Wynn Resorts Ltd. (WYNN) has crossed a big hurdle in its way to build a $1.6 billion resort casino on the Everett waterfront. Recently, this leading casino operator completed the acquisition of 33 acres of waterfront land (situated on the Mystic River in Everett) for $35 million where it intends to build the resort. The acquisition of this site formerly known as the Monsanto chemical plant site gives the company full control over the property, thereby allowing it to execute its long-awaited Massachusetts casino plan.
The construction of this resort will transform a less used industrial site into a resort. Besides, it will give the public access to the Mystic River waterfront, employ a number of people and contribute millions in tax revenues.
However, the journey to reach here was not easy and was full of controversies. Initially, the company received approval to build the casino resort on the land in Sep 2014 ahead of its rival Mohegan Sun. Connecticut-based Mohegan Sun had proposed a $1.1 billion casino at the Suffolk Downs horse racing track in Revere. However, the Massachusetts Gaming Commission voted in favor of Wynn Resorts’ plan to turn the former chemical plant site into a casino resort after Wynn Resorts made a number of significant additions to the plan, including re-designing its 27-story hotel tower and spending more toward plans to regulate traffic through Sullivan Square in Boston.
Despite winning the lucrative casino license, problems for Wynn Resorts persisted. Officials at Somerville, MA filed a lawsuit in December requesting the state court judge to invalidate the license. The filing stated that a convicted felon had a financial interest in the land deal and thus regulators should have disqualified the company for license or at least should have abandoned its proposed site. Meanwhile, Wynn Resorts officials stated that the company had no knowledge of the alleged hidden ownership.
Massachusetts legislators were reportedly authorized in 2011 to grant licenses for three regional resort casinos and one slot parlor. This is the second regional resort casino license the commission has issued. Earlier, MGM Resorts International (MGM) won the license for a casino in Springfield in the western region. Penn National Gaming Corp. (PENN) is building the slot parlor in Plainville. Discussions are on to select a licensee for the third casino in the southeastern region of Massachusetts.
However, reportedly, among all these, the most valuable of the state’s casino licenses is the Greater Boston license, which Wynn has won. This region is estimated to deliver worth almost $800 million annually in gaming revenues. We believe this would help Wynn Resorts to offset the sluggishness in its other major operating region, Macau.
Wynn currently carries a Zacks Rank #3 (Hold). Isle of Capri Casinos, Inc. (ISLE) is a better- ranked stock in the same industry sporting a Zacks Rank #1 (Strong Buy).
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