永利渡假村 (WYNN) 2015 Q3 法說會逐字稿

Ladies and gentlemen, thank you for joining us today for the third-quarter 2015 earnings call.

(Operator Instructions) It's now my pleasure to hand the program over to Steve Cootey, Chief Financial Officer.

Please go ahead.

Thank you and good afternoon.

Joining the call on behalf of the Company today are Steve Wynn, Matt Maddox, Kim Sinatra, and myself here in Las Vegas.

Also on the phone are the operational management team for both our Las Vegas and Macau properties.

Before we get started, I just wanted to remind everyone that we will be making forward-looking statements under Safe Harbor federal securities law.

And those statements may or may not come true.

With that, I'll turn the call over to Mr. Wynn.

I think the numbers speak for themselves.

General comment covering both Las Vegas and Macau is this: we don't see any major change or new development in Macau concerning our existing operations other than all of the comments we've made in the past about the confusion, the ambiguity about what we face in terms of tables in the upcoming months, as we are at about 170 days before the opening of the Palace, which is the most significant event in the Company's near future.

Based upon what's happened at Galaxy and what we expect to happen at Studio City, which has just today found out how many tables they are going to have in the last two days -- a few weeks before they open.

The confusion and the rather mystical policies that are governing the assignment of equipment in these new hotels, which are tremendous diversifications away from pure gaming into all other forms of non-gaming -- the confusion about the tables and the government's position in this regard has made it very difficult to plan for employees and other aspects of the facility.

I mention this early in the conversation, because it's become a major issue in Macau as to the impact of government policy on planning for employment promotions, hiring, and compensation.

None of us are really clear on what our environment is going to be like going forward.

And it makes planning and adjusting almost a mystical process.

And this is, I think, probably the major topic of conversation in executive conference rooms, as people try and resolve their planning on Human Resources in the Macau market.

Our construction of our hotel in Macau is on schedule.

We're scheduled for March 25 opening.

And the results of the last quarter were consistent with the things we've seen in previous quarters.

And that is almost approximately half business of VIP is gone and may be shrinking.

It's caused us to review our credit policies and our attitudes toward junket operators.

And some of them have gone out of business, and I think others will indeed go out of business, which means you have to focus very intensely on the policies that you employ with regard to the credit that the junket people enjoy in terms of the chips that are advanced to them.

Our mass business is sort of flat.

And I think that's a general description of it.

And that explains the earnings in Macau.

Now, in Las Vegas, we are in this market the principal beneficiary of international business -- and we have been since we opened in 2005.

So if a segment of the international market is impacted for extraneous reasons or external reasons, like a change in government policy or whatever in China, then we would be the principal victims or we would suffer the most.

And that's exactly what happened.

Any change in our earnings in Las Vegas is strictly a reflection of a drop in Asian baccarat business.

The rest of the segments in our Las Vegas business are pretty good.

Room revenue and stuff like that is healthy.

Our convention business is healthy.

Our food and beverage business is healthy.

And we're very satisfied with Las Vegas.

And if anything, the problems of China are causing us to refocus our energies here in America even more intensely.

We're happy that we are moving forward in Massachusetts in spite of the friction created by the mayor and the administration in Boston, which for some reason is unwilling to accept the decision of the Casino Control Commission gracefully and keeps trying to use various tactics to say that we are in Boston, not in Everett.

It may sound laughable at this point.

And in a perverse way, it is a comedy; but it did cause us delays.

But happily, they are pretty much behind us now, and we're underway with remediation.

And we're looking forward to groundbreaking in a few months.

And the Massachusetts project, which we think is a very exciting thing, will be on its way and hopefully open in 2018.

I'll leave the rest of any general remarks before we take questions to Matt, or Ian, Gamal, or Steve, or Maurice -- or anybody on the call who would like to expand or alter what I've just said.

And there are people on this call that have a tighter feeling -- I've been very much involved with design in the last several months.

So if any of the operating executives want to close in on this, please feel free to do so.

Gamal, do you have anything to add?

Ian?

Either one of you?

Steve, you have articulated it very well.

It's still a guessing game when it comes to number of tables and the number of employees -- the quotas for the employees.

And there is a reluctance.

If there are any good news which have been rumored, they are just that.

And there is a reluctance to actually come out and indicate to the companies that are working here that they are deliberately easing some of the restrictions they've been placing on us.

