Two Way Hard Three | Las Vegas Casino & Design Blog

Wynn Resorts Ltd. reported their third quarter 2006 results today. This was an important quarter for the company as it included the first, albeit small, amount of operations from their second property, Wynn Macau. Also, a large one-time gain from the sale of a Macau sub-concession to PBL put a nice bit of cash into their pockets.

Net revenues for the quarter were $318.1 million. This is up 26.5% from the same quarter in the prior year. Net income for the quarter was $715.7 million but most of that is the one-time event related to the sub-concession.

The net loss has been reduced from $2.2 million last quarter to $1.3 million this quarter. EBITDA was $79.6 million, up 8.7%. I don't have the analysts jive in front of me but I think this is pretty close to what they were predicting.

Wynn Macau, operating for 25 days this quarter, generated net revenues of $45 million and EBITDA of $2.3 million, 81% of which came from table game play. ADR at Wynn Macau was 75.9% and non casino revenues were $4.9 million.

The conference call at 3pm will be on the Web site and we'll be talking in the chat room, which is located here.

For a breakdown of Wynn's results:

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Read archived comments (81 so far)
November 7, 2006 2:34 PM Posted by Hunter

For some interesting comparisons, take a look at Wynn Las Vegas vs. MGM's supplemental, for instance, Bellagio.

Q3 2006

WLV ADR - $271
Bellagio ADR - $235

Bellagio REVPAR - $229

WLV Occupancy 94.9%
Bellagio Occupancy 97.2%

** ADR - Average Daily Rate (hotel metric)
** REVPAR - Revenue Per Available Room (hotel metric)

November 7, 2006 2:47 PM Posted by Hunter

It appears to me that if Wynn Macau had more normal hold percentages, they would have met expectations, no?

November 7, 2006 2:50 PM Posted by Brian Fey

Yeah Macau, did well, but they sure didn't get to keep much. We'll see what they have to say on the call.

November 7, 2006 2:55 PM Posted by Hunter

The relatively low occupancy in Macau, around 75%, is to me one of the most interesting numbers reported here.

The goal is to move Macau away from the day tripping market and into a resort destination and I understand that will take time but this number is actually softer than I had anticipated.

November 7, 2006 2:58 PM Posted by Leonard Stern

Before you guys decide to flame me once again here, I had earlier warned all of you that WYNN would report 'at best' flat earnings for Q3 2006 and as it turns out, I am 100% accurate based on my sources. Although their [WYNN] loss has narrowed from Q3 2005 earnings, the only reason that the company has enjoyed a +26.5% net revenue increase YTD is due ENTIRELY to the $900M sub-concession sale to Packer (PBL). Unfortunately, by the time Wynn Macau starts to generate any substantial positive revenue, Adelson's Venetian Macau will have already been launched, followed shortly thereafter by MGM Grand Macau (which BTW was an absolutely brilliant business maneuver by MGM/MIRAGE in co-venturing with Stanley Ho's daughter Pansy). Absent the sub-concession sale in Macau, WYNN would have otherwise reported a 'substantial loss' for Q3 2006. Considering that WLV has now been in operation for over a year and a half, the fact that WYNN cannot end up in the black by now has many analysts deeply concerned. At the current stock price, WYNN is valued at just under 80 times earnings and 16.5 times book value! WYNN is beginning to look like a major train wreck ready to happen. Now, don't say that I didn't tell you so!!! LOL

November 7, 2006 3:03 PM Posted by mike_ch

As a non-investor type the only thing that I could make sense from in your comparison was occupancy. Although at one time it may have been within the bounds of exclusive, with the addition of the Spa Tower now Bellagio is a monster hotel that hangs with the likes of Luxor (which prior to this expansion boom held 2nd place behind MGM in rooms) and Caesars and MGM Grand when it comes to room count. Except Luxor is a mid-market place and Caesars/MGM serve multiple budgets (especially MGM) while Bellagio aims almost exclusively at the upper crust.

So, with this in mind, the fact that Bellagio is able to hold 97% occupancy is impressive to me. Wynn's occupancy rate isn't too bad, but then again, the only place has about as many rooms as Rio so I'm not surprised there.

As for the losses and financial projections, etc, I'll just do as always and enjoy watching the most optimistic spin.

November 7, 2006 3:05 PM Posted by Hunter

No question that the one-time gain is responsible for the uptick but I don't see where you get 'substantial losses' without it - it looks pretty flat to me, not a 'substantial loss'.

Also, looking at the numbers compared to Bellagio, WLV has some good looking numbers.

Which analysts are 'deeply concerned'? Are there any on the record citing that concern? How is the company being rated by these analysts? Hold? Sell?


November 7, 2006 3:07 PM Posted by Hunter

Bellagio's high occupancy given the size is really quite impressive and that's one of the things I talked about in the latest podcast.

'Spin' aside, some of these numbers look better for Wynn Resorts as far as I can see.

Wynn Las Vegas still costs too much to operate - they need to continue to work on costs there.

November 7, 2006 3:14 PM Posted by mike_ch

Leonard, I don't think Cotai is going to take off immediately. I'm not even sure if it'll ever become the pipe dream success people currently think it is, but that judgment is way down the line.

I agree with you that MGM Macau is a brilliant maneuver, and I remind you also that Stanley Ho is building the Grand Lisboa extension to his flagship hotel, and it's construction absolutely looms over the Wynn. Since most Macau players know of the Lisboa, I think it will draw a lot of appeal to Wynn's area from mid-level Chinese, and I think MGM and Wynn will probably assist each other in drawing high-roller people from Cotai. After all, MGM in particular as well as Wynn have quite a bit to offer the Asian whales in Las Vegas. MGM owns half the Strip, for goodness sakes, so they can comp away a lot of Vegas vacations for their richest players.

Venetian Macau, I don't see doing so well. I'm pessimistic on Cotai, admittedly, but even if it does eventually reach it's pipe dream status of Vegas Strip v2.0, it's going to have a rocky start. Venetian is sitting way out there on it's lonesome.

Furthermore, do you remember when Bellagio opened and all the Mirage's best players just shuffled down the street and resumed play, simply moving the same money around and cannibalizing the Mirage's business in the process? I can see Venetian doing the same thing to Sands Macau. That means they'll have to build players for Venetian AND rebuild clientele at Sands as well.

November 7, 2006 3:17 PM Posted by Hunter

I'm pessimistic on Cotai in the short term. Long term I think it will probably work but it's gonna take time.

Detroit and I have a bet over occupancy in the first quarter of Venetian Macau's performance. I believe he was saying over 90% while I think it will be more like what we're seeing here from Wynn Macau - in the 70s somewhere.

November 7, 2006 3:29 PM Posted by Hunter

For those interested, here is a page that looks at analyst recommendations for WYNN:

The average rating is 'OVERWEIGHT', the same as the average rating for LVS and MGM:



Anyway, it's clearly not a love-fest when it comes to the analysts and WYNN but from this it doesn't look like they are deeply concerned.

It seems like any concerns are for the sector, not really WYNN itself. Am I missing something here? I have a BA in economics and finance but I'm no stock analyst.

November 7, 2006 3:35 PM Posted by Hunter

Regarding the low occupancy in Macau, I am listening to the call and Steve Wynn just addressed it.

