Wynn Resorts, Limited (WYNN) Q3 2011 Earnings Report, Transcript and Summary

Good afternoon, and welcome to the Wynn Resorts Third Quarter 2011 Earnings Call. Joining the call on behalf of the company today are Steve Wynn; Marc Schorr; John Strzemp; Matt Maddox; Marilyn Spiegel; Scott Peterson; and on the phone, Ian Coughlan, President of Wynn Macau; and Robert Gansmo, CFO of Wynn Macau. [Operator Instructions] I would now like to turn the call over to Mr. Maddox. Please go ahead, sir.

Thank you, and thank you for joining us today. Before we get started, I just need to remind everybody, we will be making forward-looking statements under the Safe Harbor of federal securities laws, and those statements may or may not come true. With that, I'm going to go ahead and turn it over to Steve Wynn for some opening comments.

Well, I think the numbers speak for themselves. The only comment that I would make is that we had a lower hold percentage in Las Vegas. If we normalize it, it would take us up over 100 instead of maybe 5. And things get back to normal in October, which is a sort of a landmark month for us in both markets. Business seems terrific. I know that everybody is studying market shares since Galaxy opened, and my comment is the same as it's been in the past. It isn't so much about market share, which, in our case, depending on hold percentage, goes between 13% and 14% if you normalize hold percentage, but our bottom line keeps climbing. And about the dividend, we are doing our budgeting on the work that's going to unfold in the next few years in Macau, and we have alternative investments. And you can count on the $0.50 a quarter dividend, but I think special dividends are, in fact, special, and there is no certainty about what the board will decide to do about that going forward. I think we can take questions.

[Operator Instructions] Your first question comes from Joe Greff of JPMorgan. Joseph Greff - JP Morgan Chase & Co, Research Division: Obviously, a big topic for investors is whether or not tightening of liquidity in mainland China is going to have an impact on the Macau market VIP segment. And I know it was very early, but maybe I'll leave it sort of open-ended. But maybe with respect to credit, if you can tell us what you're seeing thus far either on the direct side or the junket operator side or in terms of repayment lengthening, are you changing anything with respect to reserving? I know you are likely very conservative with respect to reserving, but if you can sort of answer those topics, I'm sure investors would love to hear that.

Okay. Joe, first of all, we don't, at the present time, see any change. That's the answer to the first part of the question. Second part of your question was I acknowledge the fact we are conservative, and we were -- we've never had to increase our reserve because in the 40-odd years I've been doing this, we've never had a special charge because our reserves were inadequate. And if that were to happen, it would be the first time in 43 years. So I think that's about all there is to say on that subject. As you and other investment community professionals are keeping an eye on China and the American economy, so are we. And you view these things with varying degrees of optimism in China and pessimism in America. Joseph Greff - JP Morgan Chase & Co, Research Division: Okay. Great. And then maybe these are questions for Matt, quick ones. With respect to potential project financing on Cotai, and, Matt, how are you thinking about the timing of that? And then if you can maybe help us understand the breakout of cash on the parent's balance sheet between Las Vegas and Macau?

Sure. So of the $1.8 billion, it's about $1.1 billion offshore and $700 million onshore,at this point in time. And in terms of financing, we have an excess cash in Macau, more cash than debt. And so we will go through a very typical investment-grade style bank financing probably sometime next year to finance Cotai, and it will be a combination of cash flow and bank debt.

Your next question comes from Carlo Santarelli of Deutsche Bank.

If you guys wouldn't mind commenting, maybe, on some of the trends you're seeing more recently in October both in Macau and Las Vegas, I think that would be helpful for everyone.

Well, October is gangbusters. We always tell you about the month when we're doing it. And were they 17 days down, Marc?

Yes.

We've got 17 days.

I have 18 days in Macau. 18 days in Macau and $73 million.

Yes, 18 days, $73 million, how does that sound?

That sounds very good.

Okay. And in Las Vegas, it's just close to $1.5 million a day or something like that, $1.25 million. For the year, we are operating about $1.25 million a day. Our best year was $420 million, and we got a shot at $450 million here in Las Vegas, which sounds good -- great. And that means that instead of losing $200 million or $300 million, including depreciation, we'll lose less. But we've got a ways to go before we start reporting real taxable profits in Las Vegas. We have lived through '09 and '10, and this much of '11 with 3 quarters of $1 billion in operating losses. I mean, in losses, including depreciation. And I know that we don't use all of our depreciation by any means in any given year. But in this business, we really do ultimately use the number. On the current period, it may be 1/3 of $240 million in Las Vegas. But eventually, it catches up with itself. And we don't have a lot of interest, as you know, because we've got very fancy balance sheet. Both of our bonds and our debt, although they are nonrecourse in the People's Republic of China and Macau and in Las Vegas, as you all know, our debt in both companies is investment-grade. So we like being in that position to take advantage of future opportunities, and we protect that status jealously.

