永利渡假村 (WYNN) 2007 Q1 法說會逐字稿

Good afternoon and welcome to the Wynn Resorts Limited first-quarter conference call.

Joining the call on behalf of the Company today are Steve Wynn, Ron Kramer, Marc Schorr, John Strzemp, CFO of Wynn Resorts, Andrew Pascal, President of Wynn Las Vegas, David Sisk, CFO of Wynn Las Vegas, and on the phone, Grant Bowie, President of Wynn Macau and Steve Peterson, CFO of Wynn Macau.

All lines have been placed on mute to prevent any background noise.

After the speakers' remarks, there will be a question-and-answer session.

(OPERATOR INSTRUCTIONS).

Now, I would like to turn the call over to Mr.

Kramer.

Please go ahead, sir.

Thank you.

First, I just want to correct that it's Scott Peterson, our CFO at Wynn Macau.

Thank you, Amanda.

Good afternoon, everyone.

We are broadcasting this conference call live on www.WynnResorts.com where you can also find the earnings lease which we circulated earlier today.

Before we begin, I need to remind you that today's conference call contains forward-looking statements that we're making under the Safe Harbor provision of federal Securities laws.

I would also like to caution you that the Company's actual results could differ materially from the anticipated results in these forward-looking statements.

Please see today's press release under the caption "forward-looking statements" for the discussion of risks that may affect our results.

In addition, we might discuss adjusted property EBITDA which is a non-GAAP measure.

A reconciliation of those measures to the most comparable GAAP measure is included in the press release.

With that, I'm going to turn the call over to Steve Wynn, who's going to spend a few minutes giving you an update on our company's performance, and then we will open the lines up for questions.

Steve?

Hello, everybody.

We are very happy to announce that we are, as of this moment, the largest payor of taxes per table in China, at Macau.

I say that in that particular form because we are very grateful to be in Macau and we took our experience and some humility with us there.

We're still trying very hard to learn how to be a good neighbor in that city and to make people feel that they are glad we came.

We're working very hard to understand that market and the public response to our facility has been very gratifying.

The chance to pay the most taxes per table is a privilege for us and we are glad to have that privilege.

There's been a great deal of conversation since our fellow companies have issued earnings by the investment community about the future of the industry in Las Vegas and in Macau.

I know there are a lot of people on this phone call today with very different interests, one from the other.

The most important group that's on this phone call, though, are those people who are actually investors in Wynn Resorts, and so today I'm going to speak to them.

As to the rest of the folks, you are free to sit back and enjoy it or not enjoy it, as the case may be.

But I want to talk to my shareholders who are the people that I care about and try and use the results that we see for this past quarter in the most constructive and positive way, which is as an indication of what to expect in the future.

I watch TV commercials and without getting too cute, today, there is an awful lot of commercials about male enhancement.

I think, if you want male enhancement, the best thing to do is to call the 800 number.

But if you want to make money in the gaming industry, size does not matter.

That point has been proven over and over and over again historically.

And so today for a minute or two, I'm going to talk about the history of Las Vegas and the history in Macau and I'm going to have to be specific.

I'm going to mention the names of hotels, our neighbors, people that I respect and admire.

So I'm going to go back to 1999 when Mirage opened up.

That began a period that most people call "the modern period" in Las Vegas, with big mega-resort hotels that cost hundreds and hundreds of millions of dollars.

In the early '90s, MGM opened up.

Mirage had cost 600 million to $650 million, had 3000 rooms.

MGM opened up with a theme park for 1.25 billion and 5000 rooms and never really made as much money as the Mirage.

As a matter of fact, after MGM opened, the Mirage made more money than it had the year before.

In that case, it was the total mix of the property and more importantly, the way the staff behaved in that facility that really determined the outcome.

And nothing changed.

We did an annual report I remember that said "we build houses of brick." We put the Three Little Pigs on the cover of the annual report to stress the point that it was not size but quality that determined the outcome in this highly competitive market.

It was also true in Atlantic City, where the Golden Nugget outgrossed and out-netted all of the large hotels even though it was one of the smallest.

Size has not mattered to the public.

The reason that has been true is that the public is far more discreet, far more perceptive then we sometimes give them credit for.

They come to these resorts in America seeking a special experience.

If they get it, the reward those establishments with their patronage.

They do not in any way, shape or form respond to pure size.

They don't care how many rooms in the hotel, they only care about the room they are staying in.

They don't care about how many restaurants you've got, they care about the quality of the dinner as they eat it each night.

Now, that may sound a little simplistic, but it's a profoundly important thing to keep in mind.

