永利渡假村 (WYNN) 2013 Q3 法說會逐字稿

Good afternoon and welcome to the Wynn Resorts third-quarter 2013 earnings call.

Joining the call on behalf of the Company today are Steve Wynn, John [Shrimp], Matt Maddox, Kim Sinatra, Gamal Aziz, Maurice Wooden, Scott Peterson, Ian Coughlan, President of Wynn Macau, and Robert Gansmo, CFO of Wynn Macau.

Now I would look to turn the call over to Dr. Maddox.

Please go ahead, Sir.

A promotion to Dr. Maddox (laughter).

Thank you very much.

Good afternoon, everybody.

Before we get started I just need to remind everyone on the phone that we will be making forward-looking statements on this call under the Safe Harbor of Federal Securities law.

And those statements may or may not come true.

So with that I am going to go ahead and turn it over to Steve for some opening remarks.

Okay, Dr. Maddox.

And it's nice to know that John Shrimp is (laughter) John Strzemp is on the phone.

I have a sense of humor about all of this.

Business is fine at our Company and the numbers are out, so all of you know that.

We are on our way to having our best year.

We are $117 million ahead for this many days.

In China we are $53 million ahead for this, almost $54 million in Las Vegas for a total of $171 million or 13.4% ahead for the year.

And that includes up until today, so it was 15.9% and 12.4% in the other two -- each hotel separately, 13.4% overall.

So we are very happy with our cash flows.

And especially in Macau being up 12.5% or so, being when $117 million, or $20 million ahead, when we have had new competition, well designed and well conceived competition by our colleagues on Cotai, Cotai continues to be a remarkable achievement.

The whole Macau is a remarkable story when you think of the fact that in the space of eight or nine years they have gone from $2 billion to $45 billion to $50 billion in income.

And Casino Wynn is such a dazzling and unprecedented piece of information that takes a bit of thinking to get your arms around it.

Really it takes a bit of thinking.

I don't think we have had an economic expansion of that nature in modern civilization, modern history, maybe ever, and it is quite remarkable.

And it is very exciting to be part of it of course.

And I was there on Monday.

I flew over; I spent some time in Macau, just got home yesterday, and stood on our site.

They are pouring concrete, finishing the foundations and pouring slabs and getting ready to go up in the air and we are on schedule and excited to be looking forward to a Chinese New Year in 2016.

That is our anticipated opening date, Chinese New Year in 2016.

And we are now planning Phase 2 for Cotai in which case we intend to introduce yet another product that no one has ever seen before.

And there will be more about that coming later.

And we are altogether very excited watching Japan and the other jurisdictions in Asia and closely following the amazing developments in places like Massachusetts and Philadelphia.

So we will take questions now if anybody would like to ask them.

Are we going to have questions?

Is it possible that no one cares?

Victoria, we are ready for questions.

The operator is asleep I think.

Joe Greff,

Hello, everybody.

I have a question for Dr. Maddox on the balance sheet.

Matt, you finished the quarter with -- you had $2.7 billion of cash and other liquid investments; you just raised another $600 million, so there is $3.3 billion there.

How much of that resides in Macau versus the US?

And if I am looking at this correctly, you are fully funded at this point for the rest of Cotai.

Can you talk about how much of that CapEx -- remaining CapEx spend is going to be between using cash versus the existing facility there?

Sure.

So at the parent Company we have approximately $1 billion and after the tender at Wynn Las Vegas we will have about $250 million.

So that is the US cash.

The remaining is in Macau, including the $600 million transaction that we just closed.

You are right that Cotai is fully funded.

With the over $1.8 billion of cash on hand and a $1.55 billion revolver, there is clearly plenty of capital when you calculate the free cash flow for us to continue our strong dividends out of Macau and also be very flush at the parent.

How much cash would be subject now, Matt, to tax-free repatriation at this point?

Well, Joe, we pay taxes on our earnings, it just happens to be on the gaming revenue in lieu of income tax in Macau.

And so, what we do is our net income -- the earnings and profits are what you can redistribute -- or what you can distribute under the pre-filing agreements.

Joe, to change the subject slightly, we borrowed $3.1 billion and if we were to take it all down today we would be paying $84 million in interest for $3.1 billion.

I personally never thought I would live to see something like that.

It is a wonderful time to borrow money.

It is a shame that we are all done doing it.

