Wynn says new Macau casino to cost $4 billion
MACAU (AP) — U.S. casino magnate Steve Wynn plans to spend $4 billion building his long-awaited second Macau resort, shrugging off concerns Tuesday that the global economic malaise and China’s slowdown will dent profits in the world’s most lucrative gambling market.
The project, which got government approval in early May, will house 2,000 hotel rooms, 500 gaming tables, 10 restaurants, shops, spa, meeting rooms and a nightclub.
Visitors will be able to ride Austrian-built gondolas complete with air conditioning and piped-in music around an 3.2 hectare (eight-acre) lagoon out front.
The 557,000 square meter (6 million square foot) development will be built on 51 acres (126 hectares) of reclaimed land and will take up to four years to complete. It will be financed by cash and debt.
Wynn said he shared concerns about the state of the world economy, saying the European crisis was “totally unpredictable” while the U.S. economy was “spotty and irregular.”
“The world is an unsettled place,” Wynn said. “China happens to be one of the more stable stories at the moment but even here in the PRC (People’s Republic of China) there are questions about a slowdown and change.”
“We don’t see it here yet,” Wynn told reporters. “Macau is sort of special in that regard.”
Wynn said it was unrealistic for Macau’s “spectacular” casino revenue growth rates to continue. But even if the growth rate falls in the Asian gambling hub, he said Macau would still be a “wonderful” place to do business.
Macau’s economy has boomed and casino revenue has rocketed since the government ended a four-decade gambling monopoly in 2002 and allowed foreign operators in. Gaming revenue jumped 42 percent last year to $33.5 billion, five and a half times bigger than the Las Vegas Strip.
More than 70 percent of Wynn Resort’s $1.3 billion first-quarter profit came from its Wynn Macau Ltd. unit.
But casino revenues in May were the slowest in more than two years, raising fears that the wealthy, high-rolling gamblers from mainland China powering Macau’s growth are pulling back. The former Portuguese colony is the only place in China where casinos are legal.
Wynn has one casino resort in Macau at the moment. The new project will be in Cotai, an area of reclaimed swampland that is the designated site for all future casino expansion.
With the new project, Wynn will be trying to catch up to rivals including billionaire Sheldon Adelson’s Las Vegas Sands Corp., which has four resorts, including three on Cotai.