Quick Hits: Will New Vegas Casino be a Wynn-Win?
Brief scrutiny of today's headlines.
After 2 years of construction, the Encore Las Vegas will open to the public tonight in the midst of the gaming industry's sharp decline. A $2.3 billion, 2034-room hotel, the Encore was initially planned as an addition to the Wynn Las Vegas (WYNN), but ultimately became its own resort.
While a great many think the ribbon-cutting ceremony is the equivalent of putting that last stack of chips on 17 and hoping for the best, CEO Steve Wynn -- who breathed life into Las Vegas' theme era with the Mirage and era of opulence with the Bellagio -- remains cautiously optimistic
"The economy absolutely concerns me. I've never experienced anything like this," Wynn told the Las Vegas Review-Journal. But "because we're financially secure, we look upon this as a management challenge."
Though the company has lost half of its stock value this year, it's sitting pretty compared to competitors MGM Mirage (MGM) and Las Vegas Sands (LVS), which have sustained losses of 80% and 90% respectively. Analysts estimate Wynn Resorts will earn revenues of $3.11 billion this year.
But Deutsche Bank's Bill Lerner is quick to point out that the casino operator is still very much at the whim of the overall economy, despite the initial boost the Encore will get from word of mouth.
"I can't imagine Encore will grow the market dramatically," Lerner said in the same article. "I suspect it will take business from its peers, including Wynn Las Vegas."
It's a gamble Steve Wynn is prepared to take.
Daily Recap Newsletter