He claims that part of that low number is Wynn Macau keeping some of the suites (he said 50 rooms) empty as they try to figure out people's stay-and-play habits.

I don't know if I buy that or not. Next quarter those numbers should be up if this is really what is going on here.

They did cite strong restaurant activity, which was an area that some folks had pointed out could be tough to get people to go in for a high end meal.

November 7, 2006 3:47 PM Posted by Leonard Stern

I completely dsagree with you guys regarding the future potential of the Cotai Strip. By the time that [less than 50%] of Adelson's grand plan for Cotai is actually realized/constructed, the infrastructure and transportation issues that currently exist in Macau will have already been addressed by the Chinese government. As far as Stanley Ho is concerned, his personal monopoly there in Macau is (or will soon be) effectively over for good, long-term, regardless of his plans to expand the Grand Lisboa, despite his recent announcement for grandiose projects designed to try and attempt to compete with Adelson's 'invasion'. The MGM/MIRAGE alliance with Ho's daughter will provide the necessary link, in a major way, by melding his [Ho's] vast family investments into the mainstream with a major first-rate #1 operator. From what I understand, Ho's current existing properties in Macau are already showing signs of struggle in order to keep up with the new "big boys" from overseas - and the game has only just begun.

November 7, 2006 3:52 PM Posted by Hunter


To clarify, I'm talking about the immediate term when The Venetian Macau opens next year. That's when I'm still not sure that they will have 90%+ occupancy in their first quarter.

Long term, 2010-2011 and beyond, I am much more confident about Cotai.

So, I'm not sure that we do in fact disagree in that I'm talking about the next one to two years and it sounds like you're talking about three to four years from now.

November 7, 2006 3:55 PM Posted by detroit1051

I'm also listening. Steve makes me uncomfortable. He often turns these calls into casual, conversations without hard data. He is too folksy for me, and I infer Binion and others on the call are reluctant to speak up. A big contrast to MGM's call with Lanni and Murren.
I did like Steve's comment on Wynn Las Vegas performance factoring in number of rooms compared to others with 50% more rooms (Bellagio). Also, Steve said when Encore is done, they'll be ready for the golf course.
In the earnings release, it said Wynn Las Vegas typical slot win is 5-6%. That's got be be a couple points better (for the player) than MGM casinos.
Steve is now saying for the second time that they're still fine-tuning Encore's "enhancements."
Note to Leonard: I still like Wynn, the property; I haven't given up on the company.

November 7, 2006 3:57 PM Posted by Hunter

Something I talked about in my podcast was how good Murren at MGM Mirage is on these calls. He's a total pro.

Wynn's very informal. I didn't hear it but I have read about a strange call he had back in 1996 or so where he started singing songs (?!?!) from some musical he wanted to put in? Anyone know more about this? Sounds insane.

Regarding Encore, looking forward to seeing what these changes are.

November 7, 2006 4:01 PM Posted by Brian Fey

Wow! I am impressed. What a great call. Wynn is an amazing speaker on the fly. This company really has their sh*t together!

November 7, 2006 4:23 PM Posted by detroit1051

In 1999, Wynn allegedly started singing songs at an analyst meeting in NYC from a new show he wanted in Vegas, "Miss Spectacular". He was ridiculed in the NY Post, and I was never sure whether he did or didn't sing. However, it cost Steve some credibility. Here are two LV Sun stories:

Vegas would be a lot more boring without Steve Wynn. His properties are the reason I fly out so often.

November 7, 2006 4:25 PM Posted by mike_ch

Leonard, although Lisboa and the other Ho legacy casinos don't stand much of a chance competing against the US imports feature for feature, they don't have to. They're mid market properties. Vacationing Hong Kongers are not staying at Wynn, the businessmen and whales are.

Your average middle class tourist in Macau who has visited a few times probably has some comp reputation and loyalty to the Ho legacy places, and while they may go mingle at the fancy American imports they don't have the budget to recognized at the tables by Wynn. They don't have the budget to stay in the five-star superluxury hotels that Sheldon plans to join him on the Cotai strip. Details on MGM's property is unknown, but it will probably be a lookee-loo focused on poaching sharks like Wynn.

I don't buy the Cotai Strip thing for a number of reasons. The first is just a bias towards the marketed goal of cloning Las Vegas Blvd in Asia, but beyond that is again the laser-like focus on big spenders. The Cotai Strip does not appear to have a Flamingo or a Barbary Coast, so to speak, and I also doubt whether people want a walkaround outdoor gambling mall in that climate.

I think a CityCenter mixed-use project in Macau would be interesting and probably quite profitable, but for Sheldon's little strip recreation with his multiple casinos and Cirque shows and celebrity chefs, I'm not so sure.

November 7, 2006 4:39 PM Posted by mike_ch

LV Sun:
"As the hardened Wall Street numbers-crunchers watched and listened in dismay, Wynn belted out three of the showstoppers -- sometimes singing, sometimes just lip-synching with the tape, according to one eyewitness," the Post said.

What the... This kind of history is at the source of my skepticism regarding Wynn The Company. I'm not convinced that Wynn The Guy knows what he's doing when it comes to being a businessman. Ideally he needs some sort of equal who can put on an honest press face and convince the serious folks in the audience that despite the hoopla the company is still grounded in reality.

Steve reminds me of Walt Disney at times in that he also dreamed up these big absurd ideas and would enthusiastically pitch them to companies who probably thought he was a madman when they say the concept (I have 1960s video somewhere made for GE where Walt talks about a World's Fair exhibit being built for GE and, just like Steve, starts singing the soundtrack for the planned pavilion.) Except Walt's brother was his bank and finance guy to the end, and since Steve started handling the business end of things near the end of Mirage, people have thought he's a little crazy.

Wynn The Company needs someone to speak on it's behalf who is more in tune with the analyst audience instead of trying to be the warmest host in the gaming industry.

November 7, 2006 4:46 PM Posted by Leonard Stern

Detroit, I'm not trying to suggest that you "give up" on WYNN, however, long-term Steve will end up digging another major hole for himself as he has so eloquently demonstrated in the past, there is absolutely no question about it - just a matter of time. With respect to the initial occupancy figures for Venetian Macau, when it opens next year, I wouldn't expect initially that it will be able to support a 90% occupancy rate right out of the gate. If it does anywhere close to 75% for the first several quarters, it will have proven itself to be an 'unbelievable success'. One must consider the size and scope of the Venetian Macau property (room count + total square footage) when compared to anything there right now. I don't imagine that Adelson is overly concerned if the Venetian Macau is not an immediate success (by Las Vegas standards) when it opens or not given the ongoing infrastructure problems and all in Macau, understand that he [Adelson] can personally write a check for that whole damn project right now as a complete right-off, if he so desires, due to his incredible wealth and not even blink!. This is what separates the "big boys" from the wannabe's like Wynn. The Adelson family controls something like 88% or so of LVS stock. Historically, relative to the gaming industry in particular, he who has the most resources ALWAYS wins at the end! Hunter, it doesn't take a mathematician to figure out, absent the $900M sub-concession sale to Packer reported during that period, that the WYNN Q3 2006 results would have otherwise been dismal to say the least. True and actual reported financials never lie...

