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Height Sees Little Risk To Wynn Licenses

Height Sees Little Risk To Wynn Licenses

Wynn Resorts, Limited (NASDAQ: WYNN) shareholders have had a rough go of it in recent weeks after CEO Steve Wynn was forced to resign in the wake of sexual misconduct allegations.

But while Wynn shareholders are still reeling from the leadership change, Height Securities analyst Stefanie Miller said Thursday that Steve Wynn’s actions have likely not put the company at risk of regulatory action in either of its two largest global markets.

According to Miller, if Steve Wynn had stayed on as CEO, regulators would have felt pressure to penalize the company by potentially revoking its gambling licenses. Miller said Wynn’s Macau license, which is up for renewal in 2022, is the biggest risk at the moment, but it appears the Macau Gaming Inspection and Coordination Bureau isn't particularly concerned with Steve Wynn’s behavior.

“Regarding the Wynn Macau license renewal set for 2022, the lack of process in place around this jurisdiction’s new regulatory regime appears to create the largest risk for WYNN,” Miller said in a note.

Miller also said Nevada regulators face major political pressure to preserve Wynn’s Las Vegas license.

“While we expect the Nevada Gaming Control Board will feel compelled to take action against WYNN in response to recent news and events, like in Massachusetts, we believe Nevada regulators are politically motivated to issue a fine rather than revoke existing licenses for a business that drives meaningful revenues to the community in Nevada,” Miller wrote.

Wynn stock took a big hit following the allegations against Steve Wynn, but the stock remains up more than 70 percent in the pastier on strong growth in the Macau market.

Related Links:

Susquehanna Upgrades Wynn Resorts Following CEO Departure: 'A Compelling Risk-Reward'

Morgan Stanley: Our Bullish Wynn Resorts Thesis No Longer Applies

Image credit: Ken Lund, Flickr

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