The recent shareholder reshuffle at U.S.–based casino operator Wynn Resorts Ltd – the parent company of Wynn Macau Ltd – will “not have an impact on Macau’s gaming sector,” said on Friday the city’s casino regulator, the Gaming Inspection and Coordination Bureau, also known by its Portuguese acronym DICJ.
The regulator stated in a press release it would “continue to closely monitor the situation, analysing and evaluating new developments, in order to ensure the sustainable development of Macau’s gaming sector.”
It was announced on Thursday by Wynn Resorts that Macau casino operator Galaxy Entertainment Group Ltd was acquiring an estimated 4.9-percent stake in the former. Wynn Resorts also announced on Thursday that the company’s ex-chairman and chief executive Steve Wynn had reached an agreement with “two long-term institutional investors, both of whom are currently investors in Wynn Resorts”, to sell his remaining shares in the company.
In its Friday statement, the Macau casino regulator said it had been informed beforehand by the Wynn group of Mr Wynn’s intention to sell his shares in Wynn Resorts.
The Macau government “has been closely following up these events and has held multiple meetings with [Wynn Macau Ltd], maintaining close communication” on this matter with the firm, the DICJ statement said.
The document did not directly mention the acquisition by Galaxy Entertainment of a holding of almost 5 percent in Wynn Resorts. But the release did state that, “with the information currently in hand, there has been no breach of clause 10 of article 17 of Law 16/2001.”
The statute 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.
In a note issued on Friday, brokerage Sanford C.Bernstein Ltd said that the acquisition of Wynn Resorts shares by Galaxy Entertainment was an “important” event to both the Macau gaming industry and to the broader gaming market.
“Wynn Resorts and Galaxy Entertainment may be looking at collaborating on future development opportunities in Asia, with Japan being the critical development initiative,” said analysts Vitaly Umansky, Zhen Gong and Cathy Huang of Sanford Bernstein.
They added: “By jointly bidding for Japan (along with Japanese partners) the parties would be much stronger contenders together than separately. Such a joint bid likely would not have occurred under Steve Wynn.”
Both Galaxy Entertainment and Wynn Resorts have shown strong interest in bidding for a gaming business in Japan, as local authorities move to regulate casino gambling in the country.
The Sanford Bernstein note also said that Galaxy Entertainment “may use its 4.9 percent stake as a potential blocking party/influencer of any future attempted acquisition of Wynn Resorts”, or became “a potential acquirer of Wynn Resorts/Wynn Macau”. The brokerage described Galaxy Entertainment as “one of the few gaming companies that would have the financial wherewithal to execute” a potential purchase of Wynn Resorts.
“We do not believe that Galaxy Entertainment would be a buyer of Wynn Resorts in totality, but with China/Macau government approval a Galaxy Entertainment acquisition of Wynn Macau Ltd assets would create the leading Macau gaming company,” the brokerage said.
The institution added that if an acquisition of Wynn Macau Ltd by Galaxy Entertainment were to occur, the former’s gaming concession could be given or sold to a party approved by the Macau government, or simply be eliminated.
Allan Zeman, chairman and independent non-executive director of Wynn Macau Ltd, told Hong Kong media i-CABLE News Channel on Friday that Galaxy Entertainment and Wynn Resorts “could cooperate on potential projects in the future”.
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”We do not believe that reopening the advance notice nomination deadline [for board directors] is appropriate or justified”
Daniel Boone Wayson
Chairman of the Wynn Resorts board of directors