November 7, 2006 4:50 PM Posted by Hunter

I guess we all have different definitions of 'dismal'.

November 7, 2006 5:02 PM Posted by mike_ch

Just because Sheldon is rich doesn't mean he can afford failure. GM still sells more cars than anybody else but they can't afford to make any more mistakes.

November 7, 2006 5:11 PM Posted by detroit1051

Mike_ch, I liked your Walt Disney reference, and I sure agree Steve needs someone who is respected by or at least a good communicator with the analyst community. That's where Dan Lee was so strong as Wynn's CFO at Mirage Resorts. Dan Lee was excellent the other day on PNK's call.

November 7, 2006 5:42 PM Posted by Brian Fey

OMG, you're joking right? Do you realize that a $10,000 investment in Mirage Resorts was worth $4 Million when he sold it?
I think someone is just bitter because they didn't buy Wynn years ago, and now its too high to get into now. I'm in this thing at under $17 a share, and I have a ton. 5 years from now, you'll wish you too owned this stock. Wynn is going to take a major amount of business from LVS, i guarantee it!

November 7, 2006 5:44 PM Posted by Leonard Stern

mike_ch: I actually couldn't agree with you more in connection with your post re Steve Wynn, The Company, etc. I'm somewhat surprised in that you are basically reiterating eveything that I have been saying all along and trying to get across to you guys here. As far as GM is concerned, look for Kerkorian to make a major play for the whole company in due time, even though he only controls 9.9% of the stock through his Tracinda Corp., the fact that he has just recently removed his inside man from the Board of Directors of GM means there is no doubt he is planning an all out assault for a major takeover when the time is right. Kerkorian is one of the most savvy businessmen in history, and believe it or not, he never even graduated from high school! Actually, Adelson's personal wealth is continuing to grow at such an unprecedented rate, when considering his vast future Macau investment plans which will only just make him a whole lot richer, he can indeed "afford failure" without even batting an eyelash. If Steve makes one more major false move, he's toast! That's the real difference in what separates the men from the boys in this game...

November 7, 2006 6:37 PM Posted by Leonard Stern

Brian Fey, I assume that you are referring to having been a shareholder of Mirage Rssorts back in 2000. Well, if you consider that the stock had the potential of breaking 50+ before Steve mismanaged the company with unchecked overspending, whereby it ultimately tanked at 10 when Kerkorian thankfully gobbled it up at 21 to save the shareholders' asses, all of this went against the "self-proclaimed genius" [Wynn's] objections, I guess if you paid 17, you owe any profit you made on that stock to Kerkorian, don't you?. If you are referring to WYNN, when the IPO officially was offered at 17 (not less) since Steve's roadshow failed to impress Wall Street or any major institutional investors with his unsuccessful attempt to peddle the offering while anticipating a ridiculous opening IPO of like 25. The fact is, many people in the know simply no longer have confidence in Steve Wynn, period!!!

November 7, 2006 7:23 PM Posted by Devon

Leonard, Wynn Macau was very unlucky in it's first 25 days because it only won 1.9% of table revenue. If Wynn were to have won 2.5%-2.8%(what was expected), they would have reported earnings of over $0.08, topping Wall Street expectations.

November 7, 2006 7:56 PM Posted by Pikes

Rumor: Steve Wynn To Buy New Frontier

November 8, 2006 7:39 AM Posted by Brian Fey

I have owned MIR, and currently own Wynn. Its amazing people "in the know" have lost confidence in Wynn, cause the stock is up almost $3 right now!

November 8, 2006 10:02 AM Posted by Leonard Stern

Well, maybe let's all just wait for the WYNN Q4 2006 earnings report (that will unfortunately NOT reflect the sub-concession sale to PBL - which has more than SUBSTANTIALLY CONTRIBUTED to their Q3 revenues). Even with the expected positive revenue growth from the Wynn Macau property during the Q4 period, the company is now seriously under pressure to perform and actually become PROFITABLE!. WYNN is considered to be grossly OVERVALUED at the present time, and yes, "by those in the know", as I had reported earlier here, based on the current share price, WYNN is valued at close to 80 TIMES EARNINGS and over 16 times BOOK VALUE. What part of 'overvalued' do you not understand, Brian?

November 8, 2006 10:06 AM Posted by Hunter

So, Leonard, does that mean you think that it is time to dump Wynn Resorts stock and that a decline is inevitable?

Is that your plan for your shares?

November 8, 2006 10:11 AM Posted by Leonard Stern

Here is an article (which I'm sure many of you who follow WYNN have already seen) appearing in today's R-J that clearly points out the sub-concession sale to PBL by WYNN literally "saved the third quarter for Wynn Resorts, Ltd."

November 8, 2006 10:36 AM Posted by Leonard Stern

Hunter: As you are aware, I am personally not a stock broker nor an analyst, but from what I have been advised by "those in the know" (sorry, but I just have to keep saying that!), WYNN is expected/predicted to reach a share price cap at between 81-85 'at best' and then experience a consistent decline therafter. If it were me, I would wait just before the Q4 earnings report and dump all of it at the overvalued current price before it completely tanks and will then be too late to recover. For those who are in it for the long-term, it inevitably will require a very long time to return to anywhere near the current share price, if at all, so I'm told by "those in the know".

November 8, 2006 11:09 AM Posted by Brian Fey

Leonard - I am simply speechless. Jack Binion, who many reguard as one of the most brilliant people in the business, just bought millions of shares, and he paid full price about $70 per share. He didn't just get options. Wynn, Okada, Binion, are all in the Billionaire club, their personal wealth is relying on this company. Bottomline is, I trust them! I have faith in them. At the end of the day, Wynn just builds a better mouse trap!

November 8, 2006 12:12 PM Posted by Leonard Stern

Brian, you won't hear any argument from me regarding Jack Binion, he is truly one of the great veteran gaming operators of all time and Steve NEEDED HIM DESPERATELY in order to SUCCEED in Macau, stickly from Binion's ability to allure high roller wealthy Chinese whales, from a gambling perspective, to that property. I can assure you that Jack's take in the deal overall for the 'privilege' in availing of Binion's expertise through that co-venture arrangement as head of Wynn's international properties [Macau]came at a really hefty price, irregardless of the number of shares in WYNN he [Binion] purchased and was also offered. This deal is widely expected to significantly impact Wynn Macau's earnings in a major way. Steve is a micromanager in the worst way, and quite frankly, not the best businessman out there when compared against his direct-market competition. Although he has very competent executives at his disposal to operate WLV, because of Wynn's infamous flawed management style, they are effectively nothing but "yes men" because Steve simply refuses to delegate major responsibilty and decisions to ANYBODY. Compare that to Kerkorian who relegates full control of his companies to the best chief executives obtainable (i.e. Terry Lanni and, for 30 years, the late Fred Benninger who really was the major impetus (albeit a "bean-counter" extraordinaire) to Kerkorian's incredible success and rise to become the top gaming operator of all time. Even though Adelson himself has been accused of micromanagement, his executive team is also top-drawer and [Adelson] is much more willing to delegate responsibility to those whom he has placed such confidence in. It's fair to say that Adelson has more on his plate these days then when he built the original Venetian. His [Adelson's] business acumen has already been put to the test - Steve Wynn has yet to prove himself and the jury is still out on WYNN achieving great success as a public gaming enterprise with him at the helm unless he is somehow capable of drastically modifying his management style - not very likely when given his bloated ego and insistence by immersing himself in every single minute detail + aspect in the development of his projects.