So we're hoping for the best, and we hope we'll be treated fairly.

But as you say, the property is looking great.

And are opening date is March 25.

And we're very hopeful.

The question is: will we -- will our property be overwhelming enough to kick that market into a different place?

It's hard to say; I have no idea how many tables we're going to have.

The notion that a person who spent $2.5 billion -- I'm talking about Melco now -- would not know how many tables they are going to have three weeks before they open is so preposterous that it's worthy of comment.

And how in the world do we underwrite the job security of the local workforce in Macau, keep the promise of promotions and better opportunity, under these circumstances?

I am at a loss to answer that question.

And as we go forward in the planning of Wynn Palace, we are hopeful that we'll be able to press the issue and get a stronger -- more clarity -- stronger and much more clarity from the leadership of the local government.

I think we should open it up for questions.

(Operator Instructions) Steven Kent, Goldman Sachs.

This is actually Rebecca Stone from Steven Kent's team on for Steve.

I was wondering if you could talk a little bit more about Las Vegas.

I did notice that food and beverage is doing well.

You spoke, Steve, to some of these things doing better to maybe offset some of the lack of international business.

Is this something that you would be looking to adjust further in Las Vegas to appeal to more of these types of customers?

Thank you.

Yes, ma'am.

We've done a whole bunch of things -- we always adjust.

I mean, we're professionals.

I would describe us as such.

And we run the business in uptimes and downtimes, and we adjust for the situations.

We made a whole bunch of changes in the casino, both physically and procedurally.

We've even fooled with the rules of the game.

It's been 50 years since Las Vegas increased the price of gaming.

We're way overdue, considering the cost of running games and payroll.

We've adjusted our yield rate management approach.

Maurice Wooden is here, and he's very good at that in the whole American operation.

We've made a host of adjustments.

We were off in one month from $100 million in baccarat to $45 million -- we're off $55 million in baccarat, but we made almost the same amount of money because of all the adjustments we made.

And they go across the board, throughout the hotel, in the way we price the hotel, the restaurants, and entertainment, and gaming.

We don't sit by and allow ourselves to become victims of anything -- of any aspect of our operation over which we have any control.

So my long-term view of our operations in America and in China is still positive.

It's the short-term that's bewildering.

And it's bewildering enough to complain about it, but as far as suggesting here and in China, it's a constant process.

I was in China last week, and I kept my people up until 2:00 in the morning on the subject of VIP.

And then we reconvened at 8 AM again and went for another six hours.

I think altogether we spent 15 hours -- the most incense kind of consultation with every smart person we had that dealt with these subjects.

So adjusting is what we do.

And, I mean, the description of those -- detailed description of those adjustments could go on for a half hour.

But know that we are doing it, and we are doing it successfully.

Thank you very much, Steve.

Joe Greff, JPMorgan.

Good afternoon, everybody.

Earlier this month it was reported in the local Macau media that the director of the liaison office to Macau in mainland China -- that the central government is going to help support Macau's economy.

And these comments followed similar statements from Macau's Chief Executive last month.

I think no real specifics were given.

So my question to you, Steve, is this: how do you interpret these comments?

What specific measures can or will be introduced based on your dealings with those sets of government officials?

Or do you think these statements were more generic and/or meant to send a signal to turn mainland Chinese, who are maybe, for the lack of a better word, nervous about going to Macau?

And then I have a follow-up.

Who knows?

I mean, these facilities are enormously diversified non-gaming buildings.

But they depend on their survival -- their payroll, their operational viability depends on the gaming equipment that was always part of the whole construct.

Here in America we would never have a Las Vegas of the diversity we've had if the city had told us how many tables we could spread.

The table cap is the single most counterintuitive and irrational decision that was ever made.

Here we are, spending billions of dollars creating non-gaming facilities, and then arbitrarily someone says, well, you should only have this many tables.

No jurisdiction ever has imposed such -- that kind of logic on us.

And what it's done -- it's turned our Human Resource planning inside out and upside down.

And you can tell by the tone of my voice the extent of my frustration on this point.

My frustration on behalf of our colleagues at Melco, who made commitments for 400 tables.

Why on earth they have to deal with half as many is beyond my -- anything that I can understand in the 45 years of experience I've had.

It isn't good for Macau.

