Wynn Resorts CEO Matt Maddox said Thursday the company was reviewing some of the conditions Massachusetts gaming regulators placed on its license for the $2.6 billion Encore Boston Harbor, but it wouldn’t slow the planned opening in late June.
During Wynn’s first quarter earnings conference call, Maddox made a few cursory comments about the April 30 ruling that ended the 15-month investigation into the company.
No questions were asked by analysts about the Massachusetts decision during the question and answer session, and Maddox made no mention of the $35 million fine the Massachusetts Gaming Commission leveled against the company after executives failed to disclose years of allegations of sexual misconduct against company founder Steve Wynn.
Matthew Maddox, CEO of Wynn Resorts
Maddox himself was fined $500,000 for his “clear failure” to investigate at least one misconduct complaint.
“There was no impact on the suitability of the company or its key employees to hold a gaming license in the state,” he said during prepared remarks. “(The investigation) consumed a great deal of resources, at both the company and with the regulators.
“We feel very confident that it will be the nicest integrated resort on the east coast.”
In a statement, Wynn Resorts said it had incurred $2.26 billion in total project costs for Encore Boston Harbor.
Maddox said the opening of the resort, originally announced for June 23, might be delayed “a week or two to make sure the opening is flawless,” saying that the “regulatory complexity” has been a challenge.
“We’re ready to open, but we may give ourselves another week, or not,” he said. “We do not believe if we choose to appeal (the regulators’ conditions) it will impact our ability to open the project at the end of June.”
He added that, despite the “significant transition and turmoil over the last 15 months,” Wynn Resorts’ future, and the company’s growth profile, is “unparalleled in this business.”
In the quarter that ended March 31, Wynn Resorts saw total revenues decline 3.7 percent to $1.65 billion. Companywide net income was $104.9 million, reversing a net loss of $204.3 million a year ago. Earnings per share was 98 cents, as opposed to a loss of $1.98 per share in the 2018 first quarter.
Total cash flow declined 20.6 percent to $422.2 million.
In Macau, the company said Wynn Palace revenues grew 9.1 percent to $726.6 million, but Wynn Macau experienced a 15.3 percent decline to $523.9 million.
Revenues at the company’s two Las Vegas resorts declined 7.1 percent, to $401 million.
Maddox spent much of the conference call discussing Macau, where mass market business helped offset challenges to high-end wagering.
He called the company’s premium play “choppy,” but said that mass market revenues were up 13 percent.
Ongoing renovations at Wynn Macau will impact results in the property for the rest of the 2019.
He said the casino, located in Macau’s downtown corridor, will from 7,000 square-feet of the new retail to new restaurants being build adjacent to the resort.
In Las Vegas, the declines in high-end baccarat business on the Strip hurt results in casino revenue, which declined 17.1 percent. The company’s 430,000 square foot meeting and convention facility at Wynn Las Vegas is under construction, and development activities have begun in connection with the reconfiguration of the Wynn Las Vegas golf course, which has been closed since the end of 2017.
The company expects the total project to cost $425 million with the golf course reopening by the end of the year and the convention space opening early 2020.
Wynn Las Vegas President Marilyn Spiegel told analysts the company’s decision last week to end its two-year-old paid parking program had been “well-received” by customers, especially Las Vegas residents.
“It was frankly an irritant to those folks who would drive into the parking garage,” she said.
Wynn Resorts had long-term debt of $9.17 billion at the end of March.
Shares of Wynn Resorts closed at $136.33 on the Nasdaq Thursday, up 37 cents or 0.27 percent. However, shares were down as much as 4 percent in after-hours trading.
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgamingreports.com. Follow @howardstutz on Twitter.