Your next question comes from Shaun Kelley of Bank of America Merrill Lynch.

Just to follow up on October a little bit more. Steve, I think you said that you see competitive environment and the market shares were relatively stable, but I wanted to dig in a little bit because we have heard a little bit about, particularly a couple of your competitors trying to move around some market share, maybe getting a little bit more aggressive on the junket side, just have you seen that activity? And kind of how are you thinking about the promotional environment in Macau right now?

Well, it always happens when a new place opens up. They get very aggressive to try and dig in. We get a little migration for a few months, and then it comes back. And it has and it is. And the things that put us in the position we're in, in the first place have not changed. You can't buy business in Macau, nor can you buy business in Las Vegas, Pennsylvania or anywhere else. Most casino companies that are managed professionally and well are dispensing promotional allowances at a level that is pretty much maximum, or as much as they can dispense consistent with prudent long-term management of the enterprise. So that means that it stops anybody who's mature and intelligent from coming in and redefining such things. It can't to be done, not intelligently and not without being self-destructive on different levels of service levels and other things. So we give and share our revenue with our customers at a level that is consistent with our service levels and the security of our employees. Now if, every once in a while, you get a new executive with his head up his butt and says, "Aha, we can do this or we can do that," they get over it or they get replaced. We feel secure in our position in Macau. Take a look at Macau, you can look at anybody's profit after interest and depreciation. And our thousand rooms makes more money than anybody, even if they have more hotels.

That's helpful. And then I think I just wanted to maybe switch topics real quickly and get your thoughts on -- domestically, there are some really interesting opportunities that have started to kind of boil up all of a sudden in probably Massachusetts which seems like it's virtually a done deal, and then also in Florida which is probably a little further out. But your thoughts about domestic expansion, given kind of the investment environment in the United States today, and how you weigh that against the kind of money that you're probably very committed to spending in Cotai when it comes available to you?

Well, you're right. There are some very pregnant opportunities that are presenting themselves in Massachusetts and Florida. Neither jurisdiction has made a final decision that we can measure quantitatively in order to make a determination for ourselves. But those are very interesting markets. And when we sit here in Las Vegas and look at these things, we ask a couple of questions. First of all, what is the deal that, that state has put on the table? How strong is the invitation? How serious are they? Are they motivated strictly by tax revenues or by employment or a balance of the two? Do they want capital investment and long-term growth and job security for their employees? Or is this a quick down and dirty, how much can we grab? Those jurisdictions usually have a dim future. But I'm sensing that Florida, for example, and Massachusetts are acting in a more stable way. I remember once in Illinois, they had a meeting and changed tax rate overnight by 15% to 20%. That wouldn't even happen in China. I mean, that is really rough, but they had 10 riverboats and they didn't care. In Massachusetts and Florida, I'm sensing a much more serious and mature political approach, and long-term economic growth approach to jobs, as well as the construction and all the rest. And so we're looking at it. The second thing that we look at, besides the invitation that the jurisdiction puts on the table is, does our brand fit? Can we really be value-added to Massachusetts or Florida? And can we be value-added to our shareholders? Those are not always the same thing. It's the reason why we're not in the riverboat business. It's not consistent with what we do best. I'm feeling very positive, in a very preliminary way, about Massachusetts and Florida. I think those jurisdictions have potentially a great deal of promise, and we will look at them seriously, as we have been for the last several months. And hopefully, there will be a business opportunity there, in which case we'll step up and put our credentials on the table and try and satisfy the political leaders and other decision-makers there. I hope that answer is helpful.

Your next question comes from Mark Strawn of Morgan Stanley.

One quick question on Las Vegas. Have you guys seen any changes to the base of -- I'm sorry, the pace of leisure and group demand in Vegas at all, as you look ahead?

Marilyn? Marilyn Spiegel will answer that [ph], because she runs the show here.

So between leisure and transit demands, you say?

Just more leisure broadly, leisure as a whole and group as a whole.