It has been such fun and it has been so terrific for the Company's balance sheet and for our future.

We are very proud of that.

Matt -- Dr. Maddox has done a remarkable job and we are going to refer to you as Dr. Maddox from now on (laughter).

Having done this skilled surgery on our balance sheet we shall call you Dr. Maddox.

Next question, please.

I have just one question on Las Vegas.

RevPAR was up nicely in the 3Q.

Can you talk about what you are experiencing in the 4Q or what your views are for next year?

Obviously the first half of next year is a great convention and group calendar which helps you for the market overall, but your views and outlook there would be helpful.

Thank you.

Is Maurice on the call?

He is.

Maurice?

I'm on it, yes.

Okay, going forward we have had positive trends in fourth quarter as well as next year -- continue to look like we are continuing with the same momentum that we have had in the previous quarters.

And so, 2014 as well, we have always talked about here in Las Vegas, is trending very well on the convention side.

This is going to be our best year ever and we are looking forward to that kind of growth and improvement yet again next year.

Thank you.

Felicia Hendrix, Barclays.

Kind of staying on the topic of cash and, Matt, this is for you also and congratulations on your new designation.

This is the time of the year when everyone starts thinking about and talking about a special dividend for you all.

I know it is a Board decision, but is there any reason to think that their view on paying a special dividend has changed?

We really -- we have a Board meeting next week, November 4 and 5. We will all get together, discuss a variety of issues.

And it is our policy not to anticipate the Board's actions, ma'am.

So, if there is any decision that is relevant we would make an announcement after the Board meeting.

And so, I don't really want to give any indication either way because, frankly speaking, there are so many subjects that we are going to discuss on Monday and Tuesday, domestic and international issues, that frankly speaking as the Chairman, and I mean frankly, I am not sure about some of the directions that we will take with our cash and our positions.

So this is one time when not only do I not want to preface anything the Board may do, because I really don't know.

We have just got so many things to discuss.

The opportunities for our Company are extraordinary therefore the decisions are complex.

We are going to weigh a number of factors and try and make the most intelligent decisions in all directions.

You know that we are primarily an Asian Company.

Thank goodness and God bless that.

And we intend to stay an Asian Company primarily.

And so, I am not really -- have anything to tell you about the cash that can help you other than we'll see what happens.

Okay, we will wait and see.

That is very fair.

And Steve, given the recent news with Caesar's in Massachusetts, how do you think this will impact your chances, if at all, of being awarded a license there?

I came back from Boston Friday after testifying on Thursday before the Commission and Kim Sinatra told me that Caesar's had withdrawn from Suffolk and I was flabbergasted, it was so unexpected.

To give you some idea of the moving parts in Massachusetts, who knows what is next there.

It is very confusing.

And it is going to be the subject of conversation at my Board on Monday and Tuesday as to how we view the Massachusetts situation and such things.

And if you follow this it is quite amazing.

We have had a wonderful reception in Everett.

We got 87% of the vote, which is extraordinary.

Even the Red Sox aren't that popular in Everett.

So we are.

And that was very encouraging.

Understanding the rules, regulations and everything else in Massachusetts is daunting at this moment and hopefully we will get clarification as the days go by.

But in my 47 years of business in the gaming industry this is probably one of the most challenging complex situations, the Massachusetts situation, that I have ever faced.

And I say that honestly and to the point.

And I am trying to figure it out and so is Matt and so is Kim, so is Maurice, so is Gamal Aziz and all of us.

And we have more questions than answers usually.

And that is unusual even in new jurisdictions.

Very unusual.

We have not been able to have direct contact with the commissioners because of what is referred to in Massachusetts as expanded ethics guidelines.

Expanded ethics guidelines is what they say.

Well okay, new jurisdiction, new Commission, very complex legislation and so getting clarification on things is a cumbersome process.

And the barrier that has been erected between ourselves and those commissioners that would otherwise allow for an exchange of ideas and allow us to get comfort levels on a number of issues, not just our role as an international business company in Macau, but a number of other issues about the building, the rules -- it has been very challenging in Massachusetts.

And as I say, the Caesar's business was surprising -- unexpected.

And I am sure it has confused the hell out of Joe O'Donnell and the people in that deal.

I am sure that it is no fun being in their shoes at the moment while they try and sort all this out.

Anything else I can help you with?

I have a few more questions but I will -- we can end here now.

Thank you.

