Wynn assures stockholders resort is off to a good start

By Liz Benston

Tuesday, May 3, 2005 | 10:51 a.m.

Warning shareholders not to judge the long-term performance of his resort based on its opening weekend, Steve Wynn nevertheless dropped several hints at the company's annual stockholders meeting Monday to suggest that his new resort was off to a good start.

The $2.7 billion Wynn Las Vegas, which opened to a horde of about 10,000 visitors at midnight Wednesday, had a full hotel over the weekend and hosted a number of Asian high rollers in its high-end gambling area, Wynn told an audience of several hundred shareholders at the resort.

"These are people who can afford to go anywhere and do anything," he said. Some customers arrived in Las Vegas on private jets and came from as far as Saudi Arabia, Hong Kong, Taiwan, Tokyo, India and Europe as well as "every major capital" in the United States.

In addition, slot machine volume and slot machine revenue "staggered us" based on expectations derived from returns at Bellagio, Wynn said.

Wynn -- whose Mirage and Bellagio resorts broke all-time performance records -- said it could take weeks for the resort to hit its stride.

"You can't intellectualize it," he said. "If you're teaching a child how to swim at some point you've got to throw the kid in the pool."

Wynn said he has learned to "keep big promises" for shareholders over time.

"You have to (have) more than a jazzy weekend," he said.

Wynn said his board of directors will consider offering a shareholder dividend because of lowered taxes on dividend distributions. Wynn said he's historically opposed dividends because they can cut into the benefit of compounded, tax-free growth.

Wynn said his previous company, Mirage Resorts Inc., reported a compound growth rate of 25 percent from 1973 to 2000 when it was sold to MGM Grand. That was twice what the Disney and Coca-Cola companies returned to shareholders over that period and compares to a 12 percent return for the Standard & Poor's 500 Index.

Wynn also said the company's other two resorts -- one in Macau, China and the other going up next door to Wynn Las Vegas -- are well under way. In Macau, 12 of Wynn Macau's 22 floors are built so far. The $700 million resort will have about 600 rooms and is expected to open in the third quarter of 2006. Encore, which will be attached to Wynn Las Vegas and be built on 20 acres just north of the Wynn resort, will be built for $1.4 billion and feature more than 2,000 suites.

The company also is exploring how to best develop the remaining acreage of the 240-acre-plus site of the old Desert Inn. Given rising land prices, the company's 142-acre golf course at Wynn Las Vegas will likely be redeveloped, Wynn said. Wynn Las Vegas, including the golf course, sits on about 215 acres.

A few final touches were made to Wynn Las Vegas after its grand opening, Wynn said. The company's contractors will likely put up a fight for overtime pay, he said.

"We'll settle up and everyone will be happy," he said.

Wynn thanked his shareholders for their support and said he recognized "many familiar faces" from his days running Mirage.

Like an Academy Award recipient reeling off names of supporters, Wynn introduced more than two dozen top executives and managers, telling stories about some of them and asking them to stand for applause.

In response to a shareholder question, Wynn said he has signed over to the company the rights to use his name for commercial purposes and has copyrighted the brand.

In addition to signing his name to the resort, Wynn products are for sale in the retail store, including a chocolate replica of the resort and loungewear with the Wynn logo in rhinestones.

"I ask my employees to call me Steve," Wynn said. "There's enough Wynn on this building to last a lifetime."

One shareholder complained about the high-limit slot area and said it offered little in the way of choice. Customers were waiting for available machines and others were jamming because so many customers were using them, the shareholder said.

"Your input and feedback is exactly what we need," Wynn said. "We're going to fix that so fast ... if you think we were a little unprepared you're correct."

Some shareholders said today was their first day seeing Wynn Las Vegas and that they chose to avoid the crush of people on opening night last Thursday.

Carol Orrico, who lives near Chicago, said she invested in Wynn Las Vegas immediately following the company's initial public offering.

Orrico said she has been impressed with Wynn's other resorts in Las Vegas.

"I bought at $13 a share and if I knew where it would be today I would have bought 10 times that," she said. "I watch (the stock price) daily."

"It's thrilling to be part of it," she said of the company. Wynn "is successful in everything he does."

Gary Flynn, who lives near Detroit, said he decided to take a chance on Wynn Resorts after he "did well" investing in Mirage Resorts.

Wynn "has transformed this town," he said.

Shares of Wynn Resorts fell more than 4 percent to $50.62 per share Monday. Over the past 12 months, the stock has traded as low as $34.18 and as high as $76.45 per share.