Maybe Everett shouldn't shouldn't feel so special being pursued by someone no one else wanted.
It's unclear if Massachusetts has enough room for Wynn's oversized ego.
Feb 2, 2014, 11:25pm EST
Here's why Steve Wynn says he's spending so much effort on a Boston-area casino
Wynn was more tactful about the state’s gaming regulators during last week’s quarterly earnings call than he was in October. He did explain why he’s asking lawmakers to tweak the casino law in his favor. He’s worried about a compact with the Mashpee Wampanoag tribe that would impose a 17-percent gaming tax on the casino the tribe wants to build in Taunton. Meanwhile, the state’s commercial casino resorts — presumably MGM in Springfield, and either Wynn Resorts in Everett or Mohegan Sun in Revere — would have to pay 25 percent. Wynn wants that reduced to 17 percent if the Mashpee casino moves forward — although he seems to think that Foxwoods’ plan for Fall River would trump the Mashpee casino anyway, and Foxwoods would pay the full freight there because it would be built under the state’s commercial casino rules.
There was one other criticism aimed at Massachusetts on the call. His license application was 18,000 pages, he told analysts, and weighed 225 pounds. He loves it so much, he joked that he takes it with him everywhere he goes. He referred to this state’s background check process that his firm had to undergo as “particularly grueling.”
So if Wynn dislikes the Bay State, why is he still pushing so hard to beat Mohegan Sun for the sole Boston-area casino license, invest $500 million of his company’s equity, and borrow another $1 billion to make it happen?
A Goldman Sachs analyst essentially posed that same question to Wynn on the conference call. And, it turns out, it’s the kind of question Wynn says that gets asked in Wynn Resorts board meetings and management conversations every month.
Wynn says he’s largely avoided the run-of-the-mill racinos and riverboat casinos that have popped up all over the country in recent years. But Boston, he says, is different. An international destination city, he calls us. The Wynn casino here would be of higher quality, Wynn boasts, than any other rival on the East Coast. Wynn says he would be able to capitalize on the thousands of Asian and Middle Eastern students who come to school in the Boston area, and whose parents are regular visitors as a result. He also sees a Boston casino as one giant billboard, advertising the Wynn brand in Las Vegas.
Gambling revenue in Vegas has shrunk in the past 10 years amid a wave of new regional casino openings. But Wynn sees Boston as a way to plant a flag on the East Coast, and promote the Wynn brand, perhaps spurring more well-heeled gamblers to hop on a flight at Logan and head to Sin City.
He also says he expects a roughly $300 million profit on that $500 million upfront investment.
Like any presentation on an earnings call, Wynn’s response was as much a show as anything else. But there’s probably plenty of truth to his answer. For Wynn, this is about building the brand in a high profile, well-to-do city that’s easily reachable from places like New York or Philadelphia — as well as being in a prime position to draw all the wealthy parents from other countries who are putting their kids through college here. That said, it’s still a high-stakes gamble, one in which will probably continue to raise more questions in those board meetings and management conferences in the months to come.
http://www.bizjournals.com/boston/blog/mass_roundup/2014/02/steve-wynn-on-the-boston-casino-market.html?utm_source=ML+14%2F2%2F03&utm_campaign=20140203ML&utm_medium=email
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