Shaun Kelley, Bank of America.

Hey, good afternoon, everyone.

Maybe to stay on the same topic of Massachusetts and some of the -- and possibly Philadelphia as well, if I could ask.

Just wanted to get your thoughts on what are some of the key milestones, Steve, in terms of just kind of next steps that we should be looking for or you are looking for in these processes?

Because clearly I think when we speak with investors about it as well we are also trying to kind of follow along with the process that we are seeing in the news.

But are you still comfortable with the timeline for selection being in -- I believe it has changed.

But for -- when do you see that now in 2014 in Massachusetts?

And also the process in Philadelphia, an update there.

Well, the timeline seems to change frequently.

As things unroll it is very hard to predict what the timelines are.

They give us deadlines and drop dead dates on certain presentations and submissions we have to make and then the response changes and timelines are altered.

So we are held to a very strict discipline, but the regulatory agencies, for reasons best known to them, have variable timelines.

So it is murky to me.

I don't know when they are going to decide or how they do it.

We know what the legislation says in Pennsylvania, it was to create jobs, encourage tourism, pay taxes.

In Massachusetts it is basically the same thing.

Other than that you are sort of left to figure this out for yourself because, as I say, we don't get conversations with these people.

We can't have -- we felt very strongly about this business about Macau and so the Commission was kind enough to give us a chance to -- ourselves and MGM, to make a presentation in general terms about Macau.

We don't -- we can't read the Commission except a few of their questions perhaps.

We really don't know what their attitude is.

You sort of have to -- to use a local metaphor, you sort of have to roll the dice.

It is hard to tell where you stand in many respects.

I don't know that I am entirely comfortable being in this position, but it is what it is.

Okay, I appreciate that.

And then maybe to switch to a different jurisdiction, different part of the world (multiple speakers).

I can add one other thing.

Basically these states are asking us to come and spend billions of dollars.

Now what if we were any other business they would stand on their head and spit wooden nickels to get billions of dollars invested from any other business.

But we find ourselves being treated, in many respects, as if they are doing us a favor.

When I say that I am not real comfortable with that status, you know, I mean it is just logical.

If I was any other business and I was willing to spend the kind of money, create the kind of jobs that these states have requested we would have the red carpet rolled out for us and the governor and everybody else would be delighted to talk to us.

But if you are in the gaming business there is sort of a crummy presumption that you might be unsavory and that burns me up to tell you the truth.

And I can try and get over it because then people say that you are arrogant or you are disdainful of the process.

But honestly in gaming very often, not in Asia, but here, you can come with your money, your best effort, your reputation, your brand and you get the impression that they think they are doing you a favor sometimes saying hi to you.

Now we get to decide whether to live with that or not and so far we are.

And we are doing our best incidentally to bring our best game to the table to create the jobs, bring tourism, bring people from outside the region into the region, fresh money, tourism, pay a lot of taxes, give jobs to the local folks, do all the things that cities and states crave.

But being an investor in America today is tough; creating jobs in America today is tough.

And that is just not Steve Wynn talking.

Take the next question.

Steven Kent, Goldman Sachs.

Well, I have a pretty easy one which is, Steve, are you saying Wynn Palace is going to open February 8, 2016 or in the first half?

Because in the press release it says first half.

And then second, and since you are -- and I don't blame you for being concerned about what is going on in Massachusetts.

Can you just talk about the risk/reward of this?

Why pursue these opportunities in Massachusetts or Philadelphia?

Is it for diversity?

Is it to move the needle?

Will be returns be that high or, like you say, would you rather just be an Asian gaming company as you increasingly have been over the past 10 years?

Well, there you go, Steve.

You ought to come to the Board meeting.

Here was the idea -- here is the idea out of my little brain.

Las Vegas, we are the prettiest girl on the block and nobody argues with that and we are going to remain the premier hotel on the strip.

There are wonderful hotels on the strip but we are the five-star puppy and we are the ones with the big -- with the record-breaking Casino Wynn and we have the bulk of -- more than our share of the top discretionary business from international domestic play.

But Las Vegas needs support domestically.

The amount of gaming activity in Las Vegas domestically is less than it was five years ago.

The non-gaming revenue in Las Vegas at our place, because we are very big in that area, nightclubs and all that sort of thing, restaurants, everybody is a foodie these days.

Non-casino revenue has gone up.

But casino revenue domestically is not a growing business.