November 8, 2006 1:23 PM Posted by MARLYMARR

Yikes!! Too much bitterness from that guy. Anyway i enjoy reading everyones thoughts, good or bad. I'm a Wynn fan and am eagerly awaiting them to turn a profit from operations but i think that deal was mind blowing. No one else thought to sell there subconcession for that price, MGM would have paid the premium if that was what it took to gain entry.
I'm really curious as to what he is going to do with that money, any guesses?

One thing i would really like to understand is why they haven't done more to curb overhead at Wynn LV? I would assume they must really have a good idea of where they are going. I mean to dissapoint Wall street for soo many quarters, they better have a darn good master plan.

There have been many naysayers in the past that have said Wynn can't pull it off; but it's only a matter of time before they are proven wrong "again". I'm going to sit tight with my shares and ride the ride.

November 8, 2006 1:24 PM Posted by Devon

"It's a lot of below the line stuff," said Joseph Fath, a portfolio manager at T. Rowe Price Associates, which owns Wynn shares, explaining the difference between Wynn's results and Wall Street's forecasts. "It's meaningless in this company because it is a development-stage enterprise."-source: Reuters

Leonard, this analyst doesn't really think that Wynn is under too much pressure to preform. Do have any articles that list ones who are concerned, any ARTICLES and not people "in the know."

November 8, 2006 2:42 PM Posted by mike_ch

Leonard, when I say that Adelson can't afford failure, I'm not saying he can't afford to personally buy out a flopping hotel that he has faith in. I'm saying that it does damage to the company because once you have a failure, your audience sours. When the audience sours, they become skeptical of your next project and when the audience is cynical the project won't do so well, etc. Witness how the Harrah's ownership of Rio caused everyone to become a skeptic about their next plans, and how the takeover of Caesars caused a strong uptick in whales window-shopping for a new home.

So just because Sheldon can buy a large island nation as vacation home, it doesn't mean Las Vegas Sands can withstand a big flop.

I think we can both agree that Adelson uses as much hype and hoopla as Wynn does when it comes to talk about how great his hotels are. The difference is that Wynn arguably tries to build something that will meet the hoopla, even if it's not good business sense; while Sheldon's places are perfectly acceptable hotels marketing themselves with a best in the world image. It's almost like he's trying to prove an adage that if you can actually be superior on the sole premise of your advertising.

Granted, Venetian LV is all I've seen, and it's not THAT BAD of a property and it was rightfully impressive as a sort of better-designed twin to Caesars. But there is definitely room for improvement, and I'm willing to give the guy a fair shake and see if he learned his lessons with Palazzo.

I don't think WYNN is doomed to failure, but I don't think it'll reach it's full potential without some executive reshuffling. The reason? Well, again, everyone is skeptical after the last failure.

November 8, 2006 3:59 PM Posted by Leonard Stern

mike_ch: Let's try and put it this way, so far Sheldon has been batting a thousand from the very day he sold COMDEX, which was at the most opportune time possible, for a ton of dough (the new owners of COMDEX subsequently ended up filing for bankruptcy protection several years later). Adelson was then able to parlay several hundred million dollars from that sale into a personal net worth of $20.5+ billion dollars after the LVS public offering, all within less then ten years time! Granted, his approach to the future of high-end massive gaming mega resorts was unique in that he initially targeted the convention clientele as a foundation (which he understands better than ANY operator out there), and if I recall correctly, even the 'Golden Boy' Steve Wynn criticized Adelson's early plans for the Venetian as though his concept was entirely off the mark and would have a hard time succeeding. Well, with the completion of Palazzo, the Venetian and related venues will not only be the largest hotel in the world at over 7,000 rooms, but actually is expected to be the most profitable, per actual gross square foot in terms of maximizing revenue. With LVS recent announcement of a 50 storey super-luxury residential component, that property will be making so much money compared to WLV (on a square foot basis) the two aren't even comparable. Remember that Encore is way behind Palazzo in terms of construction completion and its integration into the existing project will suffer the usual [Wynn] design flaws and, for an absolute certainty, excessive cost overruns before it is actually launched. Adelson is known for bringing in his projects at or below budget. As far as one's previous reputation is concerned, I would say that Steve Wynn's dismal history with Mirage Resorts speaks volumes in demonstrating his lack of ability to manage these sort of large scale projects profitably. In any other business sector (outside of gaming) another CEO of a publically traded corporation would have been already tossed out on his ass if their core business (i.e. WLV) reported SIX CONSECUTIVE LOSING QUARTERS while simultaneously spending untold billions more to expand an underperforming property because it is prudent to do so in anticipation of the 'future escalation in construction materials/costs' which would otherwise make it impossible to build down the line. Well, if WYNN were at least profitable, maybe that wouldn't be much of a concern, now would it? WYNN, is without a doubt, the most leveraged publically traded gaming stock ever...

November 8, 2006 7:50 PM Posted by detroit1051

"...and its integration into the existing project will suffer the usual [Wynn] design flaws"
Leonard, you're projecting again. You seem fixated on Sheldon's $20.5 Billion compared to Wynn's paltry worth. That's a valid measurement, but visitors and guests consistently rank Wynn head and shoulders above Adelson in terms of property quality and total guest experience. Have you ever inspected Venetian closely? Construction quality is dismal inside and out. It is dirty and poorly maintained, fixtures are cheap, the parking structure is an abomination with a depressing entry into the property. It is a very profitable convention hotel. That's it. Next time I'm in Vegas, let's meet there and do an inspection. Having said that, I'm glad I hold both WYNN and LVS. LVS was up 7.79% today, WYNN 3.06%.

November 9, 2006 2:42 AM Posted by Mike E

Mike_ch wrote:

"...I'm willing to give the guy a fair shake and see if he learned his lessons with Palazzo."

Apparently not considering that Palazzo's coming in taller than WLV but is projected to cost the same as Bellagio did eight years ago. How many corners can a guy possibly cut?

Hunter, so what's the bet between you and detroit? Loser has to stay at The Venetian?

November 9, 2006 8:37 AM Posted by Hunter

Personally, I'm willing to give Sheldon another chance with the Palazzo and I've probably been one of the biggest Venetian bashers out there.

Regarding the bet, we need to solidify the terms.

I believe, and I'll let him chime in, that the bet was this:

I believe that for the first quarter the Venetian Macau is open, it will not achieve occupancy above 90% and he's taking the other side, saying it will be over 90%. Detroit - is that about right?

What are the terms? Loser has to stay at Circus Circus? That might be too extreme. How about this: loser takes winner to restaurant of their choice in Las Vegas. That works well for me as I think I owe you a meal anyway. :-)

November 9, 2006 9:52 AM Posted by detroit1051

Yes, I say 90%+ occupancy. I don't know if we ever agreed upon terms. Dinner works for me, but in the unlikely event I lose, I can't afford Guy Savoy or Joel Robuchon. If I win, either of those two restaurants is fine with me! LOL.

