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Wynn, Board Expected to Hold Meeting in Macau Next Week

3 Nov 2003

By Jeff Simpson

Steve Wynn and his board of directors are slated to begin a trip to Hong Kong and China today that should culminate Wednesday at a Wynn Resorts board meeting in Macau.

Wynn on Friday declined to say what the board was expected to do at its meeting in Macau.

But industry insiders suggest Wynn is backing away from the public pressure he put on Macau lawmakers in August, when he suggested the company's board might opt not to build a Macau resort if the Chinese enclave didn't quickly enact needed casino credit reforms.

Wynn said Friday it makes sense for the board to meet in Macau since the company has already invested millions there and plans to invest at least a half-billion more.

The trip also will give his board members the opportunity to view firsthand the vibrant Chinese economy that would fuel a Macau casino, he said.

"We're going to Hong Kong, Shanghai, South China and Beijing in addition to Macau," Wynn said.

Asked whether the board was expected to OK the company's plans to build a Macau megaresort, Wynn said: "I have nothing to announce."

In August, Wynn said he was taking his board to Macau to let the members determine whether Wynn Resorts should build at least one casino resort in the semiautonomous Chinese enclave.

At the time, Wynn was eager to send a message to Macau lawmakers that they needed to approve casino credit reforms intended to remove criminal influence over its $3 billion-plus casino market.

The changes Wynn wants would allow casinos to grant credit and to reduce taxable gaming revenues by the amount of bad marker debt.

Industry insiders suggest the Chinese gangs who control loansharking and prostitution in and around current Macau casino operator Stanley Ho's properties can't be elbowed out of the casinos until the new operators can offer credit.

Wynn Resorts' Macau concession agreement requires the company to invest about $500 million by June 2009.

Bear, Stearns & Co. casino debt analyst John Mulkey said much of Wynn Resort's stock value is based on the the company's Macau license.

The Las Vegas Sands Inc., which operates The Venetian, also obtained a license to operate in Macau but has proceeded with construction on a temporary casino that should be open by the middle of next year even without the credit rule changes.

Referring to recent easing of restrictions on the movement of Chinese nationals to and from Macau, Mulkey said the delayed reforms aren't as significant.

"While we're somewhat discouraged that the legislation Wynn has been seeking is not yet in place, we are even more encouraged that the mainland Chinese have relaxed visa restrictions, which should benefit tourism to Macau," Mulkey said.

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