It isn't so much size as it is quality.

Now, if you can have size and quality, and you can staff the hotel with a wonderful staff, then of course you have an overwhelming success.

We have two hotels industry, both of them relatively new, the Venetian and MGM.

Both of them have 4000 rooms.

But one of them -- Bellagio rather, and Venetian.

One of them has bigger rooms than the other.

One of them has more conventions space than the other.

One of them has more stores than the other.

And yet one hotel makes tens of millions of dollars consistently every year than the other.

Now, we sit here with a relatively small hotel by today's standards.

The 4000-room hotels have 50% more rooms than we do.

In the last quarter, one of them grossed $20 million more than us and the other when grossed substantially less than us and made less than us.

These lessons show again and again what the history of Las Vegas has been.

I remember when Caesar's Palace was the premier establishment; they had 1300 rooms and out-earned the old MGM, which is now Bally, which had 2800 rooms.

So I mean, I don't know how many years and how many times the same story has to be repeated before we finally get the message -- that size in and of itself doesn't matter.

Now, we sit here with this hotel today with very little walk-in business, yet we have the highest win per machine and per table in town.

We are surrounded on one side by our own construction, on the other side by the new Palazzo and Barney's hotel.

We are told that these hotels, the hotel will be ready this year or very close to this year.

We're thrilled about that because it will mean tens of millions of dollars more business to us when we don't have a noisy and dirty construction site next door store but we have a wonderful new 3000-room hotel next to us.

We are told that, as you'd expect with experience, every new project is better than the previous one because the developers learn from experience.

We're hoping that is going to be the case in Las Vegas.

But there is no question that the size of the ambition of the projects in Las Vegas, meaning City Center and Echelon Place are orders of magnitude bigger than anything this city has ever seen in its history, in the last century and so far this one.

It cannot be taken lightly that the expansions that are underway at City Center and Echelon place represent an entirely new dimension for this city.

We ourselves are in construction.

We're on the 24th or 25th floor of Encore, and there was only one place for us to go -- up, up in terms of quality, up in terms of size, up in terms of all of the other things.

That's why Encore's expensive.

We are up to now where we say a new hotel in Las Vegas is about 1 million a room -- a nice, round number.

I remember the good old days when 600,000 was considered expensive.

In China, the same exact thing -- forgetting Encore and Palazzo and Echelon Place, and City Center -- the size of the ambition of the Cotai expansion is mind-boggling.

It is fantastic in every way, just as the market itself is fantastic in every way.

I agree with all of the points that the people at the Venetian have made in their conversations with the investment community about size.

But what we in this company stress to our shareholders is that we must not take tomorrow for granted.

I do not think that we should be anything but very conservative with this unprecedented expansion of demand in Macau.

Because in Macau, we saw the same lesson of Las Vegas repeated as quickly as you could possibly see.

Hundreds of tables were added in our neighboring casino and they did less money than they did before, and in some cases less money than us in some cases, certainly per table and I think in February, less than absolute dollars.

That of course, changes depending on luck, but we cannot blindly trust size.

We cannot blindly go for any kind of bloated rhetoric about size itself, because it has not held true historically in our market and in our industry.

What we can expect is that wonderful new hotels will be built, hopefully like the Venetian when it's all finished and they get all of its parts open.

It's our practice to open everything all at once if we possibly can.

So we all need the Cotai to be everything we expect it to be, but at the present time, we are engaged in our own expansion in Macau, on the Peninsula, with the Diamond Suites.

On our anniversary, September 6, we will have a huge blowout event in which we unveil the next set of offerings that we've prepared for the Chinese public, including entertainment, special features, new food offerings, and of course more opportunity.

We are capacity-constrained at the moment in our casinos; we haven't seen any kind of drop in our general casino.

Adjusted for the amount of days we were ahead in the first quarter from what we did in the fourth, and our VIP business has grown dramatically.

That's continued during April and the first golden week of May.

So that pretty much brings everybody up-to-date.

And this note of caution that I would like to inject into future expectation about China -- if we do a very good job, if we take very good care of our employees, I think we're going to be fine.

But if we underestimate the public in China, which has been the case sometimes in the past in that city, there will be disappointments ahead.

I will take questions.

Who is first in the questions today?

(OPERATOR INSTRUCTIONS).

Celeste Brown, Morgan Stanley.

Good afternoon.

Can you comment on I guess one of your neighbor's comments on Macau helping or not helping competitiveness in Vegas?

Well, that's an interesting thing.

I think it was MGM that said that they were probably disadvantaged by not having a casino open in Macau.