It's not good for the citizens of Macau.

It's not good for the tens of thousands of employees of Macau, who were looking forward to promotions and raises and all kinds of benefits that accrue because of the viability of these resorts.

We build tens of thousands of rooms, and restaurants, and attractions -- but we say, you're not allowed to gamble, because you can't have the tables.

Well, that's one of the reasons they come to Macau.

If you wanted to undermine and scuttle the viability of that industry, you would put in table caps.

And you can tell I'm a tremendous critic of that decision, because I don't understand it in terms of anything in my 45 years of experience that explains it.

And to see the predicament that the Melco people find themselves in, because they made covenant agreements, is dazzling to me.

And you know, I've complained to the government about this and tried to understand what the rationale was for this thinking.

And I've never gotten a reasonable answer.

And hopefully, hopefully, the desire that you mentioned -- statements by the central government or by the local government to support this industry and, mainly, support the people that work in that industry that are the whole interior -- all of the young people in the families of Macau that have become part of the hospitality industry -- a huge amount of them are people that are related directly or indirectly to the casinos.

And what we're getting now is unemployment.

I mean, the junket operators are the beginning of it, because they employed all kinds of people from Macau.

But forgetting the junket operators, what about the rank-and-file dealers in the mass casino that cater to the tourists?

What happens to their jobs?

What happens to their promotions?

I don't know whether the local government has been intimidated by the unions, because -- or something, but the unions are going to end up acting up about this subject before it's over.

And we as operators are going to have to stand there on the sidelines, bewildered at the position that the industry finds itself in.

In my 45 years of experience I've never seen anything like this before.

And hopefully, hopefully, the leadership of the community will intervene and correct this aberration that threatens the employment security of the citizens of Macau -- and thereby, also, relieving the predicaments that people like the Lui family at Galaxy experienced, with the billions of dollars they spent; and Lawrence Ho and Jamie Packer's company, Melco.

But these are problems that -- when you say that there's been -- the government has made general statements about supporting us, or supporting the people of Macau, I think it's time for them to put their actions where the rhetoric is.

But the rhetoric won't solve the problem.

Great.

And then I have a second question -- when do you start to migrate employees from your current Macau operation to Cotai?

How many employees do you see shifting in this quarter?

How many in the 1Q?

And, I guess, overall, how much fixed OpEx shifting is there going from the Peninsula to Cotai?

And that's all for me.

Thank you.

Ian and Gamal -- you deal with it.

Steve, we have approximately 2,000 people.

That all depends on people that want to transfer from Wynn Macau to Wynn Palace.

But quite honestly, we will be able to tell more once we know how many tables we're going to have.

As you said earlier, the tremendous amount of ambiguity -- and there is no clarity as to how many.

And the timing is going to be about the first quarter, so we can get them acclimated to the new property.

But we don't have an exact number.

We have a range that -- we know the number of employees that have requested a transfer, which would be outstanding for Wynn Palace to get that culture transferred.

But the exact number we will know as soon as we know how many tables we'll get at Wynn Palace.

Gamal, I'm going to interrupt you for a minute.

I mentioned earlier that the people at Studio City found out a few weeks before opening what the story is about their tables.

Now, Macau is proud of the five-star status -- the legitimate five-star status -- of Wynn Macau.

It was hard to train people to get to that level of service, but it's been a source of pride for the community and for the employees themselves.

We cannot train people and maintain service levels in the non-casino and casino areas when we don't have the time to train our people.

So the notion of finding out how many tables you are going to get three weeks before you're opening is outrageous and ridiculous!

Ridiculous is the word for it!

We've never operated a business this way.

We train people.

That's how we give them a future -- by training them.

That contributes to their promotions, their pride, and to the guest experience.

And at the end of the day, guest experience is the only controlling factor in the survival of the hospitality industry.

Go ahead, Ian.

The question that they want you to deal with is how much of the expense load you are carrying at Wynn on the Peninsula that would be relieved, as people that we're carrying on your payroll were heavy -- in our payroll on the Peninsula Hotel -- deliberately, as part of our training routine to maintain the high level of service that Wynn enjoys in our reputation in Macau.

So, Ian, what -- I think his question is: how far will your expense load drop if you were to get the tables you were supposed to get?

Which was 500, when we started building, confirmed by the government.

