Winds of change blow as rumors circulate, owes city millions
By JOSH RESNEK
The reopening of Encore Boston Harbor’s casino was expected to begin on Monday. Wynn Resorts officials have moved that off another week.
At the same time, Governor Baker put off casino reopening in Massachusetts for a week, no matter what the private companies are planning.
Wynn Resorts officials are believed to be relieved with the reopening, but it does not go far enough to satisfy executives who know that a casino operating at less than half speed and capacity cannot cut a profit necessary to meet its obligations.
As a result, Las Vegas Sands Corporation, owned by one of the world’s ten richest men, Sheldon Adelson, is apparently willing, as well as financially able, to buy Wynn Resorts and add it to his worldwide gaming empire, according to a spate of casino trade magazine reports online.
Whether or not this happens is highly speculative and based on the comments of several higher-ranking Wynn Resorts employees who have access to inside information.
Matt Maddox, Wynn president and heir apparent to company founder Steve Wynn, has denied such rumors.
In today’s apocalyptic economic environment, everything is for sale at a lower or fairer price.
“The people up top are apparently saying that Encore Boston Harbor may have to be rebranded. This is not anything they want to do at the present time. Spending more money on the Encore investment in Everett to change it is not in the stars right now,” an employee told the Leader Herald.
He said nearly everyone working there is concerned that business won’t be enough to sustain the place for the next few years or at least until a vaccine can be found to nullify the Coronavirus and our need to social distance as a way of life.
“What Steve Wynn thought would be a five-star magnet for the very rich in Greater Boston, has so far been an earnings disappointment,” said the employee. “Even before the shutdown, executives were wondering what would work better to attract more customers and dollars into the casino and hotel,” he added.
The shutdown has been devastating to Encore and the city as well.
Many employees have been laid off who were hired from the local geography. Encore is late paying about $12 million in lieu of taxes to the city and additionally, the closed hotel is a loss of millions in room taxes – as much as $4- $5 million that been hoped for and expected by city officials. The state has lost tens of millions in taxes.
Right now, the biggest gamble of the mayor’s political life for the city, is proving to be anything but what had hoped for.
With Encore still closed and generating nothing, with the mayor laying off dozens of city employees along with the school department doing the same with its employees, and the city budget in disarray – with the city treasury almost empty – its game time.
Wynn stock has again tanked during the past two weeks of trading.
For the past four months, Wynn stock price has hovered between a low of $68 and a high of $100. The 52-week high for the stock was $153.00. The low for the same period was $35.
Last week, its market cap, the value of all its shares, sank to $7.45 billion. The week before, it had been closer to $10 billion. This time last year it was twice that number.
The dividend has been suspended to preserve cash.
Wynn Resorts remains cash rich with about $36 billion in cash on hand.
Industry experts agree that Wynn Resorts can survive with no money coming for a year and half.
The reopening in Macau, where Wynn generates about 75% of its total gaming in- come, has produced negligible revenue. The political and economic turmoil in nearby Hong Kong, about 35 miles away from Macau, weighs heavily on a return to what was normal.
The hotels are empty. The casinos are virtually empty. All those arriving must quarantine for two weeks, making crowds of visitors an impossibility for a while to come.
In Las Vegas, the situation is a bit better although hotels remain largely empty and casinos are not nearly as prosperous and crowded as they were this time just four months ago.
The virus is again running rampant in Nevada and the governor there has said the public’s safety and well-being trumps all other hands.
Here in Boston, the state has been transparent and tough about restrictions and requirements for reopening.
Casino analysts expect Massachusetts to lead the nation in new safety precautions for as long as the virus is present.
How this all works will be more apparent after July 6, assuming that is the day the casino reopens here.