I think that the management of MGM is absolutely terrific.

It's a little bit of a selfish remark.

Most of those guys used to work for me and I know them and I like and respect (inaudible).

However, I disagree with that statement.

And again, history -- history, everybody; pay attention to it.

For the past three years, prior to the -- for the past year, prior to the opening of Wynn Macau, The Sands had a two-year advantage on everybody with business in Macau.

Did The Sands have the best Baccarat game in Las Vegas?

The answer is, no, it did not.

It did not stop The Sands from being in third position, in many cases, behind Wynn Resorts and MGM.

What we have learned -- I hate to sound like a broken record, but those Chinese people are discriminating, sophisticated people.

It's not just that you get to meet them in China; it's what kind of experience they have in China.

So, if everything is perfect in China, then they give you the benefit of doubt in Las Vegas.

But, having a casino in China did not make a casino -- the same company in Las Vegas have the number one Chinese Baccarat game.

Now, that's not my opinion; I'm not trying to be pejorative about our neighbor.

But it's a straightforward question.

It was a remark made by the MGM and it patently is not true.

If you have a wonderful hotel in China, then you get the benefit of the doubt by those people who come to visit you, and they naturally would like to test you out in another location.

It's like the Four Seasons; you trust them, you stay at a Four Seasons.

So, having a casino in Macau did not in any way guarantee an advantage to The Sands for at least the two years they were open when.

We opened up our Baccarat game, not having a casino in Macau didn't make any difference whatsoever.

So again, Celeste, and I'm never, ever going to call you "ma'am" again.

I'm sorry about that, Celeste.

You know what happened?

It's because I went to military school and we used to call our girlfriends ma'am, you know, anybody who was the same age.

I've certainly learned the difference now.

So Celeste, that's what I'm thinking about that.

Again, all you've really got to do is look at the Las Vegas history.

It's the clearest indication of how customers behave and what really matters to us.

I guess, thinking about properties, can you share with us your thoughts on Cotai in terms of when you might announce something?

Do you want to wait and see how the market progresses once Cotai opens, or will you move forward before we have visibility on Cotai?

Well, we spent quite a good of time putting together a Cotai plan which we gave to the government, and that's moving along very nicely.

So, we've taken a Wynn Resorts kind of stab at what we want to build in Cotai, and as you can imagine, we are consistent; we go for quality.

If we can figure out how to maintain that image and still have capacity on a larger scale, we do.

For example, in Macau, on our anniversary, we will go to 480 games and when we finish there, we will be at 510 or 515 Mark?

-- and 1000 slot machines this September -- we've got 470 or 80 now and we're going to go to 1000.

We end up at 1300 on a Peninsula.

We have more room and a wonderful opportunity to build really stunning facilities in China, in Macau, on the Cotai Strip.

We are right next to the ferry terminal.

We are the first hotel that you come to from the ferry terminal from the airport.

I'm hoping that will be an advantage someday, and we've taken that into account in the way we presented our property.

We haven't shown and discussed the nuances of that facility quite yet for two reasons.

First of all, we think it's appropriate that the government give its final blessing to what we do before we begin to beat our chest about it.

Secondly, we'd sort of like to keep our cards close to our vest until after the other fellows have committed themselves and can't double back and copy us.

Okay, thank you very much.

Joseph Greff, Bear Stearns.

Steve, it's certainly wasn't reflected in the first-quarter results in Macau but are you finding yourselves now looking or having to pay your employees more, or have any kind of increased retention costs to (inaudible) operators, similar to (inaudible) Las Vegas Sands talked about in the 1Q?

Real interesting question.

I heard that one of the companies, I think it was the Venetian, said that one of the things that has interfered with their margin is that they are carrying all of these employees.

Well, that means they won't need any of ours, presumably, if that's true.

The fact of the matter is that we are spending 3 or 4 million.

Samanta, how much a quarter are we spending on the people we are carrying for?

3 to 4.

3 to 4 million a quarter, we've got all of our people for the Wynn Diamond Casino that opens on our anniversary.

We won't be looking for anybody -- from anybody else.

We are very happy that we are in that spot, and it gives us a chance for extended training.

But our margins include like, you know, 1 million, 1.25 million a month that we are spending on carrying other people so that we are prepared, in-house, for our folks.

We've also learned in the past -- again, history tells the story.

In the '90s, Mirage Resorts received every single award in America in human resources, a couple of them twice.

We were HR Magazine's Company of the Year; we were the Human Resource Institute Company.

It's the reason we got to be the second most admired company in America.

It's because of HR.

