Sunday, April 12, 2009

60 Minutes: The King of Las Vegas - Steve Wynn

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I do indeed enjoy Steve Wynn so much, it has pained me to have a short against his company. Frankly his cashing out of a major secondary offering in 2007 led me to believe a top was potentially "here" in the then high flying casino stocks [Oct 3, 2007: A Top in Casino Names? Wynn and Las Vegas Sands] - he is just that good. Unfortunately of late, Las Vegas Sands (LVS) and MGM Mirage (MGM) both fell below $5 so this was our only public option to hedge against Las Vegas. But at the rate we're going in terms of appreciation, both those names should get back on the radar as plausible shorts any moment now. Green shoots have been sighted inside and overgrowing major hotels on the Strip. The consumer, with his 4.75% cash refis is now swarming - good times are back in America.

Via 60 Minutes

The man who turned up the wattage in Las Vegas is casino mogul Steve Wynn. He set off a building boom in the 1980s that turned a bunch of gambling joints into an international tourist spot.

Las Vegas became the fastest growing city in America until the recession hit it - hard. Now, the population is in decline, and the gambling industry is in desperate shape. Revenues in Wynn's Las Vegas properties plummeted 32 percent last quarter. But the economy didn't stop him from opening his most opulent casino resort yet, the Encore.

At 67, Wynn is a legend in Las Vegas - the man with the Midas touch who added glamour to the gambling industry. Even in this recession, thousands came to try their luck at his new casino, Encore, when it opened in late 2008. Encore cost nearly $2.3 billion dollars, a risky bet in a bad economy.

Asked why he'd open a hotel in this economic environment, Wynn told Rose, "Well I'll tell you right now that if I had any idea this…I wouldn't if I had a choice. But this project was started four years ago. These things have a huge lead time."

The gambling industry has been battered by the recession and taken the city of Las Vegas down with it. Some casinos stand half-built; unemployment is over 10 percent. And while Wynn has had to slash employees' pay and lower room prices, he plows ahead, doing whatever it takes to get customers to his new hotel.


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Earlier pieces on Wynn Resorts (WYNN)
  1. [Feb 25, 2009: Wynn Resorts Misses by a Country Mile]
  2. [Feb 13, 2009: Leaving Las Vegas.... Literally]
  3. [Dec 23, 2008: Wynn Encore Casino Struggling to Fill Rooms During Launch]
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