Money Matters - Simplified

Wynn Launches Wynn Las Vegas


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Steve Wynn has designed some of the most famous hotel-casinos ever built. The billionaire's brainchildren -- The Mirage, Treasure Island and Bellagio -- ushered in new chapters in this city's over-the-top history.

Wynn is gambling once more. On Thursday, he opened the $ 2.7 billion Wynn Las Vegas, his triumphant return to the Las Vegas Strip. The supremely confident Wynn, 63, is wagering his reputation on Wynn Las Vegas and the adjacent Encore, a $ 1.4 billion hotel-casino scheduled to open in 2008.

But the high-end market he once dominated has changed since he lost control of Mirage Resorts and sold it to MGM billionaire Kirk Kerkorian in 2000.

MGM Mirage Inc., which now runs the palaces he built, controls the majority of the hotel rooms on the Strip now that it has completed its merger with Mandalay Resort Group. The multibillion dollar merger gives MGM Mirage ownership of 24 hotel-casinos, including The Mirage, Bellagio, MGM Grand, Treasure Island, Excalibur, Monte Carlo, Luxor and Mandalay Bay in Las Vegas.

And Wynn's new hotels will put him in direct competition with Las Vegas Sands Corp., parent of the Venetian megaresort and the 3,000-room Palazzo, which will open across from Wynn Las Vegas in 2007.

To win the hearts and dollars of tourists and overcome these hurdles, Wynn has spared little expense at his newest resort. By comparison, the Bellagio cost about $ 1.6 billion when it opened in 1998.

"I think people are going to be very surprised," Wynn said during a Nevada Gaming Commission meeting in which he received a license to run the casino.

Wynn put his curvy 2,700-room property on 217 acres. A tour reveals an intriguing design that differs in many ways from his previous hotel-casinos such as the Bellagio, The Mirage and Treasure Island.

"I think its an evolution of what he has done," said professor David Schwartz, who directs the Gaming Studies Research Center at University of Nevada, Las Vegas. "I think the theme is Wynn, which says luxury, sophistication, style."

Wynn told a crowd attending a dress rehearsal of Le Reve, a water-themed production, that Wynn Las Vegas was built on design risks.

There was a reason why he didn't release many details about the project when he first conceived it five years ago.

"We would have been accused of shameless overstatement . . . so we kept quiet," he said. "Talk small, build big."

While the days of dark, smoky casinos have long passed, Wynn has finally taken full advantage of the sun that illuminates this desert valley. Light pours into many of its spaces, providing a sense of openness.

Vibrant and distinct colors are everywhere from the powerful red carpets with purple and green to the chocolate-brown ceilings.

Wynn Las Vegas, on the northern end of the Las Vegas Strip, also embraces nature. He has built an atrium that connects the property's two main entrances filled with an array of mums and orchids. Waterfalls dot the front part of the property.

His restaurant, Okada, boasts an authentic Japanese garden with a pond teeming with vegetation found traditionally in Asia.

Other restaurants have patios facing a "Lake of Dreams," a watery area hidden behind a mountain of evergreen trees.

Two years ago, Wynn changed the casino's name from Le Reve to Wynn Las Vegas, believing the latter was more marketable.

But Le Reve didn't disappear: It's the title of his impressive art collection that the property will house, including its former namesake by Picasso, Le Reve.

Perhaps most striking about Wynn Las Vegas is that the traditional casino layout has been scuttled. The casino is no longer centerstage, dominating a visitor's attention and wallet.

Wynn has hired a gaggle of talented chefs. Entertainment includes a water-themed production and a version of the Broadway hit "Avenue Q" opening in September.

Many of the high-end restaurants and upscale shops such as Louis Vuitton and a Ferrari-Maserati dealership can be reached without traversing the casino floor.

But the real switch for Wynn this time around, more than 15 years after he opened The Mirage, is what he has done with his name.

Wynn is omnipresent. His name is on the casino's parapet, the two marquees and slot machines. He has a slew of stores, carrying Wynn clothes, Wynn china and Wynn home furnishings.

"This is the launching of a brand," said Ron Kramer, president of Wynn Resorts Ltd., the property's parent company.

But while waiting for the hotel to open, Wynn Resorts has yet to generate a profit. The company reported a loss of $ 205.6 million in its 2004 annual report. But many investors are betting he hits the jackpot again.

"All of his past projects have been extremely successful," said Marc Falcone, a gambling analyst with Deutsche Bank. "I think he deserves that respect."

The opening of Wynn's Mirage in 1989 is widely held as the start of the latest Las Vegas building boom. Five years after losing Mirage Resorts, the temptation to top himself and construct something even more spectacular proved irresistible.

Wynn Resorts has seen its stock price soar since its initial public offering of $ 13 in 2002, reaching a high of more than $ 76 this year. The stock has since tumbled after an analyst downgraded it, saying Wynn's balance sheet was nearly exhausted. Wynn also is building a $ 700 million casino in Macau and is bidding on one in Singapore.

Falcone, whose investment bank was the IPO's lead underwriter, said the stock's value is justified, and Wynn thinks people will agree once they glimpse the 2,700-room hotel-casino.

The company is betting the attractions will siphon guests from luxury hotels such as Bellagio, The Mirage and the Venetian.

His competitors counter they have prepared.

MGM Mirage added a $ 375 million, 928-room luxury tower to the Bellagio. Caesars Palace has undergone a dramatic transformation. The Venetian has bolstered efforts with a fancy gambling salon and suites to retain its Asian high rollers, among the wealthy gamblers Wynn covets.

"I'm not sure how much of a dogfight it will be, but that is where the biggest competitive threat looms," Falcone said.

MGM Mirage Chairman Terry Lanni said in an interview that his company has the upper hand in this business battle. He expects some cannibalization of players but thinks Wynn's gains will be short-term.

Lanni said Wynn knows how to build casinos, but MGM Mirage knows how to operate them.

"I've always thought we've had a deeper level of management," he said.