We've learned, over a period of time, that the opportunity to make people feel good about themselves and to feel good about the enterprise causes them to be happy and to stay at work.

It's always a challenge to do that in the face of growth, in the face of learning new things.

I mean, things never stay the same in the world today and they certainly don't stay the same in business.

But our priority is to be the employer of choice.

During the '90s, the average turnover in the gaming industry was in the high 30s and low 40s.

Our company was less than 12.

I'm suggesting that companies are like horses.

They run true to form.

Companies that open hotels, that are complete and that are well-staffed tend to open up hotels that our complete and well-staffed again.

Those that don't, don't.

People behave in a consistent way.

Now, we won't know how this works out until it works out.

But if you are asking me, Mr.

Greff, I believe that we will keep our staff and that we will be the top hotel in Macau no matter how many people build hotels there and no matter what they say, just as we are in Las Vegas.

With respect to commission for junket operators?

Well, that's another interesting question.

We hear rumors.

We heard that one of our competitors was going to go to 1.45, which would be, in my view, an act of desperation that won't work, but maybe it's not true.

We average way less.

You see, we operate our own junket program, and along with other junket programs.

Our average is less than that, way less than that.

So if someone goes to 1.45 or -- you know what happens?

In the past -- again, history.

In Las Vegas, all the years that Mirage and Bellagio dominated, the Asian high roller business -- and dominate is the only word that you could, use.

Every single hotel that we competed with had bigger suites and offered deeper discounts.

You think this is not new!

This technique to try and buy the business is as old as Methuselah.

But I will tell you the way it works.

You are either the grantor of favors or you are the beggar of favors.

The minute you get on your knees with a customer that's got money, you are a dead duck.

The worst thing you could do is be the club that's begging for members.

Everybody wants to belong to the club they can't get into.

And you start jacking up commissions and you are on your knees.

With a status-conscious, highly mobile population like the top-end Chinese business, that's probably the Kiss of Death.

It shows that you're needy, and no one wants to play in a place that's needy.

You start begging, and that's like the perfect formula to drive away a top-end customer.

So we will not be the leader of that parade, ever.

Great, thank you.

I don't care what the other guys do.

As a matter of fact, I sort of like it when they do; it's just a sign of weakness.

It works for us.

Excellent.

Thanks, Steve.

Lawrence Klatzkin, Jeffries.

A couple of quick questions.

One, Ron, do we have the budget for the Diamond Suites?

Is it still $400 million?

We are still working on it and when we finalize it, we will put it out later this quarter.

It's going to come in two parts.

It will be everything that opens up on our anniversary; that is a firm date now, and that's principally all of the gaming except for, if you can imagine --

That's already included, Steve (inaudible) budget (multiple speakers) Diamond Tower (multiple speakers).

And then there's the Tower and the stuff that's under it, that's under construction now, which includes some new retail, two restaurants and, two, VIP casinos with 14 or 15 tables each.

They are quite stunning.

They're right next to the back door or the side door entrance of MGM.

We want to cuddle up to our neighbors that we love and respect, so we're putting the VIP casinos right there.

That side entrance, that side -- that side of our hotel, which is the south side, is the scene now of the new MGM hotel which we are hoping is going to be a standout.

Also, [Pan Zi Ho] is building a Mandarin Oriental that doesn't have gaming, that opens onto the same plaza and Angela Ho and her group are doing a new building and all of us are going to have this -- you can walk out one door and into the other; it's going to be quite something, high-end places on the south side of our Peninsula property.

These things all come into season in the next 24 months.

It's part of the unprecedented expansion that is occurring in Macau, not just on Cotai -- hardly just on Cotai.

It's quite everywhere.

Not to mention this week we're going to see our friends at PBL and Melco open up their new place.

Is it true there's going to be a subway stop between the -- you and MGM?

Would you repeat that question?

Is it true that there's going to be a light rail stop planned right between (multiple speakers) your property?

Oh, they talk about the using monorails or other types of public transportation as time goes by.

I don't believe the government has made a final decision on that quite yet.

Scott or Grant, has there been an informal decision made by the Macau government?

No, they are due to issue their final recommendations within the next month, but no final decision.

So first there will be a final recommendation, and then the government will or won't take action on it.

Is that right, Grant?

That's correct.

They will go out for another round of public consultation and then they will finalize the arrangement.

(multiple speakers)

So the answer is it's a little early?

Correct.

Okay.

Then the last question is just I noticed you guys had a little bit of luck in Vegas.

Could you guys give us what you calculate it to be, how much you gain from that?

Approximately 15 million to 17 million.

