Things are heating up as the battle for board influence continues for Elaine Wynn, co-founder and majority shareholder of Wynn Resorts Ltd. The future of the company has encountered turmoil as the allegations of sexual misconduct against former Wynn CEO Steve Wynn continue. Elaine Wynn has continued her fight as majority shareholder against what she has described as a resisting “legacy board”. The focus of her energy has been set against current sitting director Jay Hagenbuch, who Wynn has claimed unfit to continue as supervisor.
The corporate advisory firms Glass Lewis (GL) and Institutional Shareholder Services (ISS) have pressured the existing board members by stating that Hagenbuch not seek re-election later this month. Negotiations have remained contentious as Elaine Wynn looks to dismantle what she has referred to as the “old boy’s [Steve Wynn] network” of supporters, claiming that Hagenbuch is only further contributing to what ISS referred to as “a legacy board that oversaw material failures in governance and risk oversight”. Just last week, GL announced that re-election of Mr. Hagenbuch would only further complicate matters as his role in regards to the company has been questionable at best as he is not seeking the best interests of the Wynn Corporation; further adding that he shared culpability for “years of misaligned compensation practices” to protect the former CEO Wynn.
Ex-CEO Wynn has filed a series of personal lawsuits against Elaine Wynn for defamation, stating that not only are the accusations against him unfounded, but also are nothing more than a vendetta campaign. Elaine Wynn, on the other hand, has repeatedly stated that Hagenbuch’s unflinching support for Steve Wynn proves that he is unworthy to continue as director of the board; adding that her efforts to contact certain shareholders to vote him off as director amidst upcoming elections have been hindered due to opposition from other members whom she would not name. Steve Wynn, who successfully sold his company shares earlier his year has continued to proclaim his innocence in reference to the allegations, yet remains unable to make official board decisions. Elaine Wynn has proposed to nominate three women for potential election onto the board as she looks to establish new leadership.
Goa spikes casino fees and operators face the consequences
The state government of Goa has recently increased the licensing fees for its region’s casinos and holds firm on its decision despite calls for appeals. “There is no question of rolling back the fees,” claimed a senior finance department official after the hike was announced. Goa, which is located on the western coast of the Indian peninsula, holds a total of six offshore and nine land-based casino establishments. In efforts to boost annual tax revenues, casino license fees increased nearly five-fold and came into effect April 1 of this year. Operators now face the ultimatum to make the required payments or have their licenses revoked by Goa state authorities.
The region’s largest English language news publication, The Navhind Times, reported that a total eleven casinos – five of the six floating casinos and six of the land-based venues – had paid the new fees in accordance with the state’s timeframe. Despite crying foul, land-based casino operators have further requested that live gambling be added to their venues in order to deal with mounting operational coasts. As legislation currently stands, live gambling is allowed only aboard ships fitted with gambling floors, known as floating casinos. Not everyone has agreed to the new terms however. Two major operators – the Crown and Carnival casinos – shut down their operations entirely rather than opting to pay up. Other operators, such as online poker giant Spartan Poker, have not been ill affected by the changes; even taking on new acquisitions including ownership of a new remodeled floating casino.
Macau’s latest casino hotspot to forgo junkets
The City of Dreams casino resort is set to open the 160-meter tall Morpheus hotel-casino later this month, Macau’s newest Cotai Strip landmark. The $1 billion, 39-story megastructure is set to house some 770 rooms, event facilities and casino floors intended exclusively for premium mass customers. The hotel-casino, which is owned and operated by Melco Resorts and Entertainment, and designed by the late award-winning architect Dame Zaha Hadid, DBE, is a breakthrough in architectural design, and engineering. It is the world’s first high-rise building supported by a free-form exoskeleton steel structure, and a modern marvel in construction and artisanship highlighting unique exterior.
However, perhaps even more unusual is a recent announcement from Macau casino magnate and Melco Resorts CEO, Lawrence Ho, who stated that the new mega-resort would operate without relying on casino junkets. Casino junkets offer complementary packages intended as gambling incentives for casino VIPs. VIP players are so valuable in Macau that they make up almost 60% of all of the region’s annual casino revenue. Experts estimate that the average VIP bets about HK$1 million (roughly $128,000) per casino visit while premium mass customers bet in thousands of HKD. The gambling revenues of Macau have been at record highs over the last year, with a remarkable 28-percent spike from last month compared to 2017. “Year-to-date growth right now is well over 20 percent. It will normalize but will still blow out the original expectations,” Ho stated in a recent statement to the Reuters news agency.
The autonomous Chinese territory is in a unique position as VIP players come through junkets to circumvent strict Chinese anti-money laundering and gambling regulations. The junkets coordinate with VIPs on behalf of the casinos, because casinos cannot do so on their own. Junkets essentially provide cover for the casinos to provide the needed credit that premium VIPs require for staking large wagers because such vast sums of money cannot be transferred across borders. The various junkets compete with one another for the highest “bidders” by way of casino amenities. Only time will tell how long Morpheus can sustain such junket-free operations by relying solely on premium mass clientele.
Gambling industry of Germany showing positives
The German economy showed positive numbers last year, which in turn have helped boost the nation’s gaming industry to record a 2.1% positive bracket based of €13.49 billion ($16.01 billion) in gross gaming revenues in comparison to May of last year. A report from Goldmedia Strategy Consulting has shown a consistent increase with a nearly nine percent rise compared to averages from 2015, proving a whopping increase of nearly 1 billion euro biennial gambling earnings for the country. GSC, which is based out of Berlin, are including all gambling revenue from the nation’s lottery to sports betting as well as casino and slot operators.
Betting in sports in particular has seen the biggest increase in profit margins; with gross annual gaming revenue in a 17% swell in year-on-year comparisons (up almost a third when considering the two-year numbers). Analysts predict that the rise will continue as the 2018 FIFA World Cup is fast approaching, providing ‘favorable operating conditions’ throughout the country. Despite the positive trend, things could change in the near future as stricter gambling legislation is introduced limiting the number of venues as well as minimum distance regulations starting at the end of 2018, according to GSC.