Although the Massachusetts Gaming Commission put Wynn Resorts through the wringer this past week, when the chips were down Wynn emerged the 
winner by a 3-1 vote. The positive verdict comes with some conditions, so a second vote will be held Wednesday, to ratify yesterday’s verdict. Though the process has been contentious, Steve Wynn was in a conciliatory mood, saying, “We expect that now that a decision has been made, everybody will find it much easier to relate to one another, get on with the job of creating jobs and building a better life for the citizens of Everett and the surrounding communities in the Greater Boston area.”
Or, as Everett Mayor Carlo DeMaria said, “We’ll no longer be the butt-end of Boston.”
“The process however is not over as the vote to repeal gaming remains on the ballot for November,” cautioned Deutsche Bank analyst Carlo Santarelli. “We see the likelihood of a repeal as low. “Assuming the repeal initiative is voted down in November, we anticipate [Wynn] will begin work on the project in early 2015, with a projected opening in mid-2017.” The project cost is pegged in the neighborhood of $1.5 billion. Higher job-creation numbers (3,300 to 2,500 to Mohegan Sun‘s 2,500) also told in Wynn’s favor with the MGC.
“While we anticipate, given surrounding population density and demographics, a healthy cash on cash return, we think the stock debate centers largely around uses of capital,” Santarelli added. “We think some will make the case that a capital return via a buyback, with [Wynn Palace] on the horizon and undervalued, could have ultimately proven to be a more sound return on invested capital.”
As should expected, Suffolk Downs is already threatening to close. Its approach has always been to hold the ponies hostage to getting a casino — which proved to be an unpersuasive tactic in the end. Track representative claim Suffolk Downs can’t survive without slots, but casino selection in Massachusetts hasn’t been a welfare program for failing businesses.
Wynn won by making some strategic concessions, including indicating a willingness to rethink the design of its hotel tower — which is pretty unimaginative by Wynn standards. It also increased its mitigation fees to Boston to $75 million, although there’s no guarantee that splenetic Beantown Mayor Martin “McCheese” Walsh won’t file a lawsuit to halt the project. If so, he’ll be standing in the way of jobs that will pay more than those at Mohegan Sun would have.
Though the pro-Wynn vote was a no-brainer and should have been unanimous — commissioner Enrique Zuniga said Wynn’s proposal was “the one I believe can fare better in a competitive market” — commissioner James McHugh stuck by Mohegan Sun right to the end, arguing that traffic-mitigation and environmental-cleanup issues would delay Wynn’s timeline for opening. That’s considerably less than a positive case for Mohegan Sun, though.
* Boyd Gaming and COO Paul Chakmak are parting ways, amicably, effective this Friday. CEO Keith Smith will wear two hats, donning that of COO, thereby consolidating two positions into one. “Given today’s operating environment, we believe that more direct oversight and a streamlined decision-making process will position us to improve our operating performance going forward and allow us to execute our growth strategy more quickly and effectively,” was his rationale for the change. Boyd has been tinkering with its executive structure all year, including creating the position of chief marketing officer, a post you’d think the company is awfully late in creating, compared to the rest of the industry.
Smith paid tribute to the departing Chakmak, saying, “Paul helped strengthen our financial organization as CFO, and as COO he helped guide our operations through a period of significant expansion.”