I asked Bob Baldwin once, I said "The Bellagio must gross -- if we gross 1.3 billion or 1.4 billion in order to make our money before we get off, take off comps and promotional allowances -- Bellagio with 4000 rooms must be doing 1.5 billion, 1.6 billion." I said "Of the money that you make, Bobby, how much goes -- comes from walk-in business?" You know, we never actually tried to really nail that number down, but I was interested how much money Bellagio for example -- they call that a hotel with a perfect location geographically.

How much business does it get?

I said, would it be 10% of your volume?

15%?

Would it be 150 million, 200 million?

He said "Maybe more." Well, let's say that it's 150 million to 200 million, and on that business you are making a 40% margin.

My goodness!

Aren't we happy to look forward to that?!

The numbers we are generating are in spite of that.

We are across the street from the Frontier; it might as well be closed half the time.

The shopping center closes at ten o'clock at night.

The Stardust has disappeared.

(LAUGHTER) We're building Encore on one side and Sheldon Adelson and Bill Weidner and Rob Goldstein are Palazzo on the other side.

Right now, that's the scene of flying debris and incessant banging on a steel structure.

It keeps my guests up at night and I am amazed that anybody stays in this hotel at all!

I'm totally stunned that they pay the highest room rate here.

I mean, I think maybe we will be able to raise our prices when they get through banging at the Palazzo!

We don't have much walk-in -- but people come in.

What we do have is stay-in.

-- stay and play in.

That's the name of the game here.

Thank you, Steve.

Is there any timing on lightening up on what you do with the golf course after you finish the Encore?

Well, one of the wonderful things we get to watch, the City Center -- the City Center (inaudible) is such a fascinating, unbelievable thing.

We have a master plan of our golf course that takes a different approach than City Center.

It creates Central Park and puts a bunch of hotels around Central Park, that sit on Central Park, much the way the Metropolitan Museum sits on Central Park.

You walk across the street or over a bridge into the convention center at the Sands or at the Convention Center, the Las Vegas Convention Bureau, but the back of these hotels and the suites in these hotels, and the meeting rooms in these hotels open onto a park where there are no cars, just a wonderful pedestrian place.

So our approach is altogether different than our friends at MGM.

But on the other hand, you know, we didn't pay all of that money for land, we just paid 1.6 million an acre for all 240 acres and we don't have anything to rip down like our friends at Harrah's.

All we've got to do is move a tree.

So we are in a very nice position but we are fascinated to see how our neighbors show us the way.

And then we get to go last.

All right.

Well, thank you, Steve.

Jay Cogan, Banc of America Securities.

I'm actually trying to help raise your room rates here in Macau right now as we speak.

(multiple speakers) quarter.

I've got a few questions for you about Macau.

As it relates to just first on the whole (inaudible) touched on I guess just Vegas.

Ron, is it fair to think 4 million or 5 million related to the relative full percentage for Macau as well.

I'm sorry, would you -- (multiple speakers) --.

In terms of the impact on cash flow at the property, the 3.3% hold, if I'm understanding the press release correctly (multiple speakers).

You know, one of the side effects of hotels like we've built -- I made this point in the last quarter and I am making it again -- is that people play longer, they stay longer, they don't drop into sniff it out; they hang out.

That's why size doesn't matter.

It's another thing that matters.

Whether it's at the low end or the high end, people play longer in our places.

We had a comparative number.

We only get to see certain things, so we get to see -- I don't have a sheet in front of me.

Maybe (inaudible) will do it.

What is the drop in this casino versus the one next door in Las Vegas?

The table?

(multiple speakers) go ahead, Sam.

(multiple speakers) going to give you Macau (multiple speakers).

The same size casino, one's got 4000 rooms (multiple speakers) one is 550 in handle, one is 350 in handle.

Now, why would that be true?

Why would a hotel with the better walk-in position and more rooms get a result radically different from one than the other?

I look at such things and I always have; I've always been a student of this.

I've looked at these things and I've said to myself, why did Caesar's Palace make so much money than MGM in the old days, when they only had 1300 rooms?

I kept that in mind.

I had Caesar's Palace in mind and MGM, the old MGM, in mind, when we built the Mirage.

I wanted to get that kind of customer loyalty.

We're still trying to learn how to do that better.

I think that the people next door are learning how to do it better too; we will see what happens when Palazzo opens.

We're hoping for the best.

We want to have strong neighbors.

We want to have smart neighbors.

We want people that do care about quality and don't have a blind reliance on size and you know, what I would call inflated rhetoric.

It's about these numbers.

It's about the damned numbers.

You can't keep ignoring them!

