Wynn Resorts is hoping that games in Greater Boston will be game-changing for their Everett resort.
In a conference call last week with investors, both Wynn CEO Matt Maddox and Wynn Chief Financial Officer Craig Billings said they have great hopes to roll out an expanded sports betting business, with the idea of eventually bringing that to Massachusetts.
Maddox called it a ‘game changer’ for Encore, and Billings said they believe that sports betting in Massachusetts could be a major revenue source at Encore in the coming years.
“We’re likely to launch a sports betting project in New Jersey in 2020 and then move out to selected states and ultimately, hopefully, deploy that product in Massachusetts,” said Billings.
Added Maddox, “We think that will be a game changer for Encore Boston Harbor.”
Wynn Resorts holds a popular sports betting book at its Las Vegas properties, and with the legalization, and impending legalization, of sports betting across the country – the company plans to expand that book.
Last month, they announced a strategic partnership for their sports book business with a casino operator in Indiana and Colorado. Previously, they announced another sports betting partnership last year.
For years, sports betting was only legal in Nevada, which is where the Wynn book has operated for some time. New Jersey sued for the ability to have sports betting in its state, and that case was decided in their favor. Since that time, sports betting legalization has become a very hot topic in state legislatures across the country.
In Massachusetts, Gov. Charlie Baker put a bill forward last year that laid out a plan for bringing sports betting to Massachusetts – as it is now legal in Rhode Island. That bill has been studied now for more than a year, and this week Speaker Bob DeLeo said they are awaiting a Committee report on the matter before taking action. Like the expanded gaming legislation in 2011, he said, it was necessary to act carefully and with information.
“Chair Ferrante and the Joint Committee on Economic Development and Emerging Technologies are currently reviewing proposals on sports gaming,” he said. “We await the results of the committee’s deliberative analysis – as we did with our expanded gaming bill – to determine the best outcome for the Commonwealth.”
Others in the state legislature have said publicly that the tax structure of the bill is now being worked out, and it is a complicated process to get correct.
• Landlord and Not a Developer
Maddox said Encore is excited about the vacant land across the street from their site – which is currently a parking lot operated by the City of Everett – but don’t anticipate developing the site themselves.
Encore has been rumored to be talking with several interesting partners, including John Henry of the Boston Red Sox. The parcels constitute almost entirely the old Line neighborhood, and are slated for hotel, retail and entertainment uses.
“The capital investments we’re talking about (in Boston) are reconfiguring restaurants, building out a sports bar that could potentially become a sports book,” said Maddox, responding to a question about spending inside Encore. “So, it’s not large capital investments. We do have 11 acres of land across the street and many developers have been talking to us about partnerships where we could have new hotels, retail, etc. So, we’ve been thinking about that more as landlords and partners as opposed to outright developers, but first we’re going to ramp Encore Boston Harbor. Then we’re going to watch the neighborhood build up.”
The possibilities are seemingly endless, with rumors of everything from an outdoor concert venue to a New England Revolution soccer stadium – none of which are verified.
• Likely to Cut Staff at Encore
Both Maddox and Billings were asked about the large costs to operate Encore, which was pegged at about $1.45 million per day by analysts. Both said those are high costs, and they would probably end up not needing as many on staff as they have now.
“Clearly when you open a property you end up having more staff than you need when you’re operating in a very efficient way,” said Maddox. “Also, how you procure items. You just get smarter.”
Added Billings, “I would say the $1.4 million will have a downward trajectory in 2020.”
• Wynn Resorts Not Moving on Japan Now
Maddox said the excitement about the next frontier for the company being in Japan has died down a bit, and he said they were not going to pursue opportunities there immediately.
However, he did say they believe the future will hold an opportunity there.
Wynn has been in Japan feeling out the emerging gaming market there for more than a decade, with some workers from Encore being transferred over there to help with that at times. However, they are not going to pursue the existing urban opportunity at Osaka.
“It’s something we were going to announce at some point,” Maddox said. “We believe there will be opportunity in Japan in the future. We are continuing to work quietly and behind the scenes. I go over there about one week every couple of months. We have people over there and are building up our team. I still think this is going to be a longer process than people are anticipating. We’re going to make sure that if something is right for Wynn, that is financially sound, that it is a project that will change the company, then we’re with partners with the same values.”
With the construction costs from Encore now hitting the books, as well as extensive renovation costs in China and Las Vegas also coming, the company seemingly is taking cautious steps towards expansion.
“We are going to pursue Japan with vigor, but we are not going to pursue it if it doesn’t make financial sense,” he said. “We’re going to be very disciplined in how any structure is put together…We like the Japanese market and think it will be a very high-revenue market, but we are making sure it will be something our shareholders also like.”
The next investor call for Wynn Resorts is expected sometime after the first of the year.