Wynn casino resort to cost US$4b
US casino magnate Steve Wynn said yesterday that his new Cotai casino resort in Macau would cost US$4 billion to build.
Approval for a 51-acre site at Cotai was awarded to Wynn early last month. The casino giant currently operates a single high-end property, which opened in 2006, on the Macau peninsula but Cotai is fast becoming the city's new gaming mecca.
'Wynn Macau has always claimed that the investment will be more than US$3 billion, and a super- luxury project needs an investment of such a size,' said Edwin Fan, an analyst at BOC International.
Wynn said yesterday in Macau that the new integrated resort will be financed by loans, debt and cash. It will incorporate a 2,000-suite casino-hotel, 120,000 square feet of retail space, up to 10 restaurants, theatres, ballrooms, a nightclub and spa.
The 70-year-old chairman and chief executive of Wynn Resorts said shareholders would be 'very happy' with the return on their investment.
The casino will have no more than 500 tables, Wynn said. 'Quality is more important - not quantity.' The project will take up to four years to build, Wynn said. The Macau monorail will stop at the resort's lakeside front, close to the airport.
Casino rival Galaxy Entertainment has announced an investment of HK$16 billion to build the second phase of its Cotai resort, which is expected to open in mid-2015.
While slowing mainland growth has aroused fears of a spillover effect on gaming in Macau, Wynn said the city would still be a good place to do business even if the industry did not keep growing at the rate recorded in recent years. 'Growth of the market has been so spectacular, the expansion so dramatic [that] it is unrealistic for it to continue at that rate,' Wynn said.
Macau is the only place in China where casinos are legal. Gaming revenue rose 42 per cent last year to 268 billion patacas, almost six times that of Las Vegas, according to official data.
But gambling revenue growth in the city slowed to 7.3 per cent in May, the slowest expansion rate since July 2009, though the 26.1 billion patacas for the month was still the second highest on record.
Edwin Fan said the slower growth in May is not surprising, given the high base of the year-earlier month. 'Last year, golden week fell in May but this year it was at the end of April,' Fan said. He expected the June data to improve. 'The gaming performance will be good for a month with five weekends,' he added.
Wynn said the company's board was not concerned about the outcome of a legal battle with his former partner Kazuo Okada, the Japanese pachinko billionaire.
Okada, once a close friend of Wynn, filed a suit in a Nevada court in January, seeking access to Wynn Resorts' records over a HK$1 billion donation to the University of Macau Development Foundation.
Wynn Resorts sued Okada in February and redeemed his 20 per cent stake in the company saying he was 'unsuitable'. Okada is challenging the redemption.
'Wynn Resorts will allow time for federal judges to make a decision on Okada's case,' Wynn said.
Shares of the company closed 1.66 per cent higher at HK$18.36 yesterday, outperforming a 0.4 per cent gain in the benchmark Hang Seng Index.