They are what they are.

There comes a moment when all of us have to sort of deal with the truth of it.

And you know I think we tend -- casinos that have people that sit around longer and have better customers tend to have a higher hold percentage.

(multiple speakers) go the other way; people win, too, so --.

But you know, you look at the long-range thing; we finished the year with a 22% hold percentage (multiple speakers) higher than our neighbors at Bellagio.

Right.

I think I was talking about Macau but I understand the idea (multiple speakers) have larger volume (multiple speakers).

(multiple speakers) the Chinese guy behave any differently in Las Vegas than he does in Macau?

Of course not!

Nobody is behaving any differently in China than they are in Las Vegas!

That's my point.

The notion that somehow, on the other side of the world, reality has inverted itself is a naive and foolish thing.

I'm sitting in this conference call and sitting across the table from me is [Alan Zeeman].

Alan is the Chairman of the Park -- Ocean Park in Hong Kong that has more people in it than Disney at the moment.

Alan has been there all of his life and ever since I started in China, Alan, who has been with me every minute since 2002 has said "now, look, I'm not going to let you make a mistake.

You are not going to underestimate these people in Macau and in China.

Steve, if there's anything I'm going to do as a member of this board, I'm not going to let you underestimate these people.

You just can't throw Baccarat tables at them!

They will throw them right back at you sooner or later, especially if they get the choice."

Right, and hope you weren't -- I hope it wasn't being read that I was actually implying that the opposite.

I guess what I was curious is if (multiple speakers) or so, if (inaudible) this kind of level of volume on the VIP side, should we expect to see these kind of (inaudible) on a go-forward basis (multiple speakers)?

I'm thinking that, if we get better customers who have a personal persons to gain, the whole percentage in a gambling hall is determined by the average debt and the length of play, LOP.

Everybody that's been in this business more than 20 minutes knows it.

I will say it again real slowly "length of play determines hold percentage.

Length of play determines hold percentage." You get length of play by the kind of product you provide and the service that you provide to the people.

You don't get it by speeching or yapping on the telephone; you get it by those gritty, tough things.

Then, in that regard, I guess I was wondering.

Can you talk a little bit, Steve, some of your competitors who talk a little bit about how they see the Crown opening potentially or not potentially impacting (multiple speakers)?

I don't know how they do it, but I was just recently down and I was in Sydney with Jamie Packer and Jamie was up here last week, and of course we are all excited about his opening.

Unfortunately, I can't be there, but I am clapping and cheering for Jamie just as I am for Palazzo and the Venetian.

We need successful neighbors.

The stronger that market is in Macau, the better it is for Wynn Resorts.

A bad hotel is not good for Wynn Resorts.

We did not get helped at the Mirage by the Aladdin when it first opened, but we were helped by Paris.

Would Mirage have done better if it was against an empty lot, or did it do better because it was against Caesar's?

Of course that's a rhetorical question.

We need strong neighbors.

Someday, I'm hoping that Stanley will build a new Lisboa across the street from us.

That would be wonderful.

We don't want any weak neighbors.

We want to help our neighbors do a better job.

We want to goad them, we want to provoke them into it.

It's not easy sometimes.

Some of our neighbors are hard to goad and provoke.

But I'm hoping that the performance of our hotel will irritate them enough that they will.

Just as a final question, just on mass market, your numbers were pretty consistent first quarter versus fourth quarter.

Where are you in the process of additional marketing or efforts to ramp the mass business?

How do you see that playing out over the next several quarters?

(inaudible) including your expansion, which now sounds like it's coming in September.

Well, first of all, we do need some more tables and we needs more seats.

That's a nice problem to have.

But I think that we have to watch ourselves.

We are a particular kind of Company, and we don't get down on our knees.

We say, "if you like to gamble, if you're going to Macau, and you are a person of discretion and good taste and you demand good service and first-class facilities, we are your place of choice." Like a British butler, we are quiet, and we are very attentive to the responsibility that it imposes upon us.

That's why we were thrilled when Ian [Cullen] left the Peninsula hotel in Hong Kong and agreed to become the head of Hospitality in our company and at the present time is focusing his rather unusual gifts along with Grant Bowie on our hotel in China and our expansions in China.

That's why Ian and Grant attract the kind of people they do.

It's why Wendy [Ewen] does what she does in order to get the right kind of people to work for us.

Our marketing is basically what we say to each other.

And so, that's pretty much the answer.

Jay, it's Ron.

I just want to make sure I gave you the specific answer to your question.

So, it's at the midpoint of our expected range on the VIP.