It is because of the spread of gaming to the regional casinos.

The regional casinos, on the other hand, and we can use Caesar's as an example, the folks at Harrah's bought Caesar's because they needed a home base to offer as a reward to help promote their regional casinos.

The regional casinos, on the other hand, help support Caesar's in a very nice way by sending the best of their customers with slot jackpots and promotional rewards to Caesar's Palace.

This is such an important thing that the folks at Pinnacle Gaming made a deal with Wynn to use us as a base for their players.

And we get some nice players from Pinnacle and Pinnacle benefits from that.

It was a deal that Dr. Maddox made.

Now we said we weren't into riverboats and racinos, not our thing.

So we have always eschewed any opportunity like that.

But all of a sudden Pennsylvania and Massachusetts say we are going to put hotel casinos in the metropolitan area.

Now this means that the era of the grand hotel could come back again, beautiful hotels that people actually go and stay for the weekend, eat in fine restaurants, have meetings.

And sure, if they want to gamble they go down the hall and gamble in a room that is isolated.

I like that idea of the grand Hotel.

I love the old -- the heyday of the Waldorf-Astoria and the Ritz and places like that.

So I thought well, here comes a chance to resurrect the grand hotel in Boston and Philadelphia and we will bring our brand to those cities and bring people from outside the region into the region.

That will also help us increase our database in Las Vegas.

And Las Vegas, on the other hand, because we are a premier property, will make the people that go to Boston and Philadelphia even more excited about being part of the Wynn system.

So I saw this pretty picture of urban Wynn in Boston and Philadelphia -- hotels of our standard at our level complementing our place in Las Vegas and maybe us picking up $15 million or $20 million in EBITDA here as incremental profitability in Las Vegas.

And incidentally, in the process establishing a structure in Philadelphia or Boston that would be so exemplary, such a case study in what we do, so completely different from the relatively ugly face of gaming in America.

I think if you look at regional gaming in America, with one or two exceptions, it is homely.

Racinos are homely and unattractive places.

But we were going to build something that would be a case study on what is really nice and pretty in town.

And then if they had gambling in Dallas or Houston or in Chicago, they would come to us.

We would have an example, just like Wynn and --.

Listen, we got Macau because of Bellagio and Mirage.

It was our track record.

It was the things that we actually did, not what we said, that have made us the Company we are.

Actions speak louder than words, than especially developers speak.

So that was my idea about the urban Wynn.

And then you run smack dab into these freshmen regulatory agencies and their unbelievable preoccupation that maybe a gangster is going to get in or that -- I had one investigator, I won't mention any details, but asked one of my outside directors for proof of the ownership of his car.

For crying out loud, how ridiculous.

And we had to pay for this crap by the hour.

And another person wanted to ask a 56-year married person on my Board, a person of extraordinary character and reputation, for proof of his marriage license.

Well, deal fatigue sets in at this point and we say urban Wynn is such a fetching idea and makes sense on the domestic side of Wynn Las Vegas.

See, we take Wynn Las Vegas as a Company that is under leveraged with $3 billion of equity in it.

And we say we could change the name of Wynn Las Vegas to Wynn America and bill Boston and Philadelphia as part of Wynn Las Vegas, of Wynn America and Avenue domestic Company called Wynn America.

And that would be a model for us to go to other cities and grow in the future, not as a regional casino but as metropolitan hotel casinos in cities as I have mentioned before.

So Steve, that was the idea that got us into this.

And sometimes when you are faced with an alligator and you are up to your neck in them you say I came here to drain the swamp.

What happened?

So we are trying to figure things out.

But that was the thinking that was behind it.

At the same time our opportunities in Asia expanded rapidly and beautifully and we are well received there.

We love being there.

And for all intents and purposes Asia is going to grow in South Korea, Japan.

And our hotel in Cotai is going to be so preemptive.

The Wynn Palace it is called.

Wynn Palace in Cotai is going to be the most photographed casino structure in the world when it comes into focus in a few months.

And I think that is going to serve as an example of what we do when we put our best game forward.

So these are all things we are trying to sort out.

Maybe that is more information than you wanted, but that was my thinking as we went forward with urban Wynn and it is my thinking at the moment barring any changes.

And I think, Steve, that is why so many of us are asking these questions, because things are -- by the way went so well the past few quarters, the past few years.

So that is why I think the focus is on this.

