It's a win-win situation for Wynn

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(China Daily/Agencies)
Updated: 2009-10-14 08:07

Billionaire Stephen Wynn said Macao's plans to ban slot machines from residential areas and raise the casino age limit are "good ideas" that won't affect his Wynn Macao Ltd.

Age limits will have "absolutely no effect on us", Wynn, chief executive officer of Wynn Macao, the city's fourth-largest casino operator, said in a Bloomberg Television interview from Las Vegas yesterday. The restrictions are "not a worry at all", he said.

Wynn Resorts Ltd and Las Vegas Sands Corp fell in New York trading on Monday on concern new limits may hurt earnings just as casino revenue is recovering in Macao, the world's biggest gambling hub. Visitor arrivals and casino earnings rose in August during an economic rebound on the mainland, which accounts for more than half of Macao's tourists.

"In the long run, these changes will be positive, as there won't be too much supply of gaming tables," said Steven Leung, Hong Kong-based director of institutional sales at brokerage UOB-Kay Hian Ltd. "People are worried about unlimited growth."

Macao may be seeking to prevent a repeat of the surge in gambling-table numbers that followed the end of billionaire Stanley Ho's monopoly, Leung said in a phone interview.

It's a win-win situation for Wynn
Macao is to ban slot machines from residential areas and to raise the age for casino customers to 21. [Bloomberg News]

Wynn shares declined 2.9 percent to $65.88 in New York trading and Las Vegas Sands dropped 1.8 percent to $17.72. Wynn Macao, which raised HK$14.5 billion ($1.87 billion) in a Hong Kong initial offer, rose 1.115 percent to HK$10.88 yesterday.

SJM Holdings Ltd, the casino operator controlled by Ho, fell 3.69 percent to HK$4.43 and Melco International Development Ltd, controlled by Ho's son Lawrence, dropped 4.27 percent to HK$4.93. Galaxy Entertainment Group Ltd, part owned by Permira Advisers LLP, fell 0.84 percent to HK$3.56.

Even with yesterday's drops, Galaxy has more than tripled this year, SJM has more than doubled and Melco has increased by 91 percent on optimism the decline in Macao's gaming revenue is over.

Macao is reviewing the number of gambling tables, according to a Portuguese-language statement posted on the government website on Monday, citing Francis Tam, secretary for economics and finance. The city is also drafting two laws, one to ban slot machines from residential areas and another to raise the age for customers and staff to 21.

"We don't have slots in residential neighborhoods," Wynn said. "Someone should be earning their own living before they think about gambling."

Macao's six casino operators "recognized that the gambling industry should not expand infinitely", according to the government statement, which gave details of a meeting with gaming executives. Tam also urged casino resorts to make hiring local workers a priority.

In 2002, Macao, the only place in China where casinos are legal, offered new licenses to Wynn, Las Vegas Sands and Galaxy, ending Stanley Ho's monopoly. The two US operators opened their first casinos in Macao between 2004 and 2006.

"The primary objective of the government is of course to raise money, but they have a very strong interest in how it affects the community," Wynn said.

Wynn sold some of his stake in Macao as he grapples with falling revenue at Wynn Resorts' Las Vegas operations.

Casino revenue in Macao jumped 53 percent in September, Portuguese news agency Lusa said. Visitor arrivals rose 6.4 percent in August from a year earlier, the first increase in 2009.

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