Wynn Raises the Stakes in Macau

Wynn Resorts is stepping up its presence in Macau, opening a new casino in the area today, and revealing plans for another development and the possible move of its headquarters to the Chinese gambling hub.
Author:
Publish date:

NEW YORK (TheStreet) -- Wynn Resorts (WYNN) - Get Report is stepping up its presence in Macau, as its Encore casino opens in the Chinese gambling hub today, and the company reveals plans to build another location in the area next year.

Wynn has announced that it is even looking into relocating its headquarters to Macau, but did not provide details. Taken together, the announcements serve as yet another example of the way in which Las Vegas is rapidly losing its prominence in the gaming market.

According to several reports citing CEO Steve Wynn, who spoke at a press conference in Macau, the company's next project will likely have fewer than 2,000 rooms, about 400 tables, restaurants, shopping and meeting rooms, and be set against a backdrop of gardens.

Wynn expects to start construction on the new casino next year and could open it by the end of 2013.

"We like the more aggressive moves by Wynn in Macau, however, a good deal of the upside may already be embedded in current share prices when reviewing peer multiples," Sterne Agee analyst David Bain says. "Then again, we do believe Wynn deserves a premium to its peers."

The casino operator also unveiled its $600 million Encore casino, which will cater to the VIP segment of the market. "This bodes well given the continued increase of VIP versus mass play on a year-over-year basis," Bain says. "With its Cotai project likely to capture the higher margin, mass play in the long term, Wynn will have the best of both worlds in a market with large, long-term prospects."

Macau has really become the epicenter of gaming, posting double-digit revenue gains throughout the recession, prompting many casino operators to refocus their attention on the area.

Las Vegas Sands

(LVS) - Get Report

is currently building a new casino across the street from its existing Venetian Macau, while

MGM Mirage

(MGM) - Get Report

is in the process of completing an initial public offering of its Macau assets.

Still, in order for MGM to complete the IPO, it was forced to sever its ties with Atlantic City. New Jersey regulators have deemed its Macau business partner, Pansy Ho, to be unsuitable, due to her family's alleged ties to Chinese organized crime. MGM, of course, was willing to disassociate with Atlantic City in order to grow its presence in Macau.

MGM also announced on Wednesday that it is changing its name to MGM Resorts International to reflect its plan to grow its brand overseas. Currently, the bulk of MGM's revenue comes from Las Vegas, where it owns 10 hotel-casinos. MGM also holds a 50% stake in a casino in Macau and plans to spread its brands in the Middle East and Asia through a hospitality division.

-- Reported by Jeanine Poggi in New York.

Follow TheStreet.com on

Twitter

and become a fan on

Facebook.