November 9, 2006 9:56 AM Posted by Hunter

I like your confidence!

I'll pony up for something good if I lose, don't worry. There's one thing I like more than winning and that's good food!

Let's clarify the time period... Are we saying the first quarter it is open or the first reported numbers (i.e. Wynn Macau's 75% was only for part of a quarter)... In my mind, my intent was to start the clock ticking when the property opens. How do you think we should measure?

November 9, 2006 10:09 AM Posted by detroit1051

"In my mind, my intent was to start the clock ticking when the property opens"
I agree if we can get the stats.
Does Luv-It Frozen Custard count as a restaurant?

November 9, 2006 10:17 AM Posted by detroit1051

Day's not over, but LVS is up 5.5%; Wynn up 4.3%.

November 9, 2006 10:39 AM Posted by Leonard Stern

From what I have been told, expect the overall construction quality of Palazzo (both exterior + interior) to easily meet or exceed the standards of the existing WLV. Remember, the Venetian is already an older property that ran into serious contractor-related quality issues with Bovis that took years of litigation for Adelson to sort out after the project was completed. Typically, general contractors on such massive-sized projects run into major cost overruns and are forced to 'cut corners' any way they can within code in order to reduce their loses. Adelson is known as a an iron-fisted administrator who brings in his projects at cost and one who is willing to put the necessary pressure on those responsible in order to get it done. There are always compromises made with build quality that cannot be avoided and, in Adelson's case with the Venetian, they were primarily a result of Bovis' failure to budget their construction costs accordingly. In contrast, Wynn's projects are always undergoing 'tweaks and changes' during the construction phase, after-the-fact, because he generally isn't (or rarely) 'satisfied' with the results. Even when change orders are approved, this type of construction management by a developer in particular is simply bad business for everybody and that is why Wynn's consistent track record by bringing in construction costs of his projects within budget has not been as successful as Adelson's. I have never opined that the Venetian and the new Palazzo are architectural masterpieces, quite frankly, they aren't. However, one must give Adelson some credit for at least bringing on board a world-renowned, Pritzker Prize-winning architect, Rem Koolhass in designing the Hermitage-Guggenheim Museum at the Venetian. Wynn has never availed himself thus far of such great architectural talent, not even once, to participate in ANY of his projects. It is unlikely that he will do so in the future as well based on his previous track record of creating mediocre architecture as displayed by his completed projects. The [architectural] bar will now be raised significantly when CityCenter is completed and it will soon become a prerequisite for future mega resorts to be designed by world-recognized "starchitects" since the average public will have increased their level of sophistication in appreciating truly great design from an objective standpoint. It has been long overdue for Las Vegas to start welcoming now the world's greatest architects like Frank Gehry here for the first time. An era has just begaun in Las Vegas that will be the new price of admission for all future luxury properties - listen up Steve - it's time to regroup.

November 9, 2006 10:43 AM Posted by Hunter


One interesting part of your response got me wondering... how sophisticated are the general public when it comes to architecture and more specifically, how does this intersect with Las Vegas visitors.

I often hear visiting tourists talk about how great buildings like Excalibur are. This doesn't give me much hope.

I guess you could argue that great architecture instills the visitor/viewer with a feeling that transcends knowledge of 'good' architecture.

November 9, 2006 11:20 AM Posted by Leonard Stern

Hunter: Anyone who is not one of the simian species who thinks that the Excalibur is a great building is either totally blind or severly retarded. That being said, until CityCenter comes on line, there really isn't a whole lot of sophisticated architecture here for even, the most feeble-minded of vistors, to comapre to. Excalibur was built during the short-lived theme phase, and attracts a completey different level of clientele based on price point than the newer properties. It's tantamount to eating ground round your entire life without ever having tasted Kobe beef. Design sophistication for laypersons grows gradually with exposure, and since Las Vegas tourists are becoming ever more upscale each year (thank God!) as a result of the aging Baby Boomers' vast amount of disposable income, these people are already accustomed to a high-end lifestyle, and will otherise expect to experience trend-setting architecture. There is definately a major paradigm shift taking place as far as Las Vegas architectural design is concerned which is being spearheaded by CityCenter.

November 9, 2006 5:24 PM Posted by Aaron_B

Hopefully WYNN will turn profitable in Q4!

Steve may turn out to be better at creating great resorts than at operating them. Comparing Steve�s creations to Sheldon�s the difference in quality is quite striking. Just compare Bellagio to the Venetian and how well they have held up. Of course had Steve been more frugal in building Bellagio & possibly not built the Beau Rivage as Hunter mentioned in his podcast he just might still be in control of Mirage Resorts.

I just about fell out of my chair laughing at the thought that anyone could ever believe that Excalibur is an example of great architecture. The thousands of through the wall window a/c units at Excalibur make a powerful architectural statement! The first time I saw the place I thought �It�s the world�s largest Super 8!�


November 9, 2006 5:26 PM Posted by MGK

While we're all on the subject of WLV and what not, I finally hear that the Tower Suites at WYNN finally got the Mobil Five Star rating! Lets see the Palazzo get that raing... uh, yeah, like that's actually going to happen.

November 9, 2006 7:19 PM Posted by Brian Fey

Aaron - Wynn will turn a profit in Q4, and I think it will be substantial. Not just a million or two.

November 9, 2006 7:56 PM Posted by mike_ch

Excalibur is lousy, but build more NY-NYs and Luxors. I look at almost everybody's concepts and I'm bored as hell. The New Tropicana, bleh. The New New Frontier, been there. THEplace, ugly as sin and it will ruin sightlines of the Mandalay block. Charlie Palmer? Boring.

As for what looks good, I think the W looks nice. Palazzo seems alright and so does the Cosmopolitan.

Leonard's exposition about world class architects coming to Las Vegas and building internationally-acclaimed archiecture that they do everywhere else is the opposite of what I want! Bring more crazy buildings that are too wacky and too unusual to exist anywhere else!

November 9, 2006 10:13 PM Posted by Bert

As I cannot comment on LV properties, I still think that the Western operators are taking a huge risk with their Macau properties. The Lisboa has traditionally only an average occupancy of 80-85% and who knows how many room are being used by the high rollers for free.

The fact remains that about 90% of the visitors are daytrippers, some gamble right through the night.

At current arrival rates leaves about 7000 possible overnight visitors. Macau now has about 11,500 rooms with at least 20,000 more rooms to come in the next five year!

Even if they can increase overnight stayers to 20,000 in the next five years, that still leaves 35% of the rooms vacant.

Maybe SJM is going the right direction, Stanley Ho is staying on the Macau Peninsula and is going to build a Casino Hotel catering for the European market. See the full story!

Contrary to what you guys are saying SJM will still hold his market share and is slowly fighting back. He just hired Frank McFadden away from Venetian Macau!

So how LVS and WYNN are going to get 90% plus is beyong me!