By the way just as a -- can you answer that question I mentioned earlier about -- the press release says first-half of 2016?

I know maybe we are splitting hairs here, but you suggested Chinese New Year.

Well, we got this big bonus with Leighton that is built into our price if they make Chinese New Year.

And when I stood on the property Monday morning -- I got there at 6.30 in the morning before the workers showed up and Mike Harvey, who is on the call with me, says he is going to make it.

And Mike built the first two hotels over there, Wynn and Encore, before Leighton and now is running our job for us.

We paid a fortune to get this brilliant construction guy.

Mike, are you going to make New Years?

Yes, Steve, we will make it.

There is that Aussie.

And so, we will make Chinese New Year, but of course we have got a lot of water to swim.

We have got a channel to cross before we get there.

But we are feeling good about it, Steve.

Thank you very much.

Harry Curtis, Nomura.

I am not going to ask you about the impact of Obamacare on your labor situation, but boy I would love to.

Thanks, Harry.

I have got enough aggravation Harry.

Don't do it.

Let's go back to Asia.

So Wynn Palace, now Wynn Macau, it looks like there is some table shifting between VIP over to mass.

I'm just wondering can you talk a little bit about how you are designing the building for the target customer.

Are you changing your target customer to account for more premium mass?

And are you -- are there any scope changes that are being made as a result of that?

And then the follow on is you had mentioned Phase 2 for Cotai.

Maybe we call it Wynn Annex.

It is a beautiful name.

No, no, you call it Wynn Diamond.

Okay.

And my question there is can you just talk about how much incremental acreage is going to be left over that you can develop on and will it essentially be kind of non-gaming-oriented?

Well, first of all, we are constantly adjusting our tables, general versus junket versus our program to mass premium, the Diamond Club, as customer patterns shift.

We stay very loose and we are constantly reevaluating the floor.

We are also adding two major junket areas in the Wynn Macau facility on the southwest corner and they are quite special.

They are going to be very fancy and they will be done for Chinese New Year next year I am sure.

No, we are not changing our focus at Wynn Palace.

It has seven different types of rooms that cover a full range of every conceivable level of luxury.

The smallest room in the hotel is 720 square feet, but most of them are 900 square feet up to thousands of square feet.

Nothing that we have ever done is like the Wynn Palace and its $4 billion has been value-engineered.

We have no more scope changes.

The drawings are finished, the building is underway.

And it will cater to all sectors of the market.

There were -- in our Phase 2 we have property that is going to be primarily massive non-casino but some casino development.

Wynn Diamond will include the Wynn Diamond Coliseum of 15,000 seats; it will include an all suite Wynn Diamond Hotel that will be directly related, a 1,300 square foot suite, at the premium mass-market and above.

And it will have features and entertainment and restaurants unlike anything we have done before.

So it will have an enormous amount of -- the entertainment quotient is going to go sky high, especially with the Coliseum and the related spaces.

We will be giving more information about the Diamond Coliseum and the Diamond Tower as we go along, but it is not quite time for that yet.

But when we are done with the Diamond Coliseum and Wynn Diamond there is no more real estate left after Phase 2. We will have completely developed Cotai.

Thanks, Steve.

Did I hit all the points, Matt?

You did.

Okay.

Sure enough.

Thomas Allen, Morgan Stanley.

Hi, I am following up on the earlier comments about Wynn US.

So you entered into the online gaming space through a partnership with 888 and you applied for a New Jersey online license.

How do you think about that opportunity and how Wynn fits in?

Also I was just conceptualizing around the context of your comments around regional gaming versus urban Wynn.

Thanks.

Well, the Internet gaming and our first really big time crack at that is going to be in New Jersey.

The regulations have been promulgated tentatively.

I don't think the last chapter has been written on how the state of New Jersey intends to do that.

We are following it, as you can imagine, responsibly and closely because we want our shareholders to benefit from digital gaming in one form or another if it is to become a factor that is powerful.

But we have to take one step at a time.

You know it is illegal in America except in Nevada and in New Jersey.

New Jersey is going to be a very interesting case because it is gaming across the board.

It is tables and slots and all that stuff.

And so, we are -- we have got our toe in the water.

We are going to go at this.

I think we are also going to consider the possibility of social gaming for virtual gaming because it is probably time for us to take care of all that at once.

Matt may want to comment on this.

