There’s a lesson here.
Don’t think that you can tell the Macau government – and by extension China – what to do, not even if you’re casino-billionaire Steve Wynn.
You’ll get a smackdown.
For Wynn, that smackdown came in the form of the Macau government dragging his China CEO – and, in fact, all the CEOs in the casino industry – into an uncomfortable, discouraging private meeting Sunday, according to Bloomberg.
We don’t know what was said, but we can get the gist of it based on a release the government put out afterward.
The statement said that Macau has “no plan to make any changes” to its current policies on the industry, though it does regret certain opinions about its labor plans.
That was a direct shot at Wynn, though he’s not mentioned in the statement.
It also demands “clear understanding and full compliance” from all the businesses involved.
Wynn’s stock fell 7.3% on the news.
The Chinese government has been clamping down on casino-industry activity for over a year, resulting in precipitous 30% to 50% drops in gambling revenue month after month, on a year-over-year basis.
Last week, Wynn, founder of Wynn Entertainment, attacked one specific way the government has squeezed the business after a dismal third-quarter earnings announcement, in which revenue from his Macau casino fell 37.9% from the same time last year.
On a conference call following the release, he made an impassioned call for the Macau government to stop restricting the number of tables in new casino projects in Macau.
“In my 45 years of experience, I’ve never seen anything like this before,” he said.
Wynn is opening a new casino in the territory in 2016, so he’s been watching what happened to this year’s new casino projects from peers Galaxy and Melco with dismay.
- Kawaii Kiri / Flickr, CC
“The notion that someone who has spent $2.5 billion, and I’m talking about Melco now, doesn’t know how many tables they’re going to have … weeks before opening is preposterous,” he said.
He railed against what that would do to employment. He called the government’s moves an “aberration.” He blamed China’s crackdown on gamblers for weakness in his Las Vegas business, too.
“Any drop in our earnings in Las Vegas is a result of a drop in our Asian baccarat business,” Wynn said on the call. “If anything, the problems in China are causing us to refocus our energies in America.”
You just don’t get to say things like that about China if you’re trying to make money in China, but that has always seemed fairly obvious.