Sheldon Adelson Defends Macau Officials after Steve Wynn Criticized Them
In discussing his casino company’s 3rd Quarter revenue reports, Las Vegas Sands Corp chairman Sheldon Adelson made comments directed at Steve Wynn’s recent comments about Chinese officials. In a call with gaming analysts, Mr. Adelson defended Macau bureaucrats, who had not decided policies for several new resort-casinos set to open on the Cotai Strip in the coming months.
Sheldon Adelson Quotes
To begin, Adelson said his company had “always been respectful” of Macau’s officials. Then he told the gaming analysts that “our gaming license in Macau is a privilege, not a right.” Sheldon Adelson next admitted that he could hope for policies to be better in Macau, but “we’re in China, so let the Chinese decide what they want to do.”
The quotes were no doubt designed for the ears of Chinese gaming officials, who will decide on the financial fate of all the casinos operating in China’s gaming destination. But they were a pointed criticism of Steve Wynn.
Steve Wynn Quotes
Last week, Steve Wynn made critical comments of Macau’s officials, because he could not receive an indication of how many gaming tables the Wynn Palace casino would receive. The Wynn Palace is set to open in March 2016 and Steve Wynn hoped it would have 500 gaming tables. Studio City, which was 3 weeks from opening (two weeks now), had received word it would likely receive 150 gaming tables (later raised to 250).
In response, Wynn said Macau’s officials’ policy was to “undermine and scuttle” the casino industry of Macau, which he called “rather mystical policies”. Later, he said those policies were “the “singlemost counterintuitive and irrational decision ever made”. Calling on the government to “intervene and correct this aberration”, because the Macau table cap policy has “turned human resources planning inside out and upside down”.
Steve Wynn went on to defend Melco Crown’s City of Dreams, saying it was troubling that a company would not be told how many tables they would have a few short weeks after building a $2 billion casino. He cited the need to hire and train employees in such cases, then suggested he might have to fire some of his own staff, if no word on Wynn Palace’s tables were forthcoming. The obvious implication is it would cost Macau residents good jobs.
Sheldon Adelson vs Steve Wynn
The public jousting between the two Las Vegas gaming executives is the latest in a complicated relationship. Sheldon Adelson and Steve Wynn have been colleagues and competitors for decades. Both have representatives on the board of directors of the American Gaming Association, which sees to the business interests of U.S. casino operators, horse racing interests, lottery companies, and gaming machine manufacturers.
At the same time, Wynn and Adelson had a war of words back in the 1990s, when Steve Wynn was the toast of Las Vegas and Sheldon Adelson’s Las Vegas Sands was seen as a second-tier gaming operator. Later, the two became leading figures in the vast expansion of the Macau gaming industry. As Macau replaced Las Vegas as the world’s gaming capital, both saw their casino companies’ stock rise, flooding both companies with billions of dollars in new funds.
Friends and Strategic Allies
The two appeared to have a strategic alliance. As late as October 2014, the two appeared at the Global Gaming Expo and Sheldon Adelson pointed to Steve Wynn in the audience and described his decades-long rival as his “friend”.
Of course, it is a minor dustup in the emotionally-charged Chinese gaming environment. Both companies saw the Beijing government’s crackdown on corruption affect their company’s bottom lines. Beijing’s scrutiny led to Macau’s officials instituting their own crackdown on the city’s VIP junket operators.
The Macau Table Cap
The new policies cost Wynn Resorts and Las Vegas Sands billions of dollars apiece. From June 2014 until the present, both companies’ stock prices have dropped between 30% and 40%–and sometimes as high as 50% from the peak numbers. Even worse, the institution of punitive new policies could put in jeopardy the financial well-being of the billion-dollar resorts being developed on the Cotai Strip. Galaxy Entertainment, Melco Crown, LVS, Wynn Resorts, and MGM Resorts all have casinos set to open there in the next few years, but they might not make near the money they were supposed to make, when the developers first began planning such ventures.
Under the circumstances, Sheldon Adelson might have decided it’s better to play good-cop, bad-cop with the Macau gaming officials. In a country known for the insolence of its government officials, it is probably best not to pull on the tiger’s tail. Steve Wynn’s comments were notable and, in retrospect, a savvy businessman like himself might have regretted making some of them. Sheldon Adelson might be trying to calm down the tiger, to serve the interests of his industry.
