Why should any of the major Nevada resort companies want to build a casino in Massachusetts? Are the rewards worth the hurdles?
Questions like these are at the heart of an ongoing drama that oozes frustration and explosive exchanges, a drama that may wear down the most ambitious suitors hoping to land one of several licenses to be issued by the state.
Massachusetts has already concluded that Caesars Entertainment is lacking. The company was forced to withdraw from a joint venture that had proposed a Boston area resort.
Wynn and MGM Resorts are now in the crosshairs as investigators push forward from one issue to the next. It is clear Wynn resents the tone and approaches “freshman” regulators in Massachusetts are aiming at Wynn Resorts and its top executives.
We had not yet heard from MGM as of late last week, but you can bet its top bosses and lawyers are working on their own answers to some of the same issues faced by Caesars and Wynn.
Wouldn’t you love to be a fly on the wall at upcoming board meetings of the Wynn Resorts directors? MGM and Wynn each have a significant presence in Macau, a land that is probably viewed as a hotbed of suspicious activity by Massachusetts officials who appear to feel no relationship is too obscure or distant enough to be ignored.
Wynn’s frustration was clear as he responded to recent conference call questions from financial analysts seeking updates on Massachusetts licensing issues.
“I don’t know when they’re going to decide or how they do it.” Wynn said. “We don’t get conversations with these people. We can’t have a dialogue.”
That’s because of an “expanded ethics” requirement put in place to eliminate any appearance of conflict. The result is that important conversations do not occur.
And what’s at stake? Billions of dollars in development spending and the tax revenue and thousands of jobs it will all produce.
“It’s hard to tell where you stand in many respects,” Wynn said, struggling to keep a tight rein on his anger because he does not want to appear “arrogant.” “I don’t know that I am entirely comfortable being in this position,” he added.
Wynn was probably hoping the regulators in charge of the Massachusetts process were listening carefully as he addressed analysts. He was “flabbergasted” at the unexpected events that led to Caesars getting pushed out of a partnership agreement.
These Massachusetts people…they project the view that their preferred impressions of Las Vegas and the casino business come from old gangster films.
Wynn told of regulators asking one of his outside directors for proof of the ownership of his car. Another investigator asked a member of the company board for proof of his marriage license.
“For crying out loud,” he exploded. “How ridiculous.”
Wynn Resorts has become an increasingly Asian company during recent years. It’s a trend that will not be reversed any time soon. Wynn says he is intrigued by the opportunities for resurrecting the era of the “grand hotel,” in the U.S., beginning in Boston and Philadelphia and then perhaps taking the concept to other cities as gaming is approved.
This kind of domestic growth might lead to the creation of a “Wynn America” branding, driving the development of databases that would provide important balance to the company in its worldwide reach for customers.
Domestic gaming revenue, he said, has not grown at the same rate as nongaming revenue during recent years. But to accomplish this he has to struggle in some jurisdictions past outdated attitudes that suggest there is something “unsavory” about the gaming business.
I remember sitting through a Nevada Gaming Commission meeting more than 30 years ago, a time when Nevada officials were agonizing over whether Caesars World should be allowed to go to Atlantic City.
Was New Jersey was going to make mistakes that would put Nevada’s principal industry in a bad light? Investment and growth might be discouraged if New Jersey screwed things up.
New Jersey certainly made mistakes as its early regulators often took positions that resembled what we’re seeing now in Massachusetts where some of the casino cops have not paid attention to those history lessons.
Nevada officials could see the benefits of a big picture image long before regulators in other states realized there was a picture.
Phil Hevener has been writing about the Nevada gaming business for more than 30 years. He can be reached at [email protected]ngToday.com.