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Casino developer returns to Las Vegas

Steve Wynn, the designer of some of the most famous hotel-casinos ever built, is back in Las Vegas and ready to unveil his newest creation: The $2.7 billion Wynn Resort.
The new Wynn Resort will be unveiled to the public on April 28.Joe Cavaretta / AP
/ Source: The Associated Press

Steve Wynn has designed some of the most famous hotel-casinos ever built. The billionaire's brainchildren — The Mirage, Treasure Island and Bellagio — ushered in new chapters in this city's over-the-top history.

Wynn is gambling once more April 28, with the opening of the $2.7 billion Wynn Las Vegas, his triumphant return to the Las Vegas Strip. The supremely confident Wynn, 63, is wagering his reputation on Wynn Las Vegas and the adjacent Encore, a $1.4 billion hotel-casino scheduled to open in 2008.

But the high-end market he once dominated has changed since he lost control of Mirage Resorts and sold it to MGM billionaire Kirk Kerkorian in 2000. MGM Mirage Inc., which now runs the palaces he built, will control the majority of the hotel rooms on the Strip once it completes its merger with Mandalay Resort Group later this month. And Wynn's new hotels will put him in direct competition with Las Vegas Sands Corp., parent of the Venetian megaresort and the 3,000-room Palazzo, which will open across from Wynn Las Vegas in 2007.

To win the hearts and dollars of tourists and overcome these hurdles, Wynn has spared little expense. By comparison, the Bellagio cost about $1.6 billion when it opened in 1998.

"I think people are going to be very surprised," Wynn said during a Nevada Gaming Commission meeting in which he received a license to run the casino.

While waiting for the hotel to open, Wynn's company, Wynn Resorts Ltd., has yet to generate a profit. The company reported a loss of $205.6 million in its 2004 annual report. But many investors are betting he hits the jackpot again.

"All of his past projects have been extremely successful," Deutsche Bank gambling analyst Marc Falcone said. "I think he deserves that respect."

The opening of Wynn's Mirage in 1989 is widely held as the start of the latest Las Vegas building boom. Five years after losing Mirage Resorts, the temptation to top himself and construct something even more spectacular proved irresistible.

Wynn Resorts has seen its stock price soar since its initial public offering of $13 in 2002, reaching a high of more than $76 this year. The stock has since tumbled to about $55 after an analyst downgraded it, saying Wynn's balance sheet was nearly exhausted. Wynn is also building a $700 million casino in Macau and is bidding on one in Singapore.

Falcone, whose investment bank was the IPO's lead underwriter, said the stock's value is justified, and Wynn thinks people will agree once they glimpse the 2,700-room hotel-casino.

But to know how much is hyperbole, visitors must wait until the official opening. Wynn made publication deals with Vanity Fair and Time magazine that bar other reporters from touring the building and caused him to decline an interview.

Wynn Las Vegas is obscured by a giant mountain of evergreens. Curiosity to see what's behind that forest could drive people inside. One aspect that can't be hidden is the eye-catching exterior, 50 stories and 613 feet above the northern end of the Strip. It sits on 217 prime acres and includes an 18-hole golf course.

People who have toured the property say it's themeless, unlike his past projects that were all about motifs and sidewalk shows. Like the Bellagio, dining will be a major draw, and Wynn has hired a gaggle of talented chefs. Entertainment includes a water-themed production and a version of the Broadway hit "Avenue Q" opening in September. Wynn also has landed upscale shops including a Ferrari-Maserati dealership.

The company is betting the attractions will siphon guests from luxury hotels such as Bellagio, The Mirage and the Sands' Venetian.

His competitors counter they've prepared.

MGM Mirage added a $375 million, 928-room luxury tower to the Bellagio. Caesars Palace has undergone a dramatic transformation. The Venetian has bolstered efforts with a fancy gambling salon and suites to retain its Asian highrollers, among the wealthy gamblers Wynn covets.

"I'm not sure how much of a dogfight it will be, but that is where the biggest competitive threat looms," Falcone said.

MGM Mirage Chairman Terry Lanni said in an interview that his company has the upper hand in this business battle. He expects some cannibalization of players but thinks Wynn's gains will be short term.

Lanni said Wynn knows how to build casinos, but MGM Mirage knows how to operate them.

"I've always thought we've had a deeper level of management," he said.

Local tourism officials see winners all around. Wynn Las Vegas will give Las Vegas a jolt it hasn't seen in years, they predict. The demand to see the new property should create overflow, causing hotels to fill up and room rates to swell. One gambling analyst estimates Wynn is expected to lure another million people in 2005 to the Strip.

This should enrich an already prosperous city where gambling companies post continuous record quarters and visitation levels reach new highs.

"Everyone gains," Lanni said. "It's truly a rising tide which he will cause that will help all ships."