No, again, this is just -- we are entering the market, as Steve said, with our toe in the water to make sure that we learn as this rolls out or does not roll out.

It is clearly not a big piece of the Wynn strategy.

As Steve pointed out, we are an Asian company.

But we are making sure that we are paying attention and getting smart.

We have also got to make sure that if we do it we protect our brand.

We just can't limp in like another screen.

We have got to be special.

That is a challenge.

Sorry.

Go ahead.

And then just on Macau quickly, you had a very strong quarter.

I think margins were a bit higher than I think we expected and other people expected.

Were there any one-time things in there or was the whole different in direct versus junket, VIP?

Thanks.

Yes, there were no real one-time issues this month.

We did hold a little higher in direct than our life to date average.

So it is probably in the neighborhood of a say [$15] million adjustment.

(Inaudible) a good quarter.

Yes.

All of Macau is cooking, as you know.

And we always manage to get our share.

We have a very loyal clientele.

We deal to the top end of the market and people stick with us because we are so consistent in our standards.

Consistency is a wonderful word whether you are in private life, in business, even if you are a regulator, consistency is very important.

Predictability, reliability -- look, companies behave in the future as they have in the past.

The greatest way to evaluate anybody is to look at their history, especially one that is as established as ours.

And a lot of us have been together for 30 or more years.

There are no surprises in our stack.

We are a pretty [packed] quantity.

So whether you're looking at us as an investor or you're looking at us as a regulator, there aren't any surprises in the Wynn stack.

We are sort of a one trick pony.

We do resort hotels that have gaming in them, period.

And we do it a certain way, as you guys know, with a heavy, heavy emphasis on human resources and hopefully good taste in terms of our physical facilities.

And that is really a full-time job right there.

There are no other tricks to it.

That is why we had a good quarter and why we will have a good quarter next time too.

Great, thank you very much.

Robin Farley, UBS.

Two questions.

One is are you likely to partner in Japan or have desire to partner in Japan and have you had conversations along those lines?

And then secondly, just to clarify, when you and Matt were both talking about what the benefit to EBITDA in Macau of high hold, you guys were talking at the same time and the number didn't actually come through.

I think you gave a number though.

Matt said it might have been $10 million or $15 million.

Correct.

Great, thanks.

About Japan, Robin, we have been approached by some very prominent major institutions in Japan who have come and looked at our hotel -- a real intelligent thing for people interested is to come look at what we do.

Look at our neighbors, look at all these companies.

Are we all the same?

Hell, no.

Look at what we are.

Look at what we have done.

That tells you what we will be if you partner with us or if you are picking us.

Don't pay any attention to what people say, pay attention to what they do.

And so, people come from Japan, companies.

We haven't publicized it, we don't talk about it because it is too soon, but we are very keen on Japan.

And is it the right thing to be in a partnership with a Japanese Company?

Maybe, but it is a little too soon to tell.

We first of all would like to know what the rules and regulations are so we can assess the business opportunity.

We will get to have continuing conversations with the folks that have approached us who are very special indeed.

We jettisoned Mr. Okada and he will stay jettisoned and we will see what happens in Japan and South Korea and Taiwan, etc.

Okay, great.

Thank you.

Joel Simkins, Credit Suisse.

Hello, Joel.

Are you still there, Joel?

Joel, your line is open.

I think we lost Joel.

Buy, Joel.

Who is after Joel?

You have a follow-up, Felicia Hendrix, Barclays.

Hi, thanks for the follow-up.

Steve, can you just talk about your food and beverage revenues in Vegas?

They declined in the quarter.

We haven't seen that in the past.

And I am just wondering what the competitive environment might look like there in the kind of club entertainment area.

You just put your finger on it.

You hit it bull's-eye.

They opened a place down the street called Hakkasan and they opened a place over at Mandalay Bay called Daylight or something else, Cirque du Soleil is involved.

So the clubs proliferated.

And when they proliferated these guys started paying $80 gazillion to the DJs in sort of a frantic effort to capture the business.

You know, it is like a lot of things that happen in the casino business, everybody goes crazy for the top-line and they forget about the bottom-line.

We like the nightclub business, as you know, and we've sort of led the parade.

I think we still do in terms of profitability.

But we turned our back on some of the more outrageous disc jockey fees, wonderful guys they are and they are friends of ours and they worked for us for a third or a quarter of what they work for now.

So we go find new guys and we find and keep the ones that are really perfect for us.

