Wynn Resorts CEO Matt Maddox threw a curveball at Everett and Boston last week during an investor call in Las Vegas – saying that the Encore property may or may not open later than expected despite all eyes up to now being focused on June 23.
Though nobody had ever mentioned officially until last Thursday any possible delay, many around Everett had quietly wondered if the casino could ramp up as quickly as necessary in just one month.
Nevertheless, no one said anything about a delay during an extended Massachusetts Gaming Commission (MGC) meeting as late as last Monday, May 6, when plans were rolled out in detail for the June 23 anticipated opening.
Those plans in Boston seemed to be altered a bit across the time zones in Las Vegas, when Maddox indicated to investors that the Everett property may or may not open on time. While some thought it to be a major revelation, others believed he was simply hedging his bets in case there was an unforeseen delay that happened between now and next month.
“The construction is almost essentially completely,” he said on the call. “The building looks like it is in great shape. With staffing, we have 90 percent of the people either on board or within offer. So, we are in line…to complete everything we need to have a great opening. I don’t know if the opening date will be June 23 or a week or two later because we’re going to make sure it’s flawless and clearly the regulatory complexity we have been through has been a challenge. So, we’re now doubling back and the team we have on the ground there is terrific. We may give ourselves another week, or we may not, but the property looks great.”
That announcement came during the question and answer period of the investor call – which was at about 3:30 p.m. on Thursday. However, Maddox’s declaration wasn’t exactly clear-cut. Earlier in the call, during his prepared commentary, he had a more resolute feeling about the opening.
He mentioned they had received the Massachusetts Gaming Commission’s investigatory decision, and that the license was still intact.
“However, we are still reviewing the decision as it relates to the secondary and tertiary conditions imposed by the Commission,” he said. “We do not believe if we choose to appeal that will impact our ability to open the project at the end of June. Though the regulatory process has consumed a great deal of resources for the company and for the regulators, we are focused on opening this property within weeks and we feel very confident it will be the nicest, integrated resort on the East Coast.”
The MGC said it had not received any information from Wynn Resorts about moving back the date. The MGC and many local agencies have spent an inordinate amount of time planning for June 23, and any movement of that date backward could impact police availability during the July 4th celebration in Boston.
A spokesperson for the MGC said at the last meeting on May 6, Encore stated an opening date of June 23 and there have been no updates since then from the company.
The MGC meeting on May 22 is expected to have many Encore items on the agenda, and the possible late opening might be one of those items.
Mayor Carlo DeMaria said the City is proceeding as if the casino will open on June 23.
Additionally, on the conference call, Wynn CFO Craig Billings indicated they had spent $233.4 million on the project in the quarter, which brought their total spending amount up to $2.26 billion.
He also said they expect the casino to ramp up to full earnings over a period of more than a year.
“I think it’s a fair assessment to say that not only do our properties tend to run high in service levels and account for some levels of attrition, but also regional properties tend to ramp much more slowly from a marketing perspective,” he said. “We haven’t given any prospective numbers or any prospective margin expectations yet. But certainly we would expect that property to ramp up over the course of 2019 and all the way through 2020.”
Worldwide, Wynn Resorts is making several major upgrades to their properties, including a huge upgrade to the Wynn Macau property – a project they expect to be completed by the end of this year.
While many of their VIP gaming operations are suffering, Maddox said on the call, they are finding that their total visit numbers are up and they are making money on non-gaming ventures like restaurants and retail space. That was something that was always preached as a cornerstone of the Encore property in Everett.
“As we’ve discussed in previous quarters, VIP was down and the premium area continues to be choppy,” Maddox said. “However, what we saw is real strength in our core mass. In fact, our core mass increased over 13 percent year over year. What that shows is our strategy is working. We built five new restaurants at Wynn Palace over the last 24 months. Our visitation numbers continue to increase.”
Once Encore is up and running, and other projects are completed, the company is looking at a more normalized cash flow situation. At that point, they will likely look to expand in Asia next, Maddox said.
One point where they may enter the market next is in Japan.
“We are committed (to Japan),” said Maddox. “We actually will be making a trip there. We have people there on the ground and in the U.S. building quietly our relationships there and focused on various jurisdictions in Japan. It is something for the long term and we will participate where we see fit.”