At 2.85, we benefited by about $7 million in the quarter.

Great, thanks a lot.

I really appreciate it.

Jay, you also should bear in mind that we have two less days this quarter than the previous quarter, when you are comparing mass market (inaudible) as well.

And I don't know -- Ron used the word "we benefit".

By the math, the gain would hold 2.6 (inaudible) Ron?

I think 2.85.

That's the midpoint (multiple speakers).

(multiple speakers) That's with the bets on the ties and everything else?

So that's not actually what happens.

Again, I want to stress that if you're trying to understand what's going to happen in terms of hold percentage, focus on the length of play.

It's not exactly a distortion, but it's a bias that you'll notice in places like ours.

You'll see it year-in and you-out, quarter-in and quarter-out.

The translation to that, the expected range, will move as we have the chance to add a longer history with our player than with our operations.

When The Sands was alone, they were the best place in town I guess for a moment or two, and they had the benefit of that.

I mean, they were always up around 3; they were up 3-plus.

See?

That's what happens.

That's another demonstration of the bias that we're trying to convey to you, which again we're trying to use our numbers and the numbers of our neighbors to try and get at the truth, the truth without fanfare, exaggeration or spin, the truth.

Thanks a lot.

Robin Farley, UBS.

Yes, Two questions.

First, just to clarify one last time on your comments on hold percentage, and we hear you loud and clear about length of play determining hold, but you're not changing at this point the range that you consider normal hold in either Las Vegas or Macau.

Is that there to say?

We raised the normal hold in Las Vegas range recently.

But in terms of this quarter, it's 20 million to 25 million in EBITDA from extraordinary hold, above your recently-raised range of normal.

Is that fair to say?

On revenue.

On revenue.

So the 7 million benefit in Macau was a revenue benefit, not EBITDA?

(multiple speakers)

7 million in Macau and then you said 15 million to 17 million in Las Vegas?

In EBITDA.

Right.

So a total of over 20 million on the EBITDA line, okay.

Then, the second question was to clarify.

Originally you had Macau expansion opening in July and the Diamond Suites with not an announced opening.

Is the September anniversary opening -- that's now the July opening; that's part one of Diamond Suites is now moved to September and then the rest of Diamond Suites will open here later?

Robin, the casino part that we had built already is going to be ready at the end of June.

The special attraction in our new lobby is going to be ready in June.

We determined earlier this year, before the Chinese New Year, that we wanted a more powerful, more complete, wider connection between the Wynn Casino and the Diamond Casino than we had on the original plan.

That involved making a substantial change in the back of the house on the east side of the casino in order to join the two.

We felt that, if we did that, then the Diamond Casino and the Wynn Casino would perfectly joined or as perfectly as we could possibly do it around the pool.

And we thought that it would be a mistake to open the place while that construction was in progress.

So we postponed the opening of the new part, although it was ready, from Chinese New Year until July.

Then when we finally finished designing the new connection and everything else, we realized that it would be totally complete by our anniversary.

So then we moved the date, even though it meant holding tables in reserve that were ready to go -- we moved the date until September 6.

That's consistent with our role of not wanting to limp into the market but make the strongest possible statement when we do open something new.

Okay, great.

Then the second part, though, not an opening date yet on the (multiple speakers)?

Now, the rooms -- are you talking about the rooms, Robin?

But what you are calling I guess now part two of the Diamond (multiple speakers)?

Well, yes it's the rooms.

It's the 40 floors, 10 suites a floor, 400 suites, the smallest one being 1000 square feet.

There's 400 of them.

There's ten on a floor and they go all the way up to -- you know, each floor is the same.

We've also quietly -- we were doing it secretly.

I might as well let it out during this meeting, that way it will be some fun.

We had a good deal of luck years and years ago by having the world's biggest golden nugget at the Golden Nugget.

I dragged it around and got it on television and used it as a great promotional tool, and then we put it in a beautiful case and we had on display at the Golden Nugget.

I think it's still down there; it was found in Australia.

The Hand of Faith Golden Nugget.

And it was a good thing for us.

And those were the good old days for me, so I secretly started looking, through a friend that's a diamond dealer, for the biggest diamond in the world six months ago.

We found it finally in Russia.

According to the GIA, the Gemological Institute of America, the largest diamond in the world, pear-shaped -- it's a 231 karat gem and we bought the Wynn Diamond.

It's currently unmounted, and there's a mounting being designed by someone who I will keep secret for a moment.

Then it's going to be available in China and we will tour it around with guards and all the rest.

The Wynn Diamond will be on display at the Wynn Diamond Suites.

