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Casino giant Wynn’s newest Macau resort delayed
Macau overtook Las Vegas as the world's casino capital in terms of revenue after the sector was opened up to foreign competition in 2002 and still leads its US counterpart, despite the current downturn in its fortunes. – Reuters file pic, November 21, 2015.Hotel and casino giant Wynn said the opening of its new US$4.1 billion hotel in Macau will be delayed by three months as gaming revenue in the gambling enclave suffers a drawn-out decline.
Revenues dropped for the 17th consecutive month in October, by 28.4% from a year ago, as China suffers a painful growth slowdown and Beijing embarks on a corruption crackdown that has hammered Macau's key VIP sector.
In a statement Thursday, Wynn said its contractor for construction works at the Wynn Palace – a floral-themed 1,700-room resort featuring a lake with gondolas – notified them of the delay.
"Wynn Palace will not be ready to open by the projected early completion date of March 25, 2016. The revised opening date for Wynn Palace is currently June 25, 2016," Wynn said in its statement without stating a reason.
Wynn Macau's shares in Hong Kong closed 1.32% lower on Friday at HK$10.48 ($1.35) per share.
Casino operators in Macau – the only place in China where gambling is allowed – are trying to lure mass market visitors to make up for the drop in high-roller gamblers who make up the bulk of the city's gaming income.
This has led to a slew of mega-projects on former swamp land on the coastal Cotai strip.
The latest launch was of the Studio City hotel and casino resort in October – featuring the world's first figure-of-eight rollercoaster – that was fronted by Robert De Niro, Martin Scorsese, Brad Pitt and Leonardo DiCaprio.
"We believe that some of the new Cotai projects face risks of delays amid a challenging operating environment," Daiwa Capital Markets said in a memo Thursday, following Wynn's announcement.
Gaming analyst Aaron Fischer said operators would be hoping for quick returns once they do open their resort doors.
"Operators are keen to get their properties open as soon as possible to start generating a return on that investment," said Fischer, head of consumer and gaming research at brokerage CLSA.
He added they may also do some "fine-tuning" to try to ensure greater growth over the medium term.
"That might include switching out some of the VIP capacity and maybe converting it to mass-market gaming areas or maybe converting some of that VIP space to restaurants or other non-gaming entertainment," he said.
Wynn Resorts founder billionaire Steve Wynn has previously said the situation in Macau was "uncertain".
"There's no question that uncertainty is the plaguing word of the day in Macau," he said in April.
Macau overtook Las Vegas as the world's casino capital in terms of revenue after the sector was opened up to foreign competition in 2002 and still leads its US counterpart, despite the downturn. – AFP, November 21, 2015.
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