Wynn Resorts CEO Considers Selling Wynn Boston Harbor Casino

Wynn Boston Harbor Sale

Wynn Resorts defeated Mohegan Sun and Caesars Entertainment in the licensing process.

Wynn Resorts CEO Matt Maddox is considering whether to sale the Wynn Boston Harbor. The $2.4 billion integrated casino-resort in Everett, Massachusetts is planned to open in 2019.

The casino company said in January 2018 that it had incurred $1.13 billion in costs so far in the construction project. Wynn Resorts won a license against rivals such as Caesars Entertainment and Mohegan Sun/Suffolk Downs.

As the only casino ever licensed for the Boston area, the Wynn Boston Harbor would be a lucrative business operation for any casino company which owned it. At a cost of $2.4 billion, it would be tremendously expensive, too. Wynn’s bids are on the Boston-area casino were significantly higher than the bids by Caesars or Mohegan Sun.

Massachusetts Gaming Commission Probe

The Steve Wynn harassment allegations are under investigation by the Massachusetts Gaming Commission. The probe puts the Wynn Boston Harbor’s future under a cloud, just as Steve Wynn’s controversial history continues to hang over the company in general.

Wynn Resorts faces investigations in Nevada, Massachusetts, and Macau. The conclusions regulators in Nevada and Macau form will be much more pivotal to the Las Vegas Strip casino company’s future, so ridding itself of one regulatory headache is a consideration.

Reasons for Wynn Boston Harbor Sale

Macau and Massachusetts officials have agreed to share information in their probes. If Wynn Resorts sold its share of the Wynn Boston Harbor, it would mean the end to the Massachusetts part of the investigation. In turn, that might help the company avoid undue scrutiny of its American business operations by Macau regulators.

The question would be: who might buy the Wynn Boston Harbor? Here are a few possibilities, starting with the companies which sought a Boston-area license.

Mohegan Sun to Buy Everett Casino?

Mohegan Sun is owned by the Mohegan Tribe, the Connecticut Native American gaming authority. Mohegan Sun once was the largest casino in terms of size in the world. The casino was a multi-billion dollar draw, because it sat between Boston and New York City and had little competition besides Foxwoods.

Mohegan Sun operates the Pocono casino in Pennsylvania and manages Resorts Casino in Atlantic City. It has a large player database, including many Massachusetts gamblers. The Mohegan Sun/Suffolk Downs bid got into the final two, so it impressed Massachusetts regulators enough to beat Caesars’s bid.

The problem with Mohegan Sun is it also is upside down on its debt situation, with over $2 billion in debt and a poorly-located main casino in the current fragmented casino marketplace. Whether Mohegan Sun could make the $2.4 billion investment in Wynn Boston Harbor is questionable, given it could not compete 2 to 3 years ago at a smaller price. If it took on a partner, though, maybe.

Caesars Entertainment: A Boston Casino?

Caesars Entertainment lost on the first round of bidding for a Boston casino. At the time, Caesars was facing $23 billion in debt and many financial analysts thought the company would have to enter bankruptcy. No wonder Caesars did not make the final two.

Since then, the CEOC reorganization plan allowed Caesars Entertainment’s parent company to avoid bankruptcy. The CEOC division’s bankruptcy is behind it, so Caesars under Mark Frissora is better-placed to make a big push on a number of fronts: Japan, South Korea, and perhaps Massachusetts.

Of course, Caesars sued Stephen Crosby, the chairman of the Massachusetts Gaming Commission, accusing him of bias in his choice of Wynn Resorts over Caesars. That caused Crosby a media black eye and an ethics probe, so Caesars Entertainmment (under Gary Loveman) might have poisoned the well in Boston.

MGM Resorts to Buy Wynn Boston Harbor?

MGM Resorts is reported to be interested in a full buyout of Wynn Resorts. As another of the Big Four Vegas Strip casino companies, MGM Resorts would have the capital and the know-how for such an acquisition. It would be a huge endeavor, though, so it is always hard to gauge whether a company like MGM Resorts can pull off a $18 billion to $20 billion buyout.

The purchase of the Wynn Boston Harbor might make more sense. To MGM Resorts, it would be a more limited commitment. Last year, MGM tried to buy the Bethlehem Sands from the Las Vegas Sands Corporation in a $1 billion acquisition. MGM Resorts seems interested in building an east coast network of casinos, alongside MGM National Harbor in Maryland and Borgata in Atlantic City.

If so, approval by the Massachusetts Gaming Commission would be a formality. MGM Resorts soon will be opening MGM Springfield in Western Massachusetts, so the approval process is done already. Whether it would make sense for MGM Resorts to buy the Boston casino alongside the Springfield casino is another matter.