You Wynn Some, You Lose Some
Oct 3, 2014
Gambling has its ups and downs and Steve Wynn has got to experience both within days of each other as he wins in Boston by loses out in Nevada.
Steve Wynn knows more than most about the gambling industry, about blackjack, about how the fickle fortunes of fate can leap from positive to negative with barely a whisper on the breeze, and about how one can only ever play a long game in a business so build up on small margins of chance and possibility. His company, Wynn Resorts Ltd., has just won the three year competition for a license to run a casino in the greater Boston area, a despite facing a ballot vote in November on the whole issue of gambling in the state, expects that $1.6 billion investment to pay off.
New Nevada Numbers Not Nice
• Gambling revenues down 3.7% across the state
• Wynn Resorts Ltd lose 3% of share price on news
• Is Boston’s casino strategy proposal now under threat?
However for Mr. Wynn the news has not all been good this week with the victory in Massachusetts (which is expected to vote against a ballot motion to repeal the state’s gambling laws during the mid-term elections) buoying expectations, and the news out of Nevada doing precisely the opposite. Perhaps Mr. Wynn’s oft cited experience in Las Vegas might not quite be the record of success the people of Boston were looking for, but Steve is sure to dismiss the recently figures from Nevada’s Gaming Control Board as merely a blip in the ongoing recovery out in the desert.
The figures show a fall in gambling income across Nevada amounting to some 3.7%. This lowers it to barely just over $920 million in August 2014, a drop of some $35 million in comparison with the August of the previous year. It was on this news that industry watchers have pinned the blame for the full 3% fall in Wynn Resort Ltd. share prices on Monday, making it the biggest loser of the day on the S&P 500. Of course Mr. Wynn will gain some comfort from his direct competitors, Las Vegas Sands Corp. also losing nearly as much value (2.9% with their share price dropping to $60.12) and point out this was always going to be part of Las Vegas’ refocusing efforts.
Whilst revenues on the strip might have fallen 6% on the same time last year, the downtown revenues rose by 4% to some $35 million, which some have said indicate the degree to which the city’s smart strategy of diversification of attractions in Vegas encourages a broader base of gambling which can only bode well for the future. Mr. Wynn is unlikely to be unduly concerned by the numbers coming out of Nevada, but it remains to be seen if the people of Massachusetts will be as stoic about the value of a company so recently fated to be part of its economic landscape.