Not the biggest but the best: Steve Wynn on putting Macau’s casino gamble back on a roll
The American gaming mogul shares his thoughts on Wall Street doubters, inevitable turbulence and the sun coming up tomorrow
When casino mogul Steve Wynn took his company public in the United States in 2002, the money men stateside reckoned the Macau gaming card he had in his back pocket was at best a joke. How wrong they were.
And according to the man integral to the opening of the US$4.2 billion Wynn Palace resort on Macau’s Cotai Strip next week, the financiers on Wall Street weren’t the only ones who failed to see a gaming revolution about to explode in the east.
Watch: Steve Wynn talks about Macau
The transformation capped a remarkable decade that saw the end of a more than 40-year monopoly on games of chance in the former Portuguese enclave held by Asia’s biggest gaming tycoon, Stanley Ho Hung-sun.
Ho, the head of SJM, which remains one of Macau’s three main gaming concessionaires, is now in his 90s and enjoying the fruits of what must be one of the world’s most lucrative ever cash cows.
No one saw the eventual consequences of ending the monopoly, and, according to Wynn, the closing of one chapter gave rise to another one featuring a bottom-up, Macau-driven bid to take the gaming and hospitality industry to a new level. Wynn believes no one should be surprised that the ramifications of such a move are still being felt today.
In an interview this week with the South China Morning Post as the final touches were being put to his second casino-resort property in Macau, slated to open Monday, the 74-year-old businessman insisted that Macau could stay ahead of Las Vegas as the world’s premier gaming and entertainment destination, despite its recent troubles.
Thanks to a triple whammy of a mainland economic slowdown, Beijing’s corruption crackdown and a drive to re-engineer the city’s economy and diversify, Macau has found itself in an economic and political mire.
But just as the small special administrative region of China astonished the world with a phenomenal growth trajectory and did what Vegas did and more in a sixth of the time, Wynn believes the city can repeat its astonishing trick and ride out its run of bad luck.
Watch: Wynn talks about his new hotel
“I went public in 2002 in America and do you know what Wall Street valued my concession in Macau at?” he asked. “Zero ... zero... unbelievably zero.”
“Sheldon Adelson, (the CEO of Las Vegas Sands) also [valued it at] zero. Until Sheldon opened up the first place [in Macau] post-liberalisation downtown, The Sands, no one, and I mean no one, had a clue what was coming.”
“You know why?” he continued. “Stanley’s (Ho Hung-sun) numbers were invisible. They weren’t public. No one knew, not until Adelson shined the light, after Sars, did it become clear that, whoa, being in business in Macau is a cool thing.”
“The locals didn’t see it coming, maybe [former Macau chief executive] Edmund Ho (Hau-wah) saw. I’m told it was not so much a Beijing idea to open up gaming but an idea generated by the local community. They said, ‘look, we already have gaming ... why can’t we have a better deal?’
“When I got the concession, Edmund Ho said to me, ‘one of the things I want to result from this is that young people think there is a career in hospitality here’.”
Talk about an underestimation.
In what seemed no time at all, the landfill swamp which before liberalisation in 2001 linked chilled out Taipa Island with sleepy Coloane has become a gleaming monument to the gaming world. And in cash terms, it has left Las Vegas in the Nevada dust.
But Wynn believes what he described as unprecedented “rocket ship” growth of the past decade was bound to hit an economic and political quagmire at some point.
“Look, there have been a pile of winners and a pile of losers, competing forces,” he said. “Throw in the tiny size of Macau into the mix, and turbulence that a growing and changing China brings, and you would be an idiot not to expect a storm at some point.”
“All of this change is having an impact. It is showing up politically and in a lot of other ways in the community. Such changes were inevitable when you have had such rocket-ship, supersonic growth and expansion in such a small community [of] only half a million people.”
“Think of what has happened in this town in the past 10 years and the pile of winners and losers it has created,” he added. “Okay, so among the winners, there are a couple of Americans but there are also Chinese people who are among the winners.
“Foreign employees who came to town and bumped up property prices, cultural diversity that may have bugged some people. Throw all that into the pot, stir it up and you come up with a political landscape that’s like the one we are in.”
The casino veteran preaches calmness as well as home-grown enthusiasm. An avid art collector, Wynn took pride in bringing many Chinese works and artefacts back to where he says they belonged. Pieces are arrayed about the new Wynn Palace.
“I say don’t overreact, cool your jets. Focus on things that you can control: your business, your employees’ welfare, your guests and the quality of the product that you dish up,” he said. “Do that, keep your chin down, pay attention to business and the sun will come up tomorrow. That’s the way I figure it.”
He certainly speaks from experience.
The concept he has brought to Wynn Palace – namely, of building something that goes beyond gaming – originated in the hard school of 1970s Atlantic City in the early years of legalised gambling and was polished in the plush halls of The Mirage in Las Vegas and the 15 other resorts Wynn has built in his nearly half-century in the business.
Only time will tell if Wynn Palace can pull off the same trick in Macau, the unexpected gaming hub that took on Vegas and won, but is now finding that the roulette wheel that liberalisation spun hasn’t yet stopped.