Monday, October 19, 2015

Macau Government Responds to Steve Wynn

Steve Wynn verbally lashed out at the Macau government on the Wynn Resorts third quarter earnings conference call last week. Steve is frustrated at the government's restriction on the number of table games a casino is allowed to have.

The Macau government not surprisingly didn't appreciate what Wynn had to say and fired back in kind, issuing a release stating in part:

"The Government says it will not lightly change its policies on the gaming industry and on labour – policies that have been widely supported by the Macao public.

The Government additionally noted that overseeing applications for gaming table allocation for the local casino sector and applications by companies for non-resident labour are executive legal powers of the Macao Government.

The Government also expressed regrets over an opinion from a casino operator – reported by news media outside Macao – relating to the city's gaming policy...

...In order to reiterate the Government's stance and its principles on the gaming policy issue, the Secretary met with representatives of the relevant gaming operator on 18 October."

The release showed a photo of Wynn Macau president Gamal Aziz meeting with government officials. The news of the government response sent WYNN stock price down by more than 6% earlier today.

I have a couple of questions about this whole incident. The first one - was this calculated by Steve Wynn, or did he just fly off the handle at the spur of the moment? The second question is whether the Macau government is serious about their hard line stance on table games.

I have a feeling this is some kind of dog and pony show designed to get Wynn Palace more table games while letting the government save face at the same time.