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Wynn considers moving company to Macau

22 Apr 2010

By Howard Stutz
LAS VEGAS, Nevada -- Steve Wynn's announcements usually draw lots of raves and praise from Las Vegans, but not this time.

Local gaming and government officials instead were expressing skepticism and concern after the Wynn Resorts chairman said on a cable business network Wednesday that he was considering moving his company's corporate headquarters from Las Vegas to Macau.

"I would say it's just talk. It would be difficult to coordinate all his interests from Macau," said Bill Thompson, a University of Nevada, Las Vegas public administration professor who specializes in gaming matters. "Symbolically, it would have a negative impact and send a really bad message about Las Vegas. Maybe (Wynn) wants something and he's just saying this to get it out of his system."

Wynn's surprise announcement on CNBC came on the same day he opened the $600 million Encore, a 414-room, all-suite expansion of his Wynn Macau.

The announcement was one of several notable remarks Wynn made during a series of media interviews surrounding the unveiling of the new Macau hotel-casino.

In addition to suggesting he would transplant his corporate headquarters to Macau, a special administrative region of China, Wynn said he hopes to begin construction next year on a third hotel-casino on a 52-acre site on Macau's Cotai Strip.

Wynn also criticized the policies of President Barack Obama, continuing a dialogue he began in October when he appeared on several Fox News television talk shows to lambaste the administration's handling of the economy.

It was his announcement that he is considering moving his headquarters and some 100 corporate staff to Macau that attracted most of the attention locally, though.

Rep. Shelley Berkley, D-Las Vegas, said she hoped Wynn wouldn't follow through with his idea.

"The loss of Wynn Resorts would be a devastating blow to Southern Nevada and our economy," Berkley said. "Much of the modern image of Las Vegas that is known around the globe today exists as a result of his vision and he remains a leader in the industry."

Las Vegas Mayor Oscar Goodman also hoped the casino developer isn't serious about the idea.

"We want all of our gaming executives to think of Las Vegas as being No. 1," Goodman said. "To move the headquarters to another place indicates they don't feel that way."

Wynn Resorts is a member of the Las Vegas Chamber of Commerce and the organization's spokeswoman thought a move to China would not be a unifying message.

"As we rebuild our economy, Las Vegas needs the creativity of visionaries such as Steve Wynn at the forefront of reshaping Las Vegas for the next phase of our growth," said Cara Roberts, the chamber's director of public relations.

Wynn didn't provide any details on the possible headquarters shift, saying only that he is considering the idea and would bring the matter up with the company's board of directors.

"It is not improbable or unrealistic considering so much of our revenue is from China that it makes sense that I spend most of my time here," Wynn said in an interview with CNBC. "I'm seriously considering that and I am weighing the implications of how I engineer that."

In a subsequent interview with Bloomberg News, Wynn said much of his desire to leave Las Vegas was because of the country's economic direction set by Obama.

"The governmental policies in the United States of America are a damper, a wet blanket," Wynn said. "They retard investment; they retard job formation; they retard the creation of a better life for the citizens in spite of the rhetoric of the president."

Senate Majority Leader Harry Reid, speaking at a press conference on banking reform, was asked about Wynn' comments on Obama's policies.

"I'm not going to get into a dispute with Mr. Wynn, somebody who has done so much for Las Vegas, but I will say that taxes are at an all-time low. The tax picture he complained about is just not there."

Wynn said Wednesday he was concentrating his efforts on Macau and would skip potential opportunities in Las Vegas.

"I don't think the Las Vegas market at the moment beckons a large investment," Wynn told Bloomberg "The economic outlook in the United States, the policies of this administration, which do not favor job formation, do not encourage investment at all."

If Wynn follows through on his threat, he won't be followed to China by Las Vegas Sands Corp., which operates three resorts in the Chinese enclave and is expected to resume construction this year on an additional four hotel-casinos on the Cotai Strip.

Las Vegas Sands President Michael Leven said the company could generate 85 percent of its overall cashflow from its Asian market once the $5.5 billion Marina Bay Sands in Singapore, which opens next week, is fully operational.

But he said that is no reason to pull up stakes.

"McDonald's makes more money internationally than domestically, but are they going to move the company to Moscow? No. They are staying in Chicago," Leven said. "At the end of the day (Las Vegas Sands) has no desire to pick up and move its headquarters."

Leven said Las Vegas Sands Chairman Sheldon Adelson agrees with Wynn's view of the federal government's policies toward businesses. But Adelson doesn't see any rationale for moving his corporate headquarters to Macau.

"For Steve Wynn to make that kind of comment is shocking," Leven said. "Sheldon has his disagreements with the president. But none of us at this stage of the game should abandon the U.S. That's not something we would do."

Stacy Woodbury, deputy chief of staff for Gov. Jim Gibbons, didn't disagree with Wynn's assessment of the Obama administration. However, she said moving corporate offices out of Nevada sends the wrong message.

"We share those same concerns, but this is why we need for Nevada to stay the course and not raise taxes on businesses," Woodbury said. "That type of move doesn't make any sense."

Woodbury said the governor would reach out to Wynn when the casino operator returns to Las Vegas.

Wall Street might be somewhat mixed toward Wynn's comments, said Union Gaming Group Principal Bill Lerner. On Wednesday, after the remarks had been circulated, shares of Wynn Resorts closed at $85.93 on the Nasdaq National Market, down 64 cents or 0.74 percent.

Lerner thought Wynn's plan was more political in nature.

"This is a message about Steve's strong views about the direction of the business climate in the U.S.," Lerner said. "There might be a favorable tax advantage to that move, but I don't think that was the primary driver of his comments. Investors may be somewhat ambivalent otherwise."

Encore, which opened Wednesday, is relatively small by Macau standards with 61 gambling tables. It is the only hotel-casino scheduled to open this year in the region. The project is geared toward the VIP market with lavishly decorated suites, including four 7,000-square-foot villas.

A fireworks display to mark the launch of the new casino was rescheduled for today so not to conflict with the day of mourning Wednesday for victims of an earthquake in the western Chinese province of Qinghai.

Wynn said the company would turn its attention toward a third Macau casino and its first located on the Cotai Strip.

Wynn told media in Macau he would start construction next year on a luxury hotel and casino complex that should be completed before the end of 2013.

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