The recent exit of former Chief Executive Officer Steve Wynn from his own company Wynn Resorts caused a rapid wave of reactions and consequent moves of other gambling operators in the field. It has been officially confirmed that the Galaxy Entertainment’s decision to purchase 5.3 million primary shares in the company does not go against the laws of Macau.
In a statement last week it was reported that Macau’s gaming regulator has expressed its position regarding the acquisition and it is considered legal by all means. It could be recalled that in an unexpected turn of events Macau-operating gaming concessionaire Galaxy Entertainment Group Ltd. announced that it has purchased shares in Wynn Resort which is also the parent company of Wynn Macau Ltd. The latter oversees the management of Wynn Macau Hotel and Casino. Even though this gives the competing Galaxy a 4.9-percent stake in Wynn Resorts, the deal does not breach laws.
What concerned the Gaming Inspection and Coordination Bureau was a local law which says that neither a Macau gaming concessionaire nor any Macau gaming concessionaire’s shareholder with a stake of 5 percent or more in that business, has the right to control a stake of 5 percent or more in any other local gaming concessionaire. Sanford C. Bernstein & Co analysis claims that this move would have a significant impact in the long run, as it opens the door for a potential purchase of Wynn Macau by Galaxy in the future.
Galaxy’s Plans for Gambling Development
The ownership of shares is going to make it easier for the company to make a move and acquire Wynn, thus resulting in a considerable presence in the gambling field of Macau. With its move, Galaxy became one of the major shareholders in the company and this comes with a certain amount of influence.
It has also resulted in an increase of the company’s stability, as the controversy surrounding its former CEO begins to subside. With the new leadership in the face of newly-appointed Chief Executive Officer Matt Maddox in addition to the strong presence of Galaxy are certain to bring a breath of fresh air and balance to the brand. With his decision to sell his entire stake in the company he founded, Mr. Wynn allows it to continue its operation without being linked to him. This is also expected to make the process of rebidding for Macau gambling license in 2020 an easier process.
In the meantime, it was also confirmed that the Nevada Gaming Control Board is going to look into Galaxy’s decision to acquire a considerable number of shares in Wynn Resorts which is based in Las Vegas. According to the law regulating the industry, shareholders owning more than 10 percent of a given gambling business are subject to suitability requirements. Those who have more than five percent, however, are reported to the Control Board. Even though the stake purchased by Galaxy amounts to only 4.9 percent of the company, it will still be an object of scrutiny by the regulator.