Las Vegas casino resorts should be thanking Macau

The billions lavished on Macau resorts by Las Vegas companies is returning benefits to the Southern Nevada economy. That’s the way Steve Wynn sees it.
The Mirage Resorts chairman does not expect this super-sized spending spree to diminish any time soon, not with MGM starting construction of its second Macau resort, Sheldon Adelson continuing to build there and Wynn already looking ahead to phase two of the company’s Wynn Palace, which will not even open for nearly two years.
It adds up to something that is very good for Las Vegas, he said. The earnings generated by resort companies half a world removed from Las Vegas have helped fuel a level of continuing Strip energy that would not otherwise exist. Wynn views it as benefits of gaming’s globalization.
It’s helped stabilize an industry that has not enjoyed the best of times over the last four or five years as domestic consumers slowed their spending.
Steve Wynn seldom side steps an opportunity to make his points when the mood strikes, in this case teeing off on critics of the development capital American companies have been spending elsewhere around the world.
Wynn, MGM and Sheldon Adelson’s Las Vegas Sands will dedicate additional billions to other Asian ventures as companies get green lights from the governments. There’s a lot of money available for opportunities from Macau to Korea, Japan and possibly Mainland China. It’s all a matter of deciding how to best satisfy regional appetites for travel and tourism.
Wynn continued, “Were it not for foreign investments, our Las Vegas properties would look nothing like what they are now.” Of the more than $1.9 billion in gross revenue last year, Wynn said at least $1.2 billion of that figure was international income.
“This was our customers bringing money from aboard into the United States. It offset a lot of imports.” Wynn was looking at the big picture of marketing travel to the U.S. from around the world, implying some critics do not see the picture for what it is.
“Nevada (gaming) is an exporting company as much or more than Walt Disney. The fact that there is a Disneyland in Hong Kong and Tokyo has helped America. It has not hurt America.
“Without the hotels that we’re building and the ones Mr. Adelson is building and MGM is building from Macau to Singapore, things would be much worse in America. A lot of the vitality on the Strip would not exist.”
Domestic business levels would not have justified much of the spending that has occurred along the Strip corridor over the last several years of the Great Recession.”
The travel and entertainment industry spreads benefits far and wide as people move from one place to another taking their discretionary spending with them.
Wynn has made some of the same points as he has discussed possibilities for creating an “urban Wynn” in major U.S. cities, as the law allows.
These would be five-star destination hotels with casinos that would be apart from the public areas in the hotel. It’s appears to be what Wynn wants to do in the Boston area if he gets the license that is to be awarded there in the spring.
The concept sounds a lot like what we already see in Las Vegas with the Four Seasons and MGM’s Mandalay Bay under one roof. Caesars Palace has already turned one of its towers into a Nobu Hotel.
Let’s Make a Deal
The muffled sounds of deal-making are leaking out of Atlantic City as a variety of interests decide how to best take advantage of the opportunities created by online gaming.
The Caesars-owned, its partnership with 888 and the Boyd Gaming online vehicles are clearly dominant for the time being and each is looking to build momentum. Wynn Resorts is said to be interested in running one of the Caesars sites or “skins,” as they are known.
This has led to a lot of continuing speculation about the likely extent of Wynn’s involvement there and in online gaming generally. Since online activity within the state’s borders is still very much in a ramping up mode a lot of opportunity will depend on how regulators and even lawmakers respond to the needs of this new industry.
Will they give it the helping hand its needs? Will they sit on it, draping it with red tape and needless restrictions?
The shape of the future will become more apparent as the Atlantic City casinos and their partners step up marketing programs.
Caesars spokesman Seth Palansky is reluctant to peer too far ahead. The company is gearing up for its World Series of Poker that sprawls across about six weeks beginning in late May in Las Vegas. It will draw players from around the world and is being hyped in online promotions in Nevada and New Jersey.
How potential online players respond to marketing associated with the World Series will make it easier to answer a lot of questions. Palansky’s point: patience and disciplined thought will be important as operators look to take advantage of the opportunities – whatever they may be – associated with online activity.
“We’ll know a lot more later this year,” Palansky said.
And by then, the disillusioned Revel investors will have probably handed off their property to another owner and MGM will have been approved to return to the state as co-owner of the Borgata.


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