Wynn cuts and runs

Wynn Resorts might be willing to pay $20 million to remain licensed in Nevada but $35 million in Massachusetts was Just Too Much evidently to hang onto $2.6 billion Encore Boston Harbor. In one of the most precipitate decisions in memory, Wynn has entered talks with MGM Resorts International to unload its new trophy property to the lion’s den. This also means that MGM could be jilting Springfield, where its newest casino has underperformed. Admittedly, Encore might be sold to MGM’s REIT, MGM Growth Properties and the company could try to hang onto both but that runs a cart and horses through the intent of the Bay State’s one-casino/one-company law.

All Springfield Mayor Domenic J. Sarno had to go by was vague assurances. As he stated to the media, MGM President Bill Hornbuckle “reached out to me late [Thursday] evening to indicate that Wynn Encore had reached out to MGM wanting to speak with them and again, this is all speculative. Bill reassured me of MGM’s commitment to Springfield and that if anything was to be entertained, and/or occurred, that myself and the [Massachusetts] Gaming Commission would have a big and ultimate say in what might or might not happen. The biggest take here is that Bill reassured me of their commitment to the City of Springfield and I will always continue to stand and fight for what is best for our [city]. This is preliminary and conjecture at this time. We had a very good and mutually respectful conversation.” How MGM would remain committed to Springfield while apparently defecting to Everett was not explained, unless MGM has come clever plan to have its cake and eat it simultaneously.

Any deal would have to be approved by the Massachusetts Gaming Commission, which is adamant that Wynn pay its fine (plus a $500,000 penalty on CEO Matt Maddox for incompetence) by May 31. When reporters came calling, Gov. Charlie Baker (R) dove under the table, putting everything in the MGC’s lap. Despite the timing, Wynn says this is nothing new: “Over the past several weeks, we have engaged in conversations around the potential sale of Encore Boston Harbor. They are very preliminary and of the nature that publicly traded corporations like ours often engage in, and in fact when opportunities such as this are presented, we are required to explore … Our conversations will not impact the jobs at our facilities and will not impact the opening of Encore Boston Harbor.” So it’s just a matter of maximizing shareholder value? Yeah, that’s the ticket.

We will follow this story as it unfolds.