Well, leisure has been pretty stable for us. We've seen big improvement in ADR for the leisure markets. So actually, in the third quarter, we saw a 21% improvement in our leisure ADR. And when you think about convention, we had another great quarter in convention. So we booked strongly, and we are strong again in the fourth quarter and ADR is up in convention also.

You haven't seen any disruption to that booking pacing on the group side where you have a little more visibility?

First quarter is still coming in, we think we'll be similar to last year. January is pretty close, and the financial market sometimes, the CNBC and analysts can cause some shaky consumer confidence. And so that impacts us. We've seen people who are waiting for their 2012 budgets to be approved, and so they haven't committed to January. March for us in Las Vegas is a challenge because con and ConExpo [ph] is not going to be here this year. It's on a rotation, and so we have a hole. So with less compression in the market, we may see the same or a slight decline in ADR in convention rooms for the first quarter. But for the year we project a pretty stable amount as we've seen this year.

Your next question comes from Harry Curtis of Nomura.

Steve, back in, really, up to the late '90s, if you built something really inspired in Vegas, demand in Vegas increased more than the supply. And I'm wondering if you still think that's the case in Macau, and how long this runway is, where if you build an inspired property that demand is going to exceed capacity growth?

Matt, you want to answer that?

His question was: Will Macau -- will continuing to play in Macau generate more demand? And, Harry, our opinion is, I think Macau is probably in the third or fourth inning of development. And if you look at what's going on in Cotai, there's continued to be excess demand for the current supply. In fact, if you try to book a room at Wynn Macau on any weekend between now and the end of the year, it would be almost impossible. So if you look at it today, I think this era could easily support a Wynn Cotai property. And 5 years from now, we think that the market has continued growth underneath it.

Sheldon probably will come online in '12.

Yes.

With those 2 new hotels. They have some casino space. They're not enormous, but is an additional capacity for our tables and slot machines, as well as rooms.

And the retail.

And the retail as well. Our retail business in Macau, we've got 40 -- I'd say $45 million revenue, right, when you look at our reports. So that's $30 million worth of profits. We've got $120 million [indiscernible] and 60,000 [indiscernible]. Our retail business is high-end. We've got these very [indiscernible] it's going to be $120 million in EBITDA additions. This is [ph] quite phenomenal, the desire for good life. Folks of the People's Republic of China are demonstrating they go on vacation and they love to shop.

So, Steve, if you parse the depth of the markets between the mass side and the VIP side, how close are you to the early innings in each of those markets?

A good question, you and Marc, and I know that's your point of your subjects.

Steve...

Is Ian on the call?

Yes, Ian is on the call.

Ian?

Yes, Steve?

What's your take on that question?

I mean, we can only look at history every time a new resort has opened in Macau it's been fully absorbed, and visitor arrivals continue to grow quarter-to-quarter. There's plenty of business out there in all aspects of the market. Every single source of business we have is strong, so we're not concerned about that at all.

And one thing is, Macau, while it says 25 million visitors or so, that's really probably 4 million or 5 million unique visitors coming multiple times a year. So if you think about where the growth of the market could go with new unique visitors, that's why we think Macau, with all the infrastructure improvement, could continue to grow pretty quickly.

It's probably 1% or less of the upscale citizens in the RC. There are 300 million -- 0.5 billion [ph] to 300 million people that are enjoying what we would call a middle class or better standard of living in China -- we're way less than 1%.

Your next question comes from Robin Farley of UBS.

I'm just curious on your comments about the special dividend, and maybe you're keeping your powder dry until final Cotai approval or until your project financing is done next year? Or is there -- you're keeping your powder dry for something else?

I think the comments I made about the dividend stand as I said them, Robin. I don't think there's much point repeating it. I'm not evading your question, but I think I covered the ground. There've been a number of reasons why Cotai, other opportunities that the board considers -- special dividends is special. And I don't think that we should take it for granted that there are going to be any, nor should we take it for granted that there won't be any. It's a changing, fluid situation.

Okay. And then just if we could return just for a moment to the issue of credit in the VIP market in Macau. So not a question at all of you not being reserved enough or anything about collectibility, but I'm just wondering if you're seeing anything just anecdotally out there, just with credit, with collectibility just being out there for more days and maybe people asking for more days than they normally have in terms of repayment, just anything along those lines?

Yes, I understand the question completely, Robin. And the answer is in a word? No. If it were to change, it would be, I think, irrelevant, inappropriate discussion to have on a call like this. But the answer has to be no at this time. And we consider the question very seriously, so there's not much point in skirting the issue or shilly-shallying on something like this, but we don't see it now.