Steve, based on current business trends, there is a significant opportunity to migrate people to Wynn Palace -- trained, highly qualified people, and not necessarily need to backfill those people at Wynn Macau until business levels pick back up in the city.

So for the immediate outlook, there's a significant opportunity to transfer people over.

And it would be a significant savings on payroll for Wynn Macau without any falloff in service quality.

Understanding, to complete that answer, that the people that we transfer that we don't have to replace in no way makes up this entire workforce at Palace.

There is a tremendous amount of additional hiring that has to take place in order for that enterprise to exist.

Does that answer your question?

It does.

Thank you, Steve.

Thanks, everybody.

That's the best we can do under the circumstances.

Carlo Santarelli, Deutsche Bank.

I have two questions -- for starters, maybe Gamal or Ian, if you guys could comment a little bit on what you are seeing within the mass business today?

Obviously, the slots were a little bit weaker, but the mass tables seem to have held up fairly well from a drop perspective on a sequential basis.

So the question is: are you guys starting to see any stability or feel any comfort in at least that portion of the Macau business?

And then a bigger-picture question, maybe for Steve -- Steve, as you think about some of the government's conversation, and some of the comments that have been made over time about diversifying the economy of Macau -- in your opinion, longer-term, do you get the sense that Macau has the potential to really transform itself away from being a predominantly gaming market, much in the way that Las Vegas did over a number of years?

I'll take my part first.

Absolutely, Las Vegas -- Macau, rather, has transformed itself -- not shall, or can, or will.

It has been transformed by the projects that have been built, in direct response to the leadership and the suggestions made by the local government!

Everything from promotions to the creation of facilities -- exactly that has already taken place.

But understand that the reason that these extraordinary non-gaming attractions exist is because the damn casino is the cash register!

That's what drives Las Vegas!

40%-odd of my hotels -- the ones that you guys know, that we built with this organization in the past -- none of them have ever had even half of the revenue be gaming.

Over half was non-gaming.

But none of them could have been built or would exist today if anybody had given us a table cap!

Because the people that stay in the rooms want to go downstairs and play sometimes, besides eating and entertaining, and shopping, and going to the spa, they want to play, or they wouldn't come to Macau.

So we support these extravagant non-gaming diversifications with the casino.

That's the truth of it.

That's the irrevocable, undeniable, inexorable truth of it.

The gaming allows the non-gaming to flourish.

And that's the lesson we're trying to get to penetrate the leadership of Macau -- that the very thing they want requires that they let us run our business based upon our experience, our long experience, everywhere else.

And that's where the heart of the frustration is -- that somehow we haven't been able to get that truth really accepted.

And I'm hopeful that before we have demonstrations, or real angst, or -- you know, I had an employee approach me when I was in Macau and say, Mr. Wynn, is the government angry at the union and trying to cut back on gaming employees?

I said, well, I don't have any reason to think that.

But that's the kind of stuff that's going around in the staff dining room.

This confusion is not isolated to management; it's now spread to the employees.

Very unhealthy situation, both socially and politically.

And when I'm asked questions like that, I don't have a clear answer.

And I want to get away from this kind of thing before it gets out of hand.

Now, Ian, you can ask the rest of it -- the mass gaming -- I don't have a position to answer that question.

Mass table revenue is flat as against a year ago.

Against a quarter ago.

A quarter ago -- but not a year ago.

A quarter ago, sequentially.

It is flat, Steve, but we've obviously had a considerable falloff year-over-year in the very high end of mass, which is very similar to low-end VIP.

So those players have evaporated or are returning less.

So we've actually driven more business in the mid-tier.

And as we've taken tables back from the junket operators, we have an additional 23 tables in mass over the same time last year.

We've managed to drive more business in mid-mass.

Ian, I appreciate that.

So we have seen signs of stabilization.

That's great.

And just a follow-up on that, Ian: so you are -- in a sense, I guess what you are saying is some of the VIP players that trickle down into the high-end mass -- are you not seeing as much of them, and hence you are fishing in different pools than you otherwise would have historically?

Yes.

Correct.

And we're allowed to do that because we've got more tables that we've migrated to mass.

And right now we're giving approximately 58% of our room inventory to mass -- that's table games and slots.

So what we've been losing out on junkets, we've been trying to drive into mass in the new (inaudible) facility.

