Wynn Resorts Collects $511 Million Dividend From Wynn Macau
Posted on: March 7, 2015, 12:58h.
Last updated on: March 7, 2015, 12:58h.
Wynn Macau Ltd issued a dividend of $511 million to its parent company Wynn Resorts this month, despite the region’s current economic malaise.
The Chinese gambling hub reported its ninth straight monthly decline in February, an alarming 49 percent revenue drop over January.
News of the dividend comes in the same week that Wynn Resorts began encouraging staff at its Wynn Macau property to take unpaid leave because there simply aren’t enough customers to go round.
A recent anti-corruption drive from the mainland has contributed to the financial crisis in the region, forcing the junket operators and their accompanying high-rollers, which previously accounted for some 60 percent of the island’s revenue, out of town.
China has launched an operation to hunt down corrupt Communist Party officials, which it believes account for many of Macau’s VIP customers. President Xi Jinping warned Macau recently that it needed to bolster the regulation of its casino industry as well as finding revenue streams other than gambling.
Steve Wynn’s Pay Cut
Restrictions on the use of UnionPay, China’s only domestic bank card, has further curbed the flow of money from the mainland, while a new smoking ban and a generally weak Asian economy, have all conspired to hurt Macau’s bottom line. However, despite the downturn, casino giants like Wynn and Las Vegas Sands still rely on Macau for the bulk of their profits.
Wynn Resorts spokesman Michael Weaver said the funds would be used for “general operations of the parent company. That’s been the practice since 2006.” The company is currently building a five-star $1.6 billion resort in Everett, MA, set to be the biggest private development in the history of Massachusetts, with a grand opening scheduled for some time in 2017.
Desperate needs call for desperate measures, and even Steve Wynn is feeling the pinch, agreeing to take a pay cut from $4 million a year to a measly $2.5 million a year.
Macau’s Future Unknowable
Whether Wynn Resorts will be able to rely on Macau in the long-term is another question, and one to which not even Wynn’s CEO knows the answer. Unlike LVS, Wynn’s Asia operations are based solely in Macau, and Wynn recently acknowledged that the economic future there is unknowable.
“China remains a big question mark. We have more questions than answers, thousands of our Macau employees are anticipating promotion and a better life because of Wynn Palace … We have learned in the last 12 years to behave in China, and that is to listen carefully to what the leadership says and to conform with the program as we are their guest,” he said in February.
“We wait for an announcement from the government with baited breath … What we are seeing in China is an entrenchment.”