In today's flurry of email headlines (which continue whether I'm in the office or not) I read a blurb saying that Wynn Resorts "has become" a Chinese company. Certainly this is no surprise to Wynn. I remember him saying that as far back as 2005, though then it was more along the lines of, "One day Wynn Resorts will be a Chinese company.
Of course, this is getting press now since it's being coupled with his criticisms of the Obama administration, but looking at the numbers, it's clear that Wynn Resorts has been a predominantly Chinese company for quite some time. Here's a chart:
As you can see, there's nothing particularly momentous about the first quarter results when it comes to the revenue split: in fact, Macau's share is down slightly from calendar 2010. The bigger news, though, is that Wynn Cotai is about to start in earnest. He's not far enough along that a peek at the just-opened Galaxy hasn't sent him back to the drawing board for some elements of the Cotai project (and wouldn't you love to have been part of that conversation?), but he's clearly thinking build, rather than plan, for the near future. As soon as the government gives him its OK, he's going to start construction.
The potential for the future is what's changed his mindset. Let's fast forward to 2016, when Wynn Cotai has a few quarters under its belt. Wynn predicts that the Cotai project will double his Macau revenues. Using calendar 2010 for a baseline, and assuming that Las Vegas and Wynn/Encore Macau revenues remain stagnant (they won't, but lets assume they do for the purposes of this exercise), Cotai's doubling of Macau revenues does the following:
So, if all other things remain the same and Cotai performs as Wynn expects, by 2016 more less than one-fifth of total Wynn Resorts revenue will come from Las Vegas.
That being said, it makes a lot of sense to hold his annual meeting in Macau. It's where most of his revenue comes from, which means it's where his most important customers are. And it makes even more sense to speak of Wynn Resorts as a predominantly Chinese company, because that's where most of the action is.
When Harrah's got out of the Promus umbrella, it didn't consider moving its headquarters back to Reno, which was where the company was founded and, until the 1980s, where it was based. Instead, it moved to Las Vegas, which was clearly the center of the gaming world and a market that Harrah's wanted to get more involved in. (Today, as Caesars, it is nothing if not involved in Las Vegas). Wynn's increasing Sinoization is a sensible response to the direction that the business is headed.
Also, Wynn's a developer at heart. He's clearly relishing the challenges of building Cotai, and he's not done learning about the Macau market. Here's an extended quote:
"I believe the Cotai [project] is the best work we have done. It's a departure in many aspects. It has many new things and new approaches to the way the property is presented. I think the public is going to be very excited. It's very comfortable and user-friendly. Now that we have nine years of experience in Macau, as you saw with Encore we are learning how to really address the emotional and physical needs of our guests.
"That kind of insight comes with time and experience. Thankfully we have the experience."
It's easy to see how China's at the top of Wynn's mind these days. He's getting to build there, something he's not going to do in the United States for the foreseeable future. If I was Wynn, you couldn't get me to talk about anything but China these days.