Your next question comes from Janet Brashear of Sanford C. Bernstein. Janet Brashear - Sanford C. Bernstein & Co., LLC., Research Division: A quick question about the -- a follow-up to the Miami business opportunity. As Florida looks at new integrated resorts, and they're talking about a $2 billion minimum investment, is your view that the market's deep enough for 3 new concessions? Or is that too many from a return perspective?

Well, that's a very good question. Florida has always been one of the places in the world that was most perfectly suited, South Florida, Miami, to -- and Miami Beach, to becoming a vastly expanded destination resort, not just for Latin America, but for Europeans, for Eastern Coast Americans, and for people from Texas and all over the United States. Florida, its climate, its ancillary offerings of beaches and restaurants and shopping. Miami is a fabulous place, and if it were done right, in my opinion, Miami would take off and become one of the 2 or 3 greatest destination resort cities in the world. I remember, as a young man, going to college in Philadelphia and my parents moved to Miami Beach, and we lived on Pinetree Drive, and my folks had a cabana at the Fontainebleau in the '50s and early '60s before my dad died. And everybody came to the Fontainebleau from all over the world. It wasn't just New Yorkers, it was everybody. The hotel redefined destination luxury and fun, the greatest entertainers, the wealthiest people, the greatest shopping all took place between the Fontainebleau and the Eden Rock and the Americana hotels. The destination was created because of the development, not in spite of it. Now I had a conversation with my neighbor, Sheldon Adelson, who was a little bit more conservative in his view, but I think both of us agree that Miami has the opportunity of becoming something quite extraordinary. It won't happen with racinos, that doesn't even get on the radar. It's a false start, and it's been a false start everywhere that they've tried it. It's regressive, it's homely, it may make a buck or two for the operators, but it does nothing, really, for the local economy jobs. If they solve the tax rate, it generates a few bucks for the government, the fiction that it helps the horsemen is exactly that, a complete fiction, and that's been proven over and over again. But the existence of large employment-based destination resorts has the capacity to change the economies of the communities in which they exist on several levels, primarily by the huge payrolls of such places, they hit the economies like a freight train. And secondly, by the people that it brings from outside the region into the region. So I am on a macroeconomic level highly positive about the implementation of large destination resorts in Miami and Miami Beach. However, that comes down politically. It's very, very important that the government decide to do it intelligently, and they have numerous case studies to examine. Mississippi, where the tax rate was low, to encourage big capital investment; Las Vegas; and Florida has everything going for it. Massachusetts has the population base. Both places would be great. On the other hand, in New York City, it was a racino at Aqueduct, altogether different story. In my view, it produces an entirely different result. So that's the basis of -- but the core question is, can they support 3 of them? If they're done well, if they're positioned properly, if they're managed intelligently, absolutely. It could become a $2 billion or $3 billion market, Matt?

I think, yes, that's about right.

Maybe more over time?

Yes. Janet Brashear - Sanford C. Bernstein & Co., LLC., Research Division: Can I follow up on a questions with Ian for Macau as well? And that is, as demand continues to grow, is the capacity at your resort becoming a constraint now? And how much can you continue to improve your yields from here?

That's a Marc Schorr question.

We're pretty -- it's pretty constrained right now. I mean, we're at the maximum table limits right at this moment, so now it's just getting the best customer into the facility.

Is Linda on the call? Not, but Ian is. Ian, what's your take on that question?

I think we're fully formed after ramping up Encore. There is still opportunity to increase business, as Marc said, optimizing our products and game mix. Looking at our table and slot yields, we continue to be very active in making sure every table is yielding as much as it can. We manage table limits very effectively. And there are still opportunities for growth during the week, and at certain times on the weekend. So we are building a bigger customer base, our players are coming and playing longer, so there's still room for growth. We're also looking to hold on to operations, and we continue to tweak where we can.

Our yield, I think, were up 47%.

Look, let me put it to you this way. I'll read you a number. Here's an up-to-the-minute year-to-date in Macau. $956 million. Last year, $651 million, an increase of $304 million or 46.7% in EBITDA. What does that sound like to you? I mean, there you are, you're looking at the same thing I'm looking at, right through yesterday. So I don't know what the rest of the month will look like, and we'll discuss that in great detail when we review the fourth quarter. But I look at these numbers every morning when I wake up, I get them before 7:30, and that's what I'm looking at. And that's in spite of the competition. If I look at the month...

With competition you're up 30%.