All the more reason why you need more mass tables -- so that people then amuse themselves.

That plays in.

When you have lower level of gaming, amusement gaming, you need more tables to deal to those people.

That's the only hope that you have for compensating the loss of VIP.

Now, at Wynn, we were able to transfer, as he just said, a couple dozen tables.

But in Cotai, with these big hotels and their massive footage that's dedicated to non-casino, you need tables to do that.

You can't do it with 150 or 250 tables.

You need 400 or 500 tables to do it effectively.

And to support the workforce -- otherwise the workforce gets cut back, and you have layoffs, and all these things that have never happened in my career.

In 45 years I've never had a layoff.

I think we once dropped 100 people in this company -- 45 years!

We don't do layoffs.

People come to work for us, they get job security.

I've never broken a promise about job security of my employees in my entire career, and I don't like facing that possibility one bit!

Understood.

Thank you, everyone.

Robin Farley of UBS.

Robin, your line is open.

Robin, are you there?

Well, we miss you!

Shaun Kelley, Bank of America.

Good afternoon, everyone.

Steve, you mentioned a little bit earlier in the call here that you had done a bit of a deep dive with your staff in Macau regarding the VIP business.

And one of the other headlines that sort of did the rounds in September was around the Dore junket business that was operating out of Wynn Macau and some of the other casinos as well.

I was just curious just for the team's view on whether or not you thought those issues were fairly isolated and already kind of dealt with, or if there's going to be any continued fallout from those or other similar types of issues going forward?

Good question.

It didn't have anything to do with us.

It had to do with one of their people in their financing syndicate.

You know, the way these guys operate is that they get people to invest -- almost like a mutual fund or a hedge fund -- and then they give these people a return each month on the financial support that they get from these groups of lenders.

And apparently one of the employees who was interfacing with the lenders absconded with their money.

It had nothing to do with us.

And we went to 100% cash with Dore; they had all the liquidity they needed right in the cage.

And when we found out about it, we terminated any extension for as much as 1RMB -- or one Hong Kong dollar -- to Dore.

And they were able to cover it, because they had the liquidity that allowed them to do it.

Whether someone else is going to -- there's going to be another defalcation or embezzlement is hard to predict.

Criminals tend to be surreptitious until it comes to light.

But I think all the junket operators took that as a signal to tighten up on their internal controls, from what I'm told.

So I don't suspect that that will happen in the matter that it happened at Dore again.

But the overall viability of the junkets themselves depends upon the liquidity, and the wealth, and the retained earnings that they've kept.

We don't see their numbers, and so we're very conservative in how we deal with them.

We don't know their retained earnings.

Some of them have gone public, but the information that you study under those circumstances is at best described by the word murky.

So we're left to manage our end of this transaction, which is to shorten the string and the length of time that we give these people -- how many non-redeemable chips we give them.

And the amount of outstanding unredeemed chips have has dropped dramatically, almost by half.

By half, yes.

Which reflects the level of business almost identically.

That's about as deep an answer I can give you.

Is it satisfactory?

No, it's great.

Thank you very much.

And then my other question -- I think you were really clear about some of your views as to how the people and employees are impacted at some of your facilities going forward by some of the policies out there.

We've heard from some people in the market that potentially the Macau government may also be looking to -- at potential restrictions around the blue card policy, which I think is some of the immigrant labor that they allow into the market.

I was curious if that was at all impacting your view, either toward staffing levels in Cotai or if it was really just isolated to more of the table counts and your ability to kind of plan ahead?

At the present time unemployment in Macau is almost 0. The government wanted us to build highly diversified, non-gaming structures.

We went and did it for $10 billion or more, if you count all of us -- the largest being us at $4 billion.

How in the hell can you run those places without employees?

I mean, what are we supposed to do?

Shut down the floor?

Close a restaurant?

Curtail the very thing that they told us that they wanted to see happen -- without employees!

It so ludicrous that it defies rational conversation.

Some of these places are going to close locally, creating unemployment.

We can absorb them, I think, in the industry.

But still, the extent of the new operations are so comprehensive that in order to operate them appropriately, you still need more people to work.

And the spectacle of these buildings being unattended is beyond -- beyond imagination and will have dire consequences in the community on a couple of levels.

The first level will be that it will negatively impact the job security of the local Macau citizens and undoubtedly result in rather severe complaining.

