Wynn Resorts Q2 revenues fall; Adelson threatens to sue Dems over pimp claim

TAGs: Las Vegas Sands, Macau, prostitution, sheldon adelson, Steve Wynn, Wynn Resorts

wynn-resorts-q2-revenue-downCasino giant Wynn Resorts saw its fortunes fall in Q2 2012, based on parallel declines in both Las Vegas and Macau. Overall revenues were off 8.3% to $1.25b, falling short of analysts’ estimates of $1.33b. Net income was $138.1m, a 13% improvement over the same period last year, but keep in mind that last year’s numbers included a $107.5m charge for the controversial donation Wynn gave the University of Macau (the one that sparked the legal Armageddon with Wynn’s former largest shareholder Kazuo Okada). The downbeat Q2 numbers build (so to speak) on the $140.6m net loss Wynn reported in Q1.

On a regional basis, Wynn’s Las Vegas revenue was off 11.6% to $345.6m and earnings were down 38% to $81.9m, as a poor gaming hold offset a 5.5% rise in non-casino revenue. In Macau, revenue dipped 7.1% to $907.6m, while earnings fell 3.9% to $302.2m. CEO Steve Wynn blamed the 10% drop in mass market table games revenue in part on increased competition from Las Vegas Sands (LVS), which opened two casinos on Macau’s Cotai Strip during the quarter. But Steve, who has his own Cotai casino on the drawing board, said competition “has made everybody sharpen their knives. It’s healthy in the long run, challenging in the short run.”

The volatility of VIP baccarat was underscored on the post-earnings conference call, as Steve related how “in April, for the first time in 45 years, I saw baccarat [hold] go minus for a month. I never saw that before. On the other hand, last year, I saw a 37% hold. If I was a customer, I might have asked for an investigation. But those are the kind of swings that can take place.”

Wynn also addressed the nature of the average VIP baccarat player. “This business is about amusement, self-indulgence on a very special level … The people that come here and do these things, they are here because they like that more than they like the money. It’s an indulgence, like some people buy bottles of wine for $20,000 … They don’t expect to win, but they like to get lucky once in a while and have fun with the house’s money. The last few months it’s been extreme in that regard. But last year was extreme in the other regard … I really don’t like it when we win too much money from the players.”

LVS honcho Sheldon Adelson, already known for his pledge to donate as much as $100m to back Republican candidates in this year’s US elections, is now threatening to cut out the middleman and personally go after Democrats in court. A letter from Adelson attorney Lewis R. Clayton to the Democratic Congressional Campaign Committee (DCCC) threatens legal action unless the DCCC “immediately” retracts and apologizes for issuing press releases on June 29 and July 2 that wondered what Republican candidates will “do with their Chinese prostitution money?”

The DCCC presser referenced an Associated Press report on allegations made by ex-Sands China exec Steve Jacobs in his wrongful termination suit against LVS; specifically, that Adelson had tolerated and/or sanctioned prostitutes plying their trade at his company’s operations in Macau. Last week, Adelson laughed off the allegations, but his chuckles have since swelled into an evil cackling. Clayton says Sheldon “will not tolerate baseless attacks on him and his family,” such as the DCCC’s claim that the AP had reported Adelson having “personally approved of prostitution.” This, in Clayton’s view, equates to “maliciously branding Mr. Adelson as a pimp.” Helpfully, Clayton included analysis of the DCCC claims by (self-described) non-partisan fact-checkers Politifact Ohio that “the claim that Adelson’s donations … amount to ‘Chinese prostitution money’ is dubious enough that inserting the word ‘allegedly’ can’t save it.”

From prostitution to propositions, comedienne Sarah Silverman has an offer she believes Sheldon can’t refuse…


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