Wynn Resorts 3Q15 Earnings Call Notes

Wynn Resorts’ (WYNN) CEO Steve Wynn on Q3 2015 Results

Government policy is making it difficult to plan in Macau

“I mentioned this early in the conversation because it’s become a major issue in Macau as to the impact of government policy on and planning for employment, promotions, hiring and compensation. None of us are really clear on what our environment is going to be like going forward. And it makes planning and adjusting almost a mystical process. And this is the I think probably the major topic of conversation in executive conference rooms as people try and resolve their planning on human resources in the Macau market…I have no idea how many tables we’re going to have. The notion that a person who spent $2.5 billion, I’m talking about Melco now, would not know how many tables are going to have three weeks before they open is preposterous. It’s worthy of comment. ”

Away from Asian effected segments, Las Vegas doing pretty well

“Any change in our earnings in Las Vegas is strictly a reflection of a drop in Asian baccarat business. The rest of the segments in our Las Vegas business are pretty good. Room revenue and stuff like that is healthy. Our convention business is healthy; our food and beverage business is healthy. And we’re very satisfied with Las Vegas. And if anything, the problems in China are causing us to refocus our energies here in America even more intensely.”

Our perception of the present is a function of our expectations of the future

“Everybody in the world including all of a sudden it’s call today, it has been established that our present state of mind, our happiness, our sense of security is fundamentally a function of how we view tomorrow or the future. You tell someone this feeling poorly, suffering from ailment or some discomfort that they are going to be better in three days and they feel better today. You’ll tell someone who is feeling great today that they are going to be awfully sick next week and they get depressed today.”

The Chinese government has gone on a campaign against corruption

“from what we understand, reading the South China Morning Post and other source of information available to us, President Xi discovered that the people of China felt that government officials were corrupt and feathering their own nest. And he thought that that was very malignant for the health of his party and the future of his country and made a decision to correct that and have a campaign against corruption.”

Everyone in China does business with the government because they control everything

“And because of the way China, mainland China works, every businessman in that country dealt in one way or another with a government official because the government controls so many aspects of public policy and business interface.”

So businessmen basically went into hiding in reaction

So businessmen who had nothing to hide as well as those who might have had something to hide all went into the fox holes or into a defensive posture because they didn’t know if the next shoe was going to drop or what the next thing was going to happen. And it is caused across the board, a contraction of all VIP consumer spending at the higher level, which includes Macau.”

My job is really not that different from Xi Jinping’s

“At the end of the day, I am in the same position as this Head of the Macau government and for that matter President Xi Jinping. My job is to create a stable environment in terms of human resources, job security and a better future for people..And the job leaders are to do everything and anything in their power to create a happy and positive outlook to the future for their constituencies.”

Whether your a CEO or head of government you have to have vision

“whether you’re a CEO of a company or you’re the head of a government, you have to have a little bit of ability to look around the corner and see what’s coming ahead of you. And if that’s not good, turn away from it, amend your policies, learn from experience and come to a more sound conclusion.”

Well it wasn’t fun but at least we were honest

“Well, I don’t know that this has been the most satisfying quarterly phone call we’ve ever had but at least it’s the most candid and the most honest one that we could possibly give everybody that is interested in our company. And hopefully, it sheds light; it shares real intelligence and insight on the inevitability of anything that interferes with the long-term health of Macau or Las Vegas for that matter. And I’ve done my best to shine a light on that subject. “