And it is a spectacular-looking thing.

So those are the kind of things we're going to do later on.

Interesting.

Lots of fun.

Great, thank you.

Bill Lerner, Deutsche Bank.

Steve, can you talk about a few things?

One, how are you thinking about new markets?

You have -- is your preference domestic or international at this point?

And then the second question is, your thoughts on Spamalot at this point.

New markets -- you know, I remember the days when, if you were doing $3 billion worth of construction, it was worth talking about.

No now, it's almost a rounding error around here.

We are currently in $3 billion worth of expansion between Macau and Las Vegas.

Compared to some of our neighbors, that's small potatoes.

But we're very focused on that.

You know, we've got two hotels.

It's a real simple story with us.

We've got two hotels that make a little over 1 million a day between the two of them, separately.

That's about it.

We have no debt in the parent company and a lot of cash.

All of the financing -- and then both hotels that make over 1 million a day -- both hotels are planned for expansions, quite simply, that are very close to near or close to near doubling them.

So it takes our EBITDA hopefully to another level in the next 18 or 24 months; it's in that range.

Some that comes on earlier, some towards the end of that period.

So when we think of other things, it's not like our dance card isn't filled.

Now, we are naturally very interested in certain places where we have the capacity to take our brand under control.

"Under control" means that those of us who work on design and human resources have the capacity to keep the promise.

There's a promise in the Wynn brand; it's the reason why we are the only casino resort in the world to hold a five-star and the five diamond rating simultaneously.

We want to keep that promise.

We are a niche operator, so to speak, in that respect.

We are sort of the Four Seasons of gaming I guess would be the way of putting it, although -- and I have great respect for Izzy Sharpe and his organization at Four Seasons.

We can't be everything to everybody.

If the right opportunity presented itself, we were confident of success and that our brand would have real resonance with the public, then we would try very hard to compete to be in such a market.

At the present moment, there's nowhere that presses us as a necessity for that.

The closest thing to it would have been Singapore where we loved it.

But at the time, we were six or eight months away from opening Macau; we had just opened Las Vegas and we were planning Encore and Diamond Suites.

We did not have the capacity inside this company to bite into that apple.

Our eyes would have been bigger than our stomach.

I know that some of our competitors have an unlimited capacity for expansions, at least they do in their own mind.

Whether they do in reality remains to be seen, but I know that, in our shop over here, we are probably a little bit more humble about our capacity to execute.

That's based upon the fact that, in the past, we've not always been as good as we hoped and we're trying to do better.

That's helpful.

Okay, and then just the follow-up just on Spamalot -- how you're thinking about that now?

Ah, Spamalot!

A lot of fun.

Everybody that comes to see it, loves it.

We are getting 1000 people or so a show to see it, which is okay with us.

And Le Reve is doing great at around 13,000, 14,000 people a week.

So I think our entertainment is satisfactory.

I would love to be able to push the limit up against total capacity in our theatres, which would give us probably another 7000 or 8000 people a week, but we are operating pretty high now, certainly as high or higher than ever were in the past with our other hotels.

When you look at the results of the first quarter, especially if you compare us to Bellagio, where we were behind by 20 million, the differential in our rooms at least is 30 million, but we made up 10 million of it.

But we had Le Reve down during January and February.

We had our showroom closed as we were doing some work during February.

We had closed Le Reve during March (multiple speakers) March, yes.

So we were down for part of the quarter in Le Reve.

We were back up in April.

So in April, we got both shows operating.

Thanks.

Edmund Blake, Pinnacle Associates.

A question for you, Mr.

Wynn, as to your competitor.

LDS indicated that there was some softening in the first quarter in Macau, I believe attendance.

Is that a company-specific or is the total attendance in all casinos in Macau a bit softer in the first quarter?

Sir, we don't have data available except from the companies themselves about their own, historical comparisons.

It is not true of us when we compare prior -- we were only open in the fourth quarter of last year and a few weeks in the third quarter.

So, when we look our first quarter, we compare it only to the quarter before.

We show no weakening, and in the VIP and slots, a strengthening, a substantial strengthening.

That trend has continued during April and certainly during the first part of May, which is golden week.

So we don't see that in the limited experiences that we've had with our own hotel.

We have no way of knowing about SJM, which is Stanley Ho's company, or Galaxy or any of the other related parties that tag along with them.

Thank you.

There are no further questions at this time.

Thank you, everybody, for bearing with us.

I hope we've been helpful.

I look forward to talk with you next time.

Bye-bye.

This concludes today's Wynn Resorts Limited first-quarter conference call.

You may now disconnect.