chief executive Matt Maddox says the group has more than one location in mind for the casino complex it hopes to build and run in Japan. But it already has a consortium partnership for Japan, Mr Maddox (pictured in a file photo) said in an interview.
“We are looking at multiple cities. So, we’re not just saying we’re going only after one city,” Mr Maddox told said in an interview broadcast by the U.S. business news television channel CNBC on Thursday.
United States-based Wynn Resorts – opening on Sunday its US$2.6-billion Encore Boston Harbor project in Massachusetts in the U.S. – already has an Asian casino operation in Macau, via Wynn Macau Ltd.
Mr Maddox said the consortium Wynn Resorts planned to work with in Japan would be among the best of the competitors for a casino licence there, he said. He did not identify the entities in the consortium.
He did, however, acknowledge that Wynn Resorts has been more reticent about its effort to obtain a licence than some of its rivals. “We’ve been working on this for eight years. And we typically like to play a little more low-profile,” he said.
“What I love about our strategy in Japan is we are known as the high-quality operator. What we deliver is excellence.”
Wynn Resorts has previously said it would spend more than US$4.4 billion on a casino resort in Japan.
Last month, Wynn Resorts Development LLC president Chris Gordon told an industry gathering in Tokyo that the company would expect to spend more in Japan than it did on Wynn Palace in Cotai, Macau. The latter venue cost US$4.4 billion according to company information and opened in August 2016
Wynn Resorts makes most of its group gaming revenue from its Macau casinos and Mr Maddox suggested in his Thursday remarks that the VIP gaming segment had improved there.
“In the third quarter of last year I was actually the first CEO in the business to say that there could be softening in the VIP segment. And we have seen that. However, it has stabilised over the last two quarters,” he told CNBC.
He said the Wynn Palace and Wynn Macau casino resorts in Macau were well-positioned to “capitalise on any market condition”.
“The VIP slowdown began because of the various issues in China, the slowdown in China,” Mr Maddox said, referring to the economy of mainland China, the main feeder market supplying gamblers in Macau’s casinos.
“The one thing that we’ve found is customers will slow down [their] behaviour when there’s uncertainty in economies. But it always comes back. People love the business of fun, which is what we do.”
The VIP segment remains an important driver of Macau casino gross gaming revenue (GGR) despite expansion of the mass segment, according to most investment analysts.
Several industry insiders have nonetheless suggested Macau GGR performance will trend downward in the second half of this year as macroeconomic uncertainty – including the U.S.-China trade tussle – continues.
Encore Boston Harbor is seen as an important piece of infrastructure to accrue earnings growth for Wynn Resorts, but “Macau is the more important value driver” for the company for the parent firm’s stock, the Nomura banking group said this week.
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”The [Macau] month-to-date run-rate represents an approximately 45-percent recovery versus pre-Covid-19 levels for headline gross gaming revenue”
DS Kim and Mufan Shi
Analysts at brokerage JP Morgan Securities