We protect our bottom-line but we gave up a little bit of the top-line because it wasn't profitable.

And so, you see that reflected in some of the booze numbers from the nightclubs.

And so what else is new, right?

It is the same thing as when the less experienced casino companies start trying to bribe customers with credit to get them to come.

They try and buy the business.

Those executives come and go then after they screw up the place, they fire that guy and they get a new guy.

And then they settle down.

Look, there is a certain amount of money you can pay a disc jockey and have a business.

There is a certain amount of money that you can give in comps and promotional allowances to a customer and still have a business.

I hate to say it, those numbers are inexorable, they are undeniable and they live.

There is any number of idiots that will try and pretend that there is no gravity, that there is no Monday morning and that is going on in the nightclub scene here at the moment.

They will get over it.

Okay, thanks.

We are still having the best year we ever had.

Amit Kapoor, Gabelli & Co.

Can you share your perspective on how the Japanese landscape looks different this time around?

Is it the regulatory process?

Does it have legs and momentum enough to carry?

And has the selection of Tokyo as an Olympic destination sort of helped the prospects of gaming this time in Japan?

Thank you.

They haven't selected Tokyo at all.

And no, I can't shed any more light on it.

The situation is still undefined.

End of answer.

Sorry.

Grant Govertsen, Union Gaming, Macau.

In the third quarter obviously we had key volumes up nicely.

I think premium or high-end mass is probably up similarly.

Given that there are a lot of moving parts, but could you give us a sense for -- is the importance of the amount of rooms that you have already refurbished on this uptick in volume?

It seems that going forward that should have a meaningful impact in 2014 and beyond.

I am not sure I understood the question.

I think he is talking about our room remodel will be finished in December.

So we had 7% of our rooms out of service this quarter.

Oh yes, we had rooms out -- we are having a great quarter but we have some of our rooms out of service.

The remodel will be done in a few weeks.

And everybody loves the new rooms.

We upgraded them as we did in Las Vegas.

And we do that every five or six years.

If you do the math you have got to put away -- in Las Vegas, about $17 for every occupied room night if you want to refurbish every five or six years and keep the place beautiful and spotless and all that.

So we do it in China, we can do it (multiple speakers).

We run our business the same no matter what country we are in.

(Multiple speakers) my question was are you seeing a difference in customers coming because of the room refresh, perhaps an uptick in volume immediately due to that or is that too early?

No, we don't -- we didn't expect -- new customers.

We expected our same customers and our normal rate of growth.

There are always some new customers.

We didn't think the remodel itself would changed the landscape dramatically; just reinforce our dedication to excellence.

But we didn't do it with the idea that it would be a game changer.

And I think that would be expecting too much.

I hope that answered your question.

Thank you.

I would now like to turn the call back over to Steve for any closing remarks.

No, I just -- I am thrilled with the fact that timing has been excellent for people like ourselves who are expanding and borrowing money.

So far we are expanding and borrowing money in Asia.

I wish -- or let me put it this way, I hope that as we go forward that the atmosphere, the opportunities in the United States of America will come back down to levels of predictability, cooperation and respect that should be shown to companies like ourselves who are willing to risk great capital that have long, long respectable track records.

That we'll have opportunities to make intelligent investments in our own country and create jobs in our own country that are as good as the ones we find abroad.

Sadly that is not necessarily the case during this phone call in October of 2013.

And I think that we ought to take a real careful look at ourselves, whoever we are, and ask that question -- do we really want to encourage job creation?

Do we really want to welcome investment and risk-taking by companies like Wynn, like Sands, like Apollo and Texas Pacific?

Do we really want that?

Or are we so preoccupied with foolish distraction and misdirected priorities that we kill that wonderful energy that makes a better life for people?

Because in the history of the world the only thing that has ever created a better standard of living for the population has been the demand for their labor, the creation of jobs.

And unless you are talking about Obamacare and the IRS the government doesn't create the jobs.

The government is supposed to create state and local governments and the federal government is supposed to create the environment in which those jobs can be created.

God knows guys like us, our crew here at Wynn, we are dying to grow.

We are dying to spread our wings and try new things.

But damned if we are going to do it in the face of adversity from Washington, DC or any other capital.

Why should we?

Life is too short.

That's it for this time.

Speak to you in 90 days.

Thank you for your participation in today's call.

You may now disconnect.