November 9, 2006 11:42 PM Posted by Leonard Stern

Actually mike_ch, very few cities the size of Las Vegas are blessed with such an elite + highly respected group of great world-renowned architects such as those contributing to just ONE single project here, that being CityCenter (granted it is the largest private development in U.S. history). As far as the outlook for achieving, on the short-term, a reasonable amount of success in Macau by overseas operators, clearly the most ingenious business coup d'etat ever was MGM/MIRAGE's partnering with Stanley Ho's daughter! Think that one over for a while and it will soon become crystal clear what an absolutely brilliant long-term business move that was on [MGM's] behalf when considering the Ho family monopoly over there for the past forty years or so. This almost guarantees MGM Grand Macau's success right out of the gate. Too bad our "Golden Boy" Wynn hadn't though of that stellar deal first, huh? LOL

November 9, 2006 11:54 PM Posted by Hunter


Are you considering moving into CityCenter when it opens?


November 10, 2006 12:04 AM Posted by Leonard Stern

Hunter: I was born and raised in Beverly Hills, own property in Century City as well as Marina del Rey, and by 2009 when C.C. is finally complete, I will definately move back to So. California permanently. The thought of 3 million people in the Las Vegas valley with its inadequate infrastructure will make it impossible to live here pretty soon - even worse than in L.A.

November 10, 2006 12:09 AM Posted by Hunter

RIght on. I love Southern California. I've lived here most of my life and I sing its praises often. It doesn't hurt that I live in such a beautiful city but even despite that, it's great.

November 10, 2006 6:31 AM Posted by detroit1051

"RIght on. I love Southern California."

Hunter, it's chilly here this morning. 73 degrees with a sunny high of only 81. I'm going for a walk along the ocean.

Leonard, can the infratructure ever catch up with the population in Las Vegas? I'm especially concerned that tourism will be harmed if dumb decisions are made regarding Strip pedestrians and traffic flow. It is critical that the Strip remain pedestriab-friendly. Driving from the Strip to Red Rock during afternoon traffic isn't pleasant, either. It's in MGM's and HET's best interests to participate in, and influence, the infrastructure issues. Also, what a nightmare driving to South Point.

November 10, 2006 9:29 AM Posted by Leonard Stern

detroit: The biggest infrastructure problem facing Las Vegas is actually going to impact the resort corridor more than anywhere else. When massive Strip projects like CityCenter, Cosmo, Echelon, possibly Harrah's, etc. are complete, the vehicular density, along with the combined pedestrian traffic (already a major problem now) has limited any possible resoultion to try and correct today. Actualy, back in 1988-89 a viable plan was being developed in conjunction with the federal government that would have incorporated the most advanced state-of-the-art German built monorail system employing a "Maglev" guideway. This was a very serious proposal/solution to the Strip's density and future transportation concerns, however, it would have been located right down the center spine of the Strip itself, initially extending from Trop to Sahara with planned guideway expansion links in the future. The guideway would have been elevated approximately 30 feet above grade level and was designed to have feeder stations with adjoining people mover-type walkways leading into all of the major resorts on BOTH the west and east sides of the Strip. Ironically, it was Steve Wynn himself who derailed the entire project (no pun intended) by vehemently opposing any elevated guideway system running down the middle of the Strip because he felt, at the time, that it would visually "impede the pedestrian experience" and otherwise obstruct the opposite (east) side street-level view of his prized Mirage and soon to be complete Treasure Island (think volcano + pirate show features). His insistence that the guideway be relocated to the west of his properties along Industrial ultimately made the project totally unfeasible and it was subsequently cancelled due to his continuous pressure on authorities to try and kill it. Jump forward 15 years and one can see that the Las Vegas People Mover, as proposed back then, would have been a perfect solution now when considering the mega projects that will eventually adsorb every buildable square inch of Strip frontage as is the case today and in the very near future. BTW, the Las Vegas People Mover System would have been substantially funded with FEDERAL funds + partial funding from private contributions distributed evenly among the major operators. Unlike the ill-fated, privately funded monorail system we have today. That system is actually losing money due to low ridership numbers, is an antiquated design (think Disneyland monorail) and is also located in the worst possible location, along Paradise in order to be truly efficient wherby it only provides service to selected properties on the east side of the resort corridor. Wynn's reason for opposing the LVPMS was purely based on a selfish foundation and, clearly, he was incapable of forseeing the future impact of development along the resort corridor and only seemed to care about his two new Strip properties at the time. So one can only look to Steve Wynn for Las Vegas not having an effective, state-of-the-art monorail system today that would solve the resort corridor transportation innfrastructure it not only deserves, but is in desperate need of. Now we are saddled with an out-dated, money losing monorail system that keeps breaking down, which BTW, received NO federal funding wahsoever!

November 10, 2006 10:54 AM Posted by mike_ch

Bollocks. There's no reason the Strip needs a Maglev train. Maglevs trains (ditto the Shinkansen trains in Japan) are intended for long-distance travel at high speeds. The much talked about, yet never built rail between Vegas and LA would be an example. To cruise the strip? Waste of technology and money! If it was riding Las Vegas Blvd all the way up to Nellis like the MAX buses do or something, then I could see the point. But the tourist corridor is a short route, shorter than the route the Disney World trains use going from Magic Kingdom to EPCOT.

Personally, I don't see the brilliance in running anything down the dead center of the Strip since it means you have to get people in and out in the center of the street, and that's a logistical nightmare. Monorails running along the backside aren't offensive, but what is offensive is that there's nowhere that the monorail meets the sidewalk. The only reason, ONLY REASON the monorail can not take off as it is has been because of the hotels' insistance that you walk miles of casino to get to a station, then walk again through miles of casino to get from the station to the street.

November 10, 2006 1:24 PM Posted by Leonard Stern

I beg to differ with you on this one, I actually saw the final version of the schematic drawings for the LVPMS and the proposed design of that thing was simply brilliant to say the least. If you are at all familiar with Maglev technology, the guideway system is far less bulky in profile than conventional guideway systems, yielding much lighter load bearing stress on their respective support columns. As a result, the design for the LVPMS guideway was 'extremely aesthetic' in that it did not appear to be overly massive or heavy-handed, but rather, it had the appearance of a slim-downed truncated arch that splayed out at the base (sort of similar in principle shape to the Saint Louis Gateway Arch). The passenger cabs were extremely low profile and super sleek. One cannot even compare this system (even from 15 years ago) to any current conventional monorail designs which look like nothing more than a massive concrete freeway overpasses with oversized passenger cabs (just drive down Paradise Rd. if you don't believe me) Maglev thechnology is currently used in many various applications for short range travel (even in today's amusement park venues), so it isn't just a matter of high speed capability, but its ability to stop and start with minimum braking motion detection and the fact that it has the effect of literally 'riding on air'. Also, maintenance costs are minimized over the long term as a result of mininimal use of mechanical parts. FYI mike_ch, the proposed high speed train from Los Angeles to Las Vegas was never intended to utilize Maglev technology, but opted for a more conventional rail design. One of the reasons that the federal government was willing to contribute to the construction costs of this 'newer' tecnology by partially funding the LVPMS, is that it would have set a precedent for being the first such type of advanced public transport system in any U.S. city at the time. What a great example of another 'first' this would have been for Las Vegas!. BTW, the recently upgraded Strip median "so-called beautification program" designed by Lifescapes Int'l., consisting of nothing but an endless parade of boring palm trees, is soon to be removed entirely by the county in order to make way for much needed additional traffic lanes down Las Vegas Blvd. I was intimately familiar with the LVPMS at the time and can tell you if was a really bad call in not having built it then. The current monorail is a joke at best and is nothing more than an extension of the MGM Grand's original hundred yard track. If Steve were truly a "visionary" as he likes people to think, he wouldn't have been so foolish as to oppose the LVPMS which has forever negatively affected the transportation infrastructure through the resort corridor in order to protect Wynn's own personal 'aesthetic' narcissistic driven interests - the public be damned! And those are the true facts on this one, I can assure you...

