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Wynn Outlines Growth Prospects

Travis Hoium
March 5, 2012

Shares of Wynn Resorts (Nasdaq: WYNN  ) have been on a tear recently, due to speculation about the company's upcoming growth plans. Last week, the company outlined a potential resort and casino near the New England Patriots' home in Foxboro, Mass., and for a second we thought the company made another step forward in expanding in Macau.

Football : Gambling :: Apple pie : America
Wynn is betting that a partnership with Robert Kraft and a location across from his football stadium will convince Foxboro residents that he should be allowed to build a resort there. The CEO sent a brochure and 20-minute DVD to residents with renderings and details about the project. Right now, it's slated to be a $1 billion development with 5,000 parking spots and convention facilities. It could bring up to $15 million in new revenue for the community.

This is another example of expanding gaming throughout the U.S., something that largely hasn't helped gaming as a whole. Foxwoods and Mohegan Sun, which attract Massachusetts customers, are already worried about new competition after business fell off during the recession. In a relatively small area we have Las Vegas Sands' (NYSE: LVS  ) Pennsylvania casino, Atlantic City, tribal casinos, and a slew of racetracks in the northeast. Recent earnings reports from Caesars Entertainment (Nasdaq: CZR  ) , Boyd Gaming, and Penn National show that fighting for regional casinos isn't as profitable as it once was.

An expansion into Massachusetts might be a profitable move for Wynn Resorts, but Las Vegas Sands has proven in Pennsylvania that it isn't like the other opportunity in Macau.

Cotai on the mind
There was excitement in the market on Friday after it was announced that the company's land concession in Macau had been published in the official gazette of Macau. But soon after, the company retracted the disclosure, saying it was published by accident by the company's agent.

Even if it was a mistake, we can read between the lines and assume a land concession deal is likely coming in the near future. Wynn has been waiting on the Macau government to start construction in earnest, and with Sands Cotai Central opening in about a month, the timing seems about right.

Macau update