Steve Wynn's Fair Share Concept

The Wynn Resorts quarterly earnings conference call was on Tuesday. The call is sometimes called The Steve Wynn Show by insiders because his straightforward answers can be very entertaining and educational.

Here's one tidbit from this week's call that I found interesting. It involves a concept that Wynn calls "Fair Share" that Wynn Resorts uses to judge how well they are doing:

"For those of you who really follow this, don't look at market share per se, look at fair share. We use that term, you can call it what you want. But you basically take how many units of slot machines or tables does a given operator have compared to the total in the marketplace, and then take a look at the share of the money that the person -- that the company has. If that ratio is better than 1:1, then you're a net receiver of the customers and you've sort of made a dorm out of your neighbor. If it's less than 1:1, then you're a dorm to your neighbor, and that's a negative fair share. We have been able to increase our fair share market penetration in the face of increased competition. It happened to us in Atlantic City years ago. We were the smallest place. But the more places came on, the more our premium over the average increased, and we're enjoying that again in Macau. It's a very important number, and it sort of tells you how good a job you are in delivering a good guest experience, a good customer experience that makes those people want to come back again and again and keep you as their favorite place."

You can listen to the conference call at Wynn Investor Relations, and read the transcript at Seeking Alpha.