November 10, 2006 7:25 PM Posted by macauphoto

Leonard, I would have to disagree with you that MGM\Mirage�s partnership with Pansy Ho was brilliant. It was MGM�s only opportunity to get into the Macau market. They are now in a relationship in which they have to split the profits. In addition, if Stanley Ho has any great opportunities for a casino why would he give them to his daughter. He can keep them for them himself and keep 100% of the profit instead of sharing it with a rival. In addition, if it is such a great partnership, why are they the only company without land in Cotai which is considered the future of Macau gaming? MGM is stuck in a relationship whose destiny is controlled by their biggest competitor. Do you think Stanley Ho would allow his daughter to make a major decision that could hurt his casino business without his approval? I don�t. LVS and WYNN are in a much better position to capitalize on the Macau market.

November 10, 2006 9:11 PM Posted by Leonard Stern

macauphoto: I have only one response that I can offer you in regard to any 'advantage' that MGM might have gained in partnering with the Ho family dynasty (specifically Pansy Ho) and their ongoing monopoly in Macau, and I'm quite sure that you will understand exactly what I am referring to without going into further detail:

TRIADS! Despite the Chinese government's feeble attempt to try and eliminate them completely from integrating into the behind-the-scene operations of the "new" U.S. casino operators there, they [the Triads] have enjoyed decades of control over all aspects of organized crime in Macau, so don't expect them to just go away and disappear anytime soon. It took decades to rid organized crime out of Las Vegas and it will take at least that long to cleanse Macau of the Triads as well!

November 11, 2006 11:38 AM Posted by detroit1051

Barron's has a very bullish piece on Wynn in the new issue. If you can't open the link, it's worth getting a hard copy. Here are two excerpts:
"Some big investors are betting that cash flow will spurt further as the company adds high-revenue tables, steps up its expansion of Wynn Macau ahead of schedule and opens its Encore resort in Las Vegas next year. "They are in the two best gaming markets in the world," says Dan Chung, chief investment officer at Fred Alger Management. He figures Wynn's gaming revenues will clock in at $1.4 billion this year and $2.3 billion in '07, up from just $722 million last year. Macau is doing almost all of that, Chung says."
"Deutsche Bank's Bill Lerner values Wynn Resorts at north of $92 a share, assuming the land is worth $12 million an acre, or $16 a share. Joe Fath of T. Rowe Price is even more bullish. Assuming Cotai opens as planned in 2009, Fath thinks cash flow could zoom to $1.7 billion in 2012. "I get a $17 billion valuation and no net debt," he explains. "Very conservatively, you could get a 140 stock."
A Big Wynn in Macau

November 11, 2006 1:35 PM Posted by Leonard Stern

Hey detroit: The day that WYNN reaches 140 is the day I PROMISE to give up my "Wynn-bashing" ways FOREVER and I might actually consider becoming a convert for life! I hope that you aren't holding your breath on the likelihood of this ever occurring, otherwsie you will most likely require the administration of oxygen in order to be able to survive until that day, or when Hell freezes over, which ever happens first. Let's all just wait and see how WYNN performs in Q4 2006, a pivotal quarter for them to become PROFITABLE. Who knows, maybe Steve will pull another surprise rabbit out of his hat and save the day like he did in Q3.

BTW, Hunter, just wondering, who in the hell is "Doug"? Please don't tell me he might just be another troll planted here by Steve's ever- present minions in order to eradiacte any trace on the internet of all anti-Wynn sentiment out there. The suspense is just killing me, and now it's starting to make me paranoid. Could this guy possibly be yet another Wynn 'conspiracy' on behalf of his propaganda machine to try and completely "cleanse" the entire World Wide Web of all personal opinions that do not faithfully praise the mighty Steve Wynn? Oh no, My bad!! LOL

November 11, 2006 2:51 PM Posted by Mike E

"The day that WYNN reaches 140 is the day I PROMISE to give up my "Wynn-bashing" ways FOREVER"

Didn't you already say that the day Steve creates a "7-star" hotel is the day you'll eat crow? He's already achieved the highest and most-respected hotel rating there exists (more respected than your Travel Channel sources). Watch what you promise.

Bon app�tit!

November 11, 2006 4:21 PM Posted by Leonard Stern

Mike E, dude, you really need to get your facts straight; the Wynn Tower Suites received a 'five star Mobil citation' and will NEVER attain the ultimate level of criteria that a "seven star" property requires. One must understand that there exists a certain level of controversy regarding the various types of world-class hotel rating policies, so I beg to differ once again. Dubai (UAE) currently has close to a hundred or so luxury hotel properties under construction, or proposed, which will exceed the Mobil five star standard, and the majority of these projects are expected to achieve the same [rating] level as Burj Al Arab. Had The Mansion [@ MGM Grand] been qualified for inclusion, the Tower Suites at WLV would have been relegated to nothing more than "a dog house with a view" as I previously opined. If you take the time to research numerous guest reviews (since WLV opened 18 mos. ago) there seems to be a unanimous opinion that the Four Seasons (although ONLY a Mobil FOUR star rated property) has their overwhelming vote when comparing their personal experiences, service, overall accommodations, between the Wynn Tower Suites and the Four Seasons @ Mandalay Bay. I propose that they [Mobil] revise their criteria and rate or otherwise include The Mansion as a competitor against the WLV Tower Suites and let's see who comes out the winner. Hands down, Steve Wynn will NEVER be capable of developing any of his current or future properties, which will even begin to approach the level of exclusive luxury as exists in The Mansion. For those of you that have never stayed there, you cannot imagine what I am trying to convey to you in mere words. Having personally experienced both, I would't even bother to put the Wynn Tower Suites on my list - they suck in every catagory IMO. Now, would you like me to support this with "articles" confriming my contention? Too bad that The Mansion was exempt from having been rated because, Steve himself, already has publically praised and acknowledged that property as being at top of the heap in terms of exclusivity and pure unadulterated luxury! My comment that "I would eat crow" if ANY of Wynn's properties ever receive a SEVEN star rating still stands, however, Mike E, you happen to be two numbers short '5' does not equal '7', then again I am not a mathematician so maybe I might be missing something here. Please educate me if I don't know what I'm talking about.

November 11, 2006 5:15 PM Posted by detroit1051

>>Hey detroit: The day that WYNN reaches 140 is the day I PROMISE to give up my "Wynn-bashing" ways FOREVER and I might actually consider becoming a convert for life!

Oh, thank God! It won't be long until Leonard comes over from the dark side.

November 11, 2006 5:55 PM Posted by Leonard Stern

detroit, if you consider FOREVER not being too long for me to convert over from the dark side (because that's how long it will be before WYNN reaches 140) then I have to confess, you are probably right in that regard.