What form that will take, I'm not sure.

The second thing is that the hospitality profile of the city will be severely compromised, and that will take years to recover -- years.

You only get one chance to make a good impression.

And if you bogey that impression, if you blow it, it's a long time to fix it -- and maybe never.

What is important is that the Macau market, as it's viewed by the world, never loses its viability.

Because the day that it loses its viability, it will lose its long-term longevity.

And the entire thing gets really damaged severely.

That will impact the community of Macau in a very negative way, and that's one of the things that concerns me a lot, because employee attitudes -- you know, everybody in the world, including all of us on this call today -- it has been established that our present state of mind, our happiness, our sense of security is fundamentally a function of how we view tomorrow or the future.

You tell someone that's feeling poorly, suffering from an ailment or some discomfort, that they are going to be better in three days, and they feel better today.

You tell someone who is feeling great today that they are going to be awfully sick next week, and they get depressed today.

So the attitude of the employees -- their since of security, safety -- their notion of a positive future for themselves and their families is a critical management responsibility.

Now, to a certain extent we control that within the walls of our buildings.

But every once in a while, depending on public policy, we lose control of that because of factors that are outside of our control.

And my feeling is that Macau at the moment is on the edge of that moment, which should be avoided at all costs.

Thank you very much.

Harry Curtis, Nomura.

Hi, Steve, and thank you for being refreshingly frank here.

I wanted to just go back to the meeting that you had with your employees on the VIP topic.

What I'm trying to get a better sense of is: was there any conclusion that you all came to about what the intent of the policy changes related to the junkets really has been on the part of Beijing?

Well, that's a good question.

And from what we understand, reading the South China Morning Post and other sources of information available to us, President Xi discovered that the people of China felt the government officials were corrupt and feathering their own nest.

And he thought that that was very malignant for the health of his party and the future of his country and made a decision to correct that and have a campaign against corruption.

And considering the amount of people -- if you believe the newspapers -- that have been charged with misconduct of one degree or another, President Xi did the right thing for the right reasons.

And because of the way mainland China works, every businessman in that country dealt in one way or another with a government official, because the government controls so many aspects of public policy and business interface.

So businessmen who had nothing to hide, as well as those who might've had something to hide, all went into the foxholes or into a defensive posture, because they didn't know if the next shoe was going to drop or what the next thing was going to happen.

And it has caused, across the board, a contraction of all of VIP consumer spending at the higher level, which includes Macau.

And that explains the problem that the junket operators are having, plus the restriction on the credit cards and things like that.

So in one respect the junket operators faced a problem that was part of an intelligent central government policy.

No argument about that.

Corruption is a bad thing, and President Xi did the right thing, just as I would in my Company if I thought there was corruption to that extent.

Fernando Choi, the head of the government of Macau, or President Xi Jinping, or a President of a public company -- or a private company, for that matter.

It is bad business to have corruption.

And it should be stopped, because it's unhealthy and goes to the root of the viability of any organization or institution.

So there's something that in our meetings we acknowledged, and we accept as inconvenient, perhaps, in terms of junket operators, but not necessarily a bad thing.

So we adjust to it.

And that was the way we dealt with that in our conversations.

Alternatively, the reason those conversations took 15 or 16 hours is we're juggling the reassessment of our facilities and adjustments to our facilities to cater to the new reality that we face, which, incidentally, is much more like Las Vegas than what Macau was in the past.

And that's fine with me.

I have no argument with it.

But in the process of adjusting, how do we run our facility under the new reality?

And we can do that, but we need tables in the casino to support the restaurants, and the convention and meeting space, and the entertainment.

Of the $4 billion, the casino represents perhaps $400 million of it.

The other $3.6 billion went into other things that weren't part of the old way of looking at things.

So on one hand we understand what went on with the campaign against corruption, and we have no issue with that or the thinking that went into it.

What we have an issue with is the leadership that we need to have in the government to help us make the transition to the new reality.

Can I ask just a quick follow-up on your comments?

You mentioned a restriction on credit cards.

I'm guessing it's on the UnionPay cards.

Yes.

And can you give us a sense of -- has that been implemented?

And if it hasn't, any expectations on how it might change customer behavior?

Well, we weren't in the UnionPay card business to the extent of other people.