Yes. And even for the month, we're up 30%, another $17 million, and that's with a -- on $73 million this month, so we are headed for another one of those $100-plus-million months, and that's all I have to say.

Your next question comes from David Katz of Jefferies & Company. David B. Katz - Jefferies & Company, Inc., Research Division: I wanted to just ask about the Cotai development project. We've certainly read the announcements that you've put out, and I think Steve commented earlier about expecting to start to spend a little bit. And there certainly has been some commentary gathered in the press, which can add to some confusion about what the next steps are in the process for moving this project forward. Can you talk about, a, the amount of spending that we should reasonably expect the next year or two; and to the degree that you can arm us for what next steps along the way in this project we should look out for, I hope that would be helpful.

The government issues a draft contract, you approve it, discuss it, and then you sign it. We've done that. That's usually associated with the final stages of the choreography in Macau. And they set a premium, they did that. You then wait for its publication in the Gazette. At that point, the land process, the land concession grant is completed, and during this process, you're free to -- you're encouraged, as we have already done, to submit your plans, and we've done that. So you get very far down the line, but you have to always be mindful that the government of Macau follows a very set procedure. They do not vary, and you don't get to rush it or change it. You live with it and respect that process, and it moves along at the speed that they think is appropriate. And then you respond, and we are encouraged that we're part of that choreography, we're part of that schedule and the march to completion. All that's taken into account, and, really, there's little more to say to that, except that when the Gazette publication takes place, and you're ready to hit the ground with actual foundation breadth of work. Hopefully, you will have been approved for your foundation drawings. There's a great deal of work that does -- that takes place on a subterranean basis in a landfill. I remember studying a chart 2 months ago with my colleagues that showed, for example, if you're interested in this, the high-rise has columns on 36-foot centers and there are 40 of them. There are 40 structural bays that are used for suites and rooms. A regular bay is 2 rooms, and sometimes 2 structural bays are used for super deluxe suites. The building is 98 feet wide. It's extremely deep because the rooms are 45 feet deep with an 8-foot hallway, which is -- you only see 8-foot hallways in villas. Well in Cotai, our typical hallway is 8-foot wide and 11-foot tall. So what happens is that we have 40 columns, 40 structural bays and we have 4 of them across the building. There's one on each outside window and 2 on the interior. So that's 160 major columns that support a high-rise. Those things are caissons. Those are 10 -- 8- to 12-foot holes that go down until they get 6 feet into rock, on which there are -- on top of which there are caps that we rest the columns of the heavy hotel. Those 160 caissons alone, I looked at a chart that shows how deep they go to get through the fill of the land and into the -- 6 feet into rock, and in some cases, we're as deep as 92 meters and as little as 78 meters. You can imagine the work. And then you have the rest of the public area that involves 15, 20, 25 acres. And those -- the rest of that podium building, which is 3 or 4 stories tall that houses the casino, restaurants, VIP rooms, showrooms, spa, swimming pools, villas, and all the rest, garage, those things rest on pile caps. Pilings are nails or spikes that go down as far as I just described in clusters of 6 to 8, like if you put your fingers on the table and the top of your hand was the cap, and you rest the columns that support the steel columns, that support the public area on those pile caps. So between caissons and pile caps, you've got 10 months or a year of work. Now that's exactly the way Wynn and Encore were built, and all the other hotels that you're familiar with that belong to our associates and other companies. But subterranean work in Macau is quite a bit different than, for example, building in New York City where the entire island of Manhattan rests on solid granite. And you can erect huge skyscrapers with a mat foundation, not so on landfills. So when you take that into account, you spend a lot of money on foundations. Once you get out of the ground and you're up at grade level, then the buildings are pretty much traditional and they go very fast, a floor a weak, stuff like that. Is that too much information for you? David B. Katz - Jefferies & Company, Inc., Research Division: No. I mean all interesting. I guess if I may follow it up, by asking from -- if you can recall last time, from the time you signed your agreement with the government as you have now, until the time it appeared in the Gazette, how long was that period of time? And then I did want to get a sense for how much spending CapEx on this project there might be this year or next as well?

Well, it's a very interesting question, and it changes from time to time. When we first started, Macau was -- the profile of Macau is a community -- both public works and private works was in one shape. And today, as that city, as that special administrative region has matured and grown, and the needs of its citizens and its businesses have increased, the load on the public works department to process properly such applications, building permits and the like, has become geometrically greater, exponentially greater. So the lead times have quite understandably extended. And so comparