Wynn denies he upped the ante on VIP agent's fee
Casino magnate says rival Sands paying higher commission to lure high rollers
Las Vegas gaming magnate Steve Wynn has denied increasing commissions for the middlemen that lure the lucrative high-stakes players to Macau's casinos, a charge made by rival operator Las Vegas Sands' chairman Sheldon Adelson.
Mr Wynn yesterday confirmed that he had won over the services of a top VIP junket agent at the Sands named Phua Wei Seng, who accounted for about 36 per cent of its US$12.84 billion in VIP chip turnover in the year to March, and who will now work for both casinos.
But Mr Wynn rejected the accusation that he raised commissions to capture the new business. 'I did not raise commissions. We equalled the commissions to the penny,' he said.
Mr Wynn's US$1.2 billion, 600-room casino resort opened in Macau this week, vying for a piece of the territory's HK$28 billion market for VIP baccarat against former monopoly holder Stanley Ho Hung-sun, Hong Kong-listed Galaxy Entertainment Group and Las Vegas Sands.
Casinos in Macau rely on middlemen or junket agents to bring in high rollers, lend money and collect gaming debts. In exchange, the agents are paid a percentage of the gross volume of VIP gaming chips bought by a customer.
According to Mr Wynn, his team pays each of its three junkets including Mr Phua a maximum commission of 1.1 per cent on VIP chip turnover.
Instead, he accused the Sands of recently raising its maximum commission to 1.2 per cent. Both casinos pay an additional 0.1 per cent to junkets as an allowance for complimentary transport, food and lodging for customers.
An increase even that minor can translate into a cut of several percentage points in net earnings for the house.
'Sheldon Adelson's guy [Sands Macau president Mark Brown] had a meeting with the junket operators about two weeks before we opened and said: 'If you don't go to Wynn, we will give you an additional tenth of a [percentage] point',' Mr Wynn said.
'We did not equal the offer. They [Sands] are higher at the moment.'
Executives at Las Vegas Sands declined to comment, but last week Mr Adelson, who insisted that his casino was only paying 1.1 per cent, said his outfit was likely to raise the commission to match his rival.
Mr Wynn's resort is the fifth new casino to open in the territory this year, bringing the total to 21, but so far overall growth in the VIP market has stayed virtually flat compared with a year ago.
That has made competition increasingly fierce for business from high rollers, who accounted for 57.6 per cent of Macau's HK$25.01 billion in gaming revenue during the first six months of the year.
Mr Wynn said he did not need to raise commissions to attract junkets or lure high rollers.
'These were our customers in Las Vegas before they ever had the Sands in Macau,' said Mr Wynn, a billionaire who developed - and later sold - Las Vegas mega-resorts including the Bellagio, Mirage and Treasure Island.
'Although discounts or commissions or breaks in the price matter, they are not profound,' he said.