So it didn't mean that much to us.

And, Harry, you should just look at the mass revenues and see how they are doing.

I think that enforcing the rules around UnionPay are overplayed in the media.

Way overplayed.

I'll leave it to others.

Thank you very much.

Thomas Allen, Morgan Stanley.

Good morning, guys.

This is Mark Savino on for Thomas.

Just a quick question, back on Vegas.

I'm wondering if you can maybe give just a bit more detail as to what you are actually seeing in the high-end baccarat business?

Maybe if you could parse out visitation versus spend for visit trends among those high-end players?

And then, really, if you guys have any sense as to how close you might be to a bottom there?

Thank you.

Maurice, do you want to deal with that?

Well, we're continuing to see year-over-year where you have a reduction in that high-end play on the international side.

Again, it's like Steve said -- we're adjusting to it here to make sure that we -- we look at all other areas to make sure that we are recovering whatever that loss might be.

We really don't understand what that bottom might be.

We certainly have still a good flow of international business, but it wasn't like 2014 or 2013.

And we're mainly talking on the gaming side.

It's not just Asia.

Latin America, with everything that's going on there in Brazil and in other places -- clearly, that's down as well.

So our high-end business was down by about half from a revenue side compared to this time last year.

Very helpful.

Thank you.

Kenneth Fong, Credit Suisse.

As a local analyst, I can share your frustration in this operational uncertainty and ambiguity on table allocation thus far.

So on third quarter, am I fair to say that direct VIP actually hold low -- that actually hurt the margin?

If so, what is approximately the EBITDA [in for this]?

And the second question is: this operational uncertainty on table allocation -- will it affect the decision and the development of Wynn Diamond?

I'll take the first one.

It's Matt.

So, you know, as you see that table mass was up, but that EBITDA increase was offset by -- you are exactly right -- direct VIP was down, and our slots were down.

So those two offset the increase in table mass.

He asked about holds.

The hold percentage was fairly -- was normal in direct VIP.

It was the volumes.

Thanks.

And about Wynn Diamond?

He wondered about the investment.

Yes, the Wynn Diamond -- would this uncertainty over table allocation affect that?

The government told us that we could continue to develop our land concessions so long as it was Phase II, which it has always been.

And we have designed a remarkable Phase II.

But until we understand about Wynn Palace, it's -- our ability to look into the future and plan financially is, again, compromised at the moment.

My long-term confidence in Macau is still strong.

I love the position we're in in terms of being part of that community.

The issue here has to do with short-term adjustments, not long-term confidence.

At the end of the day I'm in the same position as the head of the Macau government and, for that matter, President Xi Jinping.

My job is to create a stable environment in terms of Human Resources, job security, and a better future for people.

Isn't that, after all, what governments are doing or hopefully doing?

And I say at the 11th hour, the government does the right thing and supports the health of its citizens, as businessmen will support the health of their employees.

Because the ultimate truth is that the only thing that matters is the happiness of the people -- whether they are employees or citizens of a community.

And they are the ones that touch the public, because only people make people happy.

Only people make happy communities.

Only people make successful companies.

And the job of leaders are to do everything and anything in their power to create a happy and positive outlook to the future for their constituencies.

And I strongly believe that when the dust settles, leaders of companies and governments do the right thing.

That's the basis for my long-term confidence in the market and my long-term confidence in the leadership of the government.

We all come to the same conclusion when we've had enough time to see.

Hopefully, we come to the right conclusion before we avoid (sic) catastrophic, unpleasant, or disruptive alternatives.

We anticipate certain results and don't let them occur.

So whether you are a CEO of a company or you are the head of a government, you have to have a little bit of an ability to look around the corner and see what's coming ahead of you.

And if that's not good, turn away from it.

Amend your policies.

Learn from experience and come to a more sound conclusion.

That's what I hope for businessmen, and I hope for ourselves and, for that matter, for the government.

Great.

Thank you.

That's it for me.

David Katz.

If we look at the forthcoming new property in Cotai and presume, frankly, that it will be possibly the most desirable in the market, as is typical, and is an attraction, can you talk about the strategies and (technical difficulty) presumably somewhat of a new customer mix, and how you are thinking about defining, and engaging, and partnering that customer mix as the property?

There's no mystery as to who those customers are.

