Wynn CEO Matt Maddox Keeps Cards Close to His Vest When it Comes to Japan

Posted on: June 20, 2019, 03:38h. 

Last updated on: June 20, 2019, 03:48h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

While some rivals are overt with their intentions in Japan, Wynn Resorts. Ltd. (NASDAQ: WYNN) CEO Matt Maddox is taking a more a discreet approach to landing one of that country’s prized casino gaming licenses.

Wynn CEO Matt Maddox seen here in Las Vegas in 2018. In a recent interview, he said the company isn’t focusing on a specific Japanese city. (Image: AP Photo/Isaac Brekken)

In the quest to open integrated resorts in Japan, some operators are focusing on a specific location, but Maddox appears reluctant to have his company commit to a single city.

“We’ve been working on this for eight years,” said Maddox in an interview with CNBC. “We typically like to play a little more low profile. What I love about our strategy in Japan is we are known as the high quality operator.”

‘Various Cities’

As Tokyo prepares to host the 2020 Summer Olympics and local residents in Yokohama are opposed to casinos being located in Japan’s second-largest city, some operators are shifting their attention to Osaka.

MGM Resorts International (NYSE: MGM) and its partner, Japanese financial services group Orix, earlier this year revealed an intent to focus on developing a gaming property in Osaka. More recently, a high level executive from Las Vegas Sands Corp. (NYSE: LVS) indicated his company could also focus on Japan’s third-largest city in its bid to win one of the sought after Japan gaming licenses.

Maddox is making no such commitments to clearly defined Japanese metropolitan areas.

We have a consortium that we’re working with in various cities that we think will be one of the best competitors,” said the Wynn CEO in the CNBC interview.

When pressed about whether Wynn could follow the path traveled by MGM and dedicate its efforts to a single Japanese city, Maddox reiterated his company is considering multiple locations there.

“We are looking at multiple cities, so we’re not just saying we’re going after one city,” said Maddox.

Osaka is widely viewed as the frontrunner to garner one, if not all three of the licenses the Japanese government will make available. While Las Vegas-based Wynn is not exclusively committed to the city in similar fashion to MGM, the owner of the Encore is one of five operators taking part in Osaka’s request-for-concept (RFC) initiative that started two months ago.

Potential Diversifier

If Wynn is successful in procuring one of the Japan licenses, a footprint in the world’s third-largest economy could bolster the company’s efforts to diversify its revenue stream away from Macau. China’s gambling hub accounted for 75 percent of Wynn’s 2018 operating revenue.

Foreign casino operators’ hankering to enter Japan is understandable. By some estimates, the gaming market there could be worth $15.8 billion, if three integrated resorts are opened. Nevada had gross gaming revenue (GGR) of $11.9 billion in 2018.

Wynn’s Encore Boston Harbor, which opens Sunday, June 23, is being touted by some analysts as pivotal to the company’s efforts to enhance non-Macau revenue. Some analysts see that venue becoming one of the premier regional casinos in the US and eventually being more profitable on an earnings before interest, taxes, depreciation and amortization (EBITDA) basis than comparable existing properties located outside of Las Vegas.