Wynn sitting pretty; Trump Plaza damned, doomed

Wynn Resorts can sit out a Coronavirus crisis lasting 1.4 years. That’s how much cash ($3 billion) it’s sitting upon. First-quarter revenues took a 43% hit and are expected to come in somewhere in the $912 million-$969 million range. The company is spending between $70 million and $80 million (God bless it) to keep employees paid from April 1 to May 15. Most of the cash is in Macao but JP Morgan analyst Joseph Greff heavily implies it can be tapped to cover domestic costs. Counting interest ($500K/day), it cost Wynn $3 million per day to keep its casinos shuttered during the 15-day lockdown in Macao. “While properties are opened, they continue to operate under extremely challenging conditions, and until such measures are lifted, WYNN expects to ‘continue incurring such cash costs in excess of the amounts they are earning at their properties,'” Greff quoted management.

Stateside, Wynn’s daily operating outlay is $3.5 million plus $800K cost of capital. Encore Boston Harbor is tentatively set to reopen May 4 but Massachusetts citizens are dropping like flies, so we set no stock by that date. The company is hoping for a May 1 reopening in Las Vegas but planning for a May 16 contingency. If you’re not so fortunate as to be a Wynn employee, your prospects are more uncertain. As the New York Times‘ Brittany Bronson writes, “here in Vegas, the majority of our economy is nonessential. Our economic well-being lives and dies by the booming and busting of a single, extremely fragile industry.”

The Economic Policy Institute predicts an almost 20% unemployment rate by summer, which is only good news when you consider that it was earlier projected at 30%. Bronson is skeptical of the CARES Act: “For most workers, a one-time check will not cover the cost of a single rent payment. And the reality is, when nonessential businesses are allowed to reopen, many of those former employees will not be immediately invited back to work.” She concludes by saying that “economic security should not be left up to chance, or to the generosity of casino owners.” Maybe not, but no solution is proposed.

* Want a drive-through Coronavirus test? Head on over to Twin River Casino, one of the sites designated by Rhode Island Gov. Gina Raimondo (D). “The average person will get their results in about 15 minutes after they’ve had their test,” said Dr. Troyen Brennan, chief medical officer of CVS Health. According to Raimondo, Twin River will be able to host 1,000 tests a day, doubling the state’s capacity.

* We’re already tearing down Trump Plaza. We promise! That, in essence, is what Carl Icahn‘s attorney’s are contending as he tries to have a suit by Atlantic City dismissed. The avalanche of debris from the crumbling tower has gone viral on the Internet, evidently spurring Uncle Carl into action. Queried attorney Michael Sklar, “Defendant is at a complete loss as to why the City is wasting the Court’s and parties’ time and effort on this matter. There is no imminent safety threat. IEP has taken, and continues to take, substantial measures to secure the Plaza Tower and to protect the public.” Even if Mayor Marty Small loses the motion it’s a win because Icahn has dropped his financial conditions for demolishing the carcass and decided to exploit the underlying real estate instead. Icahn says he’s taking bids and the work could be done by mid-2021. The Plaza Tower is first up for demolition, followed by the parking garage and East Tower. For more of Trump Plaza’s colorful history, read on.

* Despite proactive measures by the city-state, Coronavirus has made a comeback in Singapore. As a result, both Marina Bay Sands and Resorts World Sentosa will be closed for a month. Everyone was shooed out of the buildings by 8 a.m. Monday and reopening won’t happen until May 5.
Both resorts promised refunds to inconvenienced hotel guests. Resorts World wasn’t fully compliant, vowing that “Only selected restaurants and food and beverage outlets, which can support necessary daily living needs of residents, will remain open for takeaway and deliveries.” It did, however, impose pay cuts on upper and middle management. It’s unclear whether the two megaresorts will benefit from economic-stimulus payments being formulated by the Singaporean government. The latter is also coping with 1,309 cases of Covid-19.

* Lofting a Hail Mary legal pass, the Mashpee Wampanoag are seeking a temporary restraining order on the disestablishment of their Taunton reservation. Joe Biden is the latest politician to pile onto the Trump
administration for the timing of its decision. So too did Taunton Mayor Shaunna O’Connell, who wrote, “There is widespread frustration that the progress of the casino has been delayed for so long. This area is missing out on the creation of jobs and economic activity. The Tribe has a right and an obligation to question whether the Secretary’s decision was appropriate.” They’re also desperately in hock to Genting Group, to whom they owe $300 million plus $100 million in interest (yes, 33%). Plaintiff’s attorney David Tennant has not failed to notice the tribe’s penury, pointing to $41 million in federal loans and asking, “Why isn’t that money around today?”

* Covid-19 has a silver lining for James Packer. The gaming billionaire has seen a suitability inquiry into his Crown Resorts postponed indefinitely due to viral concerns. His Melbourne casino even got a brief break from local authorities, who exempted it from closure orders, only to have to backtrack after a public outcry. Now all of Packer’s gambling houses are closed, although his hotels remain open.