They are people from Taiwan, Hong Kong, mainland China, who want to live life in an exciting way for a day, or two, or three on vacation.

They want to be served well, stay in lovely hotels, eat in good restaurants, enjoy entertainment and attractions that they can't get at home.

And -- while they are there -- play in a casino, which is exciting, and have fun.

Their experience is under the control of the staff that serves them as well as the environment in which this all takes place.

That's the story in Las Vegas.

That's the story in Boston.

That's the story in Macau.

It's the story in Manila.

It's the story in Biloxi, Mississippi.

Nothing changes, nor will it ever be different than that.

Those are the truths of the hospitality industry in any of its variations or iterations, including Macau or any other city on earth.

We build buildings.

I'm sorry, go ahead.

No, no, I'm sorry.

I wanted to just maybe reiterate the question in a far more candid way.

Do you expect this market to become more competitive -- more aggressively competitive?

And how do you think about whether or not to engage in that?

It's already competitive.

It has been competitive for quite some time.

Look at Las Vegas, with the dozens of hotels, the thousands of tables, the tens of thousands -- 150,000 rooms.

Millions upon millions feet of convention and meeting space, theaters, cabarets, public entertainment, volcanoes that erupt, fountains that dance, pirate ships that sink, trees that come out of the floor, gondolas that go across dancing fountains for $100 million.

All of this is a fight for the audience that's here.

Discounts given at the tables, complementaries.

It's so intensely competitive in Macau -- and has been for a long time -- that it will continue in the same fashion that it is enjoying now.

There will still be a stratification of the public.

People who can afford choice and who demand higher levels of service; better food; larger, more sumptuous rooms; better meeting facilities; more fascinating entertainment attractions -- they will migrate to places that provide that.

Other places that deal to the economy end of the market, such as Circus Circus in Las Vegas or other places in Macau -- they have their own level of competition.

But you know there's Kmart, and there's Louis Vuitton.

There's Macy's, and there's Neiman Marcus.

They compete.

Neiman Marcus competes with other companies of a similar nature.

We do as well.

Louis Vuitton competes with Chanel, and Christian Dior, and Prada; and we're at that level.

We're the five-star operator.

We offer choices for people that want the best.

And when we do that, we to a certain extent give up another part of the market to other people.

So it's good that a place like Macau or Las Vegas has choice for people.

What's wonderful about Macau and Las Vegas is that if you come to that city, you can go from Wynn to Circus.

You can go to a lower-end casino to Wynn in Macau, and you can dial up whatever it is that suits you at the moment.

And that's the secret to making a great destination city -- is choice.

The bigger the menu, the more powerful the destination resort.

But I assure you that at every level there is competition.

Am I being helpful to you?

Yes.

I can recall in Las Vegas, during the downturn, operators would tend to reach downmarket and promote more.

And do layoffs.

Correct.

-- and they laid off, and they lowered their expenses, and they laid off thousands and thousands of people.

Not here.

Because in the business that I'm in, I cannot juggle my service levels.

I cannot bounce my staff around because the market gets soft.

No, no -- we have to have a capital structure that allows us to maintain our service levels, to protect the job security of our employees.

And hopefully at the end of the downturn, we end up with a bigger market share, which is exactly what happened to us.

But in order to do that, you have to have a strong capital structure.

When the government interferes with the viability enterprise, they take that ability for us to protect our employees away from us!

A dangerous thing to do from any perspective.

Thank you for your answers.

Appreciate it.

Ladies and gentlemen, we have run out of allotted time for our Q&A session today.

I will hand the program back over to Mr. Wynn for any closing remarks.

Matt, Steve Cootey, Ian Coughlan, Mr. Aziz, Mr. Wooden, would you like to add anything?

No, you said it all, Steve.

Okay.

Well, I don't know that this has been the most satisfying quarterly phone call we've ever had, but at least it's the most candid and the most honest one that we could possibly give everybody that is interested in our Company.

And hopefully it sheds light -- it sheds real intelligence and insight on the inevitability of anything that interferes with the long-term health of Macau -- or Las Vegas, for that matter.

And I've done my best to shine the light on that subject.

I thank you all for your attention.

And we'll see what happens 90 days from now.

Bye-bye.

Ladies and gentlemen, this does conclude today's third-quarter 2015 earnings call.

You may now disconnect your lines and have a wonderful afternoon.