November 11, 2006 9:31 PM Posted by Devon

I just don't see how anybody can even compare Wynn Tower Suites with MGM Mansions. I don't get how you, (Leonard)think that Steve built the Tower Suites to compete with the Mansions. One costs $500 per night, while the other is $5000. Wynn has villas that compete, and do a good job competing with the Mansions. One thing I will say is that if any hotel did diserve the 7 star rating (no hotel does), it would be The MGM Mansions. I'm sure that the service of the world's "only 7 star hotel" isn't even close to that of the Mansions. Also, Leonard do you have any pictures of the suites at the Mansions?

November 11, 2006 9:35 PM Posted by mike_ch

Don't you ever get tired of us getting tired of you?

November 12, 2006 12:59 AM Posted by mike_ch

I just want to apologize for the above because I only noticed after I posted that the comment appears directed at Devon; which was not it's intention, I assure you.

November 12, 2006 2:35 AM Posted by macauphoto

Leonard: I agree with you that the Triads still have a heavy influence within Macau but they should be thrilled that LVS and WYNN have come to the marketplace. Business should be booming for them. The Triads control prostitution and loan sharking. Neither Wynn nor Sands are in either of these businesses.

You can�t walk into the Wynn spa and get a happy ending nor can you pick up a prostitute within Tryst. Based on walking around the Sands and Wynn in Macau, I would say there are more prostitutes strolling the Vegas properties than the Macau properties. The Vegas companies have made an effort to keep Triad influenced operations off their property. Unlike the Casino Lisboa where you can walk around the �Racetrack� and get a girl for the night or hang out at the bar at the Mandarin Oriental and play an exciting game of �Spot the Hooker�

I feel confident that the Triads are not involved with the operations of Sands and Wynn casinos nor are they skimming from the top. But I am sure the Triads are capitalizing on the increased amount of visitors to the Macau area and their short term loan business should be increasing. It is just not as obvious and out in the open as before. How the Triad manages the operations supporting the gambling industry doesn�t matter to the Vegas properties as long as the Vegas companies do not know what is happening and that it is not occurring on their property.

Back to the original point, MGM pairing with Pansy Ho was their only option to getting into the Macau market and will have minimal impact to the bottom line of MGM compared to Wynn or LVS. This is obvious when you compare the market capitalization of these three companies, LVS 30Billion, Wynn 8.3B and MGM 12.5B. Wynn has a lower market capitalization then MGM but they have only one property in Vegas and still have not turned a profit from normal operations. The stock market and analysts have put little value on the MGM Macau operations.

Any way I look at this situation it is far from a brilliant move for MGM to team with Pansy. MGM does not control their destiny in this relationship and has to split all of their profits. In addition, the Triad should welcome the growth of LVS or Wynn as they modify their business plans to thrive off the additional number of visitors to Macau.

As a side note, hopefully the Triad never lose the influence over prostitution because it is quite an entertaining sport to play �spot the hooker� while having a few drinks after work.

November 12, 2006 10:29 AM Posted by Leonard Stern

The Triads influence in Macau extends far beyond just prostitution + loan sharking activities. They are omnipresent behind the scenes. The propaganda being dispensed by the major Las Vegas gaming companies with major new investments there and the 'illusion' that they can rid Macau of the [Triads] control of organized crime is complete rubblish. Appearances aside, the Triads are there to stay and will become even stronger and much more sophisticated with the development of all the new mega-resort properties. Just like the mob did in Vegas, their reign of criminal activities will only be elevated to a higher level and the U.S. operators can't do a damn thing about it. Remember, Macau is attracting almost ALL Chinese gamblers (a completely different diametric from what U.S. operators are used to) and they are attempting to convert their day trip only gambling visits into a Las Vegas type of experience which will require a complete modifiaction of their [the Chinese] gambling habits. The learning curve for the U.S. operators is going to require time, to say the least. This article appeared not too long ago in the Business PRESS that deals specificaly with the MGM/Ho family alliance. Clearly, Stanley Ho has the inside track on using the Triads influence in Macau to his advantage. Pansy ho's family already controls the lions' share of transportation and other major infrastructure there. Outside appearances can prove to be deceiving. Afterall, it's not like Wynn Macau isn't going to have to split a chunk of change in profits with Jack Binion, is it?

November 12, 2006 11:27 AM Posted by mike_ch

The triad thing is pretty simple, you just don't allow them to exist on your property. It's what Hughes did. It's what Circus-Circus (once they found out about the mobbed-up gift shop) did. Maybe the dynamics are a bit different, maybe the law enforcement isn't as big on attacking organized crime as America was in the 70s, but it seems to me in a publically-held corporation there's no room for this.

November 12, 2006 11:50 AM Posted by Leonard Stern

Actually, Hughes' properties which he controlled back in the mid-1960's 'allowed' the mob to continue to opearate the casino operations because they were, quite frankly, much better at it. It really wasn't until 1978 when organized crime was completely eradicated as "ghost" operators in their skimming of profits when the Stardust fiasco became public, Allen Glick, the front man + Frank Rosenthal (Argent Corp.) It literally took several decades to completely rid the mob entirely as corporate public companies began to take over. However, if if were not for Hughes, things might still be status quo for the mob in Las Vegas even today. If there were ever a true "visionary" in the future of Las Vegas history, it would definately be Howard Hughes. Even Summerlin is named after his grandmother, and when he bought all of that property in the late 1950's it was nothing but desert wasteland!

November 12, 2006 10:38 PM Posted by Bert

Latest pictures Wynn Macau phase II

November 13, 2006 3:16 AM Posted by Mike E

Leonard wrote: "Too bad that The Mansion was exempt from having been rated because, Steve himself, already has publically praised and acknowledged that property as being at top of the heap in terms of exclusivity and pure unadulterated luxury!"

You're exaggertating and he didn't praise The Mansion without taking a shot at your beloved MGM. Wynn described it as, "A jewel on the corner of a vast, middle-range hotel."

Leonard also wrote: "Hands down, Steve Wynn will NEVER be capable of developing any of his current or future properties, which will even begin to approach the level of exclusive luxury as exists in The Mansion."

He already did years before The Mansion with Mirage's villas, a year before with Bellagio's, and he did it again with WLV's. And they're more exclusive in that there aren't nearly as many (only six in the case of WLV), they're larger overall, and while not advertised at all, still act as a hotel within a hotel (own entrances, all services go through "Villa Services" with their own kitchens, storage, etc). They are just as qualified of a separate review from Mobil et al as The Mansion is. All that's needed is an official, separate name.

I'm not saying Wynn is a pioneer in this since the Desert Inn and Flamingo also had villas long before The Mirage. I'm just telling you The Mansion is nothing new and your praise is due in part that they're the only accomodations in this class that are openly advertised and easily reservable. Don't throw out this whole, "By invitation of the management only," crap either. I can call the number on the back of my credit card and reserve one tomorrow. It's that simple. Hell, they'll even throw in a $500 gift certificate as a thank you. Where's the exclusivity in that? I can't do that at Mirage, at Bellagio, or at Wynn, and believe me, I tried.

I have no doubts that The Mansion is the best "reservable" hotel in Vegas, but there's another world of unreservable suites that can give, and maybe even beat, The Mansion's "make-yourself-believe-there's-such-a-thing-as-7-star" experience.