Wynn vs. Okada: Shooting the messenger; Ship of fools

By David McKee ~ March 8th, 2012 @ 3:53 pm

Stung by accusations from Wynn Resorts that erstwhile Shareholder #1 Kazuo Okada had been greasing palms at PAGCOR, prompt action was taken by the Philippines House Committee on Games & Amusements. It promptly banned Steve Wynn. This comical, “circle the wagons” reaction witlessly validates Wynn’s indictment. Ditto the business-as-usual defense PAGCOR Chairman Cristino L. Naguiat Jr. offers for taking comps at Wynn Macau: ‘standard practice.’ If that’s the case, the Filipino government needs to get a new set of standards.

Okada apologist Bill Beatty sounds completely out to lunch when he proposes that PAGCOR’s 2015 opening of Entertainment City will shoot the Philippines past Macao and Singapore, into global primacy as a gambling destination. Compared to Macao’s $3.1 billion gross in January (and comparable February), PAGCOR’s $78 million haul looks pretty feeble. Since Universal Entertainment‘s $2 billion project at Entertainment City rolls merrily along, Manila‘s “official investigation” has the appearance of a charade to cover PAGCOR’s butt. Naguiat isn’t even required to take a leave of absence while this imbroglio plays itself out. For Wynn, the biggest worry may be whether he broke Macao’s Personal Data Protection Act by disclosing Naguiat’s little Macanese spree. However, with both Nevada courts and the SEC pondering l’affaire Okada, Wynn would stand to lose at home if he hushed the junket up. As for whether VIP players in Macao will now start to shun Wynn, for fear of being outed, the next few months’ revenue reports ought to tell that tale. But for the contention that Wynn be “pleading for mercy in the coming years” from PAGCOR, the only sane response is a gale of hysterical laughter. And, after seeing Wynn strung up by a kangaroo court, U.S. operators will be even leerier of a nation “whose reputation is questionable even by Asian gaming standards,” quoth the New York Times.

This brawl has many amusements, such as the effort by Wynn and Okada partisans alike to dispel the bromance image the two tycoons worked so hard to confect. Also, Naguiat’s high-roller suite at Wynn Macau included a shower big enough for six people. Maybe we should just drop the hygienic pretense and call it a “private orgy chamber.” Then there was the “Yes, we did … uh, no we didn’t” pratfall involving another false proclamation that Wynn Cotai was a “go.” Luckily, no insider transactions took place during the ensuing bounce in WYNN shares, or else Wynn Resorts really would find itself “pleading for mercy” — from Uncle Sam.

Not to be outdone by Wynn in the race for Massachusetts, suitor MGM Resorts International has launched its own charm offensive. (To be pedantic, MGM and Wynn aren’t competing for the same license but they’re both engaged in high-profile courtship.) MGM has opened a local office, set up an informational phone line and created a Web site for its proposed, “sustainable” casino. Soon it will be publishing a newsletter, too. The Web site isn’t glitch-free — the topographical PDF hasn’t been correctly linked — but the lion is putting its best paw forward. However, in the battle of the balance sheets (a criterion for licensing), Ameristar Casinos still has the edge. Penn National Gaming hasn’t settled upon a site, Mohegan Sun‘s Palmer project is an transparent stalking horse for the parent property in Connecticut and Hard Rock International/Paper City Development is butting heads with Holyoke‘s mayor. Right now, it looks like it’s Ameristar’s game to lose.

It’s been from bad to worse for the former Harrah’s Entertainment riverboat in Vicksburg. When it went private, Harrah’s offloaded the boat to skinflint Columbia Sussex. The latter’s Tropicana Entertainment subsidiary went bankrupt, but not before then-CEO Scott Butera had scuttled a $35 million sale to Nevada Gold. TropEnt was taken over by Carl Icahn and eventually palmed the casino off on ultra-obscure Tangent Gaming (for a pitiful and puny $3.25 million). Tangent renamed this ship of fools Grand Station. In less than a year, Tangent — aka Delta Investments & Developmentis being foreclosed upon by Bally Technologies for $3 million worth of slot machines and other equipment. The ex-Harrah’s Vicksburg is clearly an ill-starred vessel. But if you want a casino and have $3 million lying about, Bally will probably take your call.

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