Wynn Calls Macau's Bluff With New $4 Bln Resort

Wynn Calls Macau's Bluff With New $4 Bln Resort

gaming apparelBy Farah Master

MACAU, Aug 17 (Reut?rs) - U.?. casino tycoon St?ve Wynn'? newest ?leasure palace in Macau boasts m?ssive dancing fount?ins b?t t?e Chinese territory is anyth?ng but bubbly as it prepares to welcome the $4 billion resort to its strug?ling glitter strip next week.

Macau's m?st expensive casino yet ?s due to ?pen on Monday a month ahead of a $3 billion gaming resort by U.S. billionai?e Sheldon Adelson, ma?king the beginning of the end of a boom ?n grandiose c?sino construction that helped transform the former Portug?ese colony into the gambling cap?tal of the world.

But the pr?perties - featuring thousands of hotel room?, an aerial gondola and a scale vers?on of the Eiffel - ?re opening as Macau gambling revenues languish at 5-ye?r lows and a corruption crackdown forces Chinese high-roll??s to play in rival Asian destinations.

Casino bosses are up?eat, saying the new r?sorts on the Cotai strip will breathe life back into Macau, which generates 5 times more ?ambling revenue than Las Vegas. Analysts however warn that additional supply coul? increase competition at a time when operators are already offering discounts to lure patrons.

"If they (Wynn) had known they definitely would not have spent $4 billion, they probably would have spent something like $1 billion," Nomura analyst Richard Huang ??id in Hong Kong.

Wynn Macau's ne?est propert?, Wynn Pal?ce, wo?ld b? profita?le, Huang ?aid, but it wou?d likely generate a disappointing return on investment. With hindsight, it wa? clear that the operator?, particularly Wynn, mis?alculated their expansion during the ?oom years, he added.

Planned several years ago when soaring revenues seemed unstoppable, the projects initi?lly forecasted earnings about fo?r times ?igger than what is cu?rently be?ng generated.

Macau is the only pl?ce in China where gam?ling in casinos is legal but dem?nd from wealthy patrons has plummeted over the pa?t two years due to Bei?ing's crackdown on graft and China's slowing economy. ?egional rivals like the Phil?ppines and Vietnam, meanwhile, h?v? sought to capitalise on the s?tuation by luring Chinese gamblers to their own casino hubs.

New openings from Melco Crown and Galaxy Entertainment l?st yea? have not significantly b?lstered receipts, whi?e operators are being frustrated by strict official limits on gaming memes table al?ocations.

Wynn Macau's share price tumble? after it confirmed it had received only a th?rd of the gaming tables it had requested from regulators, as th? government tries to wean itself off gaming computer revenues ?nd ?e-brand Macau ?s a more m?ss-market "tourism and leisure" de?tination.

"Although we remain confident in Wynn's ability to open Wynn Palace successfully, even with the designated table allocation, we are less certain about the longer-term forecast," John De?ree, di?ector at Union Gaming in New York, wrote in a note this ?eek.

Wynn P?lace and Adelson's Parisian res?rt, due to open on Sept. 13, will a?d c?ose to 5,000 hotel rooms. ?GM China, , SJM Holdings and Th? 13 Holding are al?o set to open multibillion resorts in t?e next two yea?s.

(Repo?ting b? Farah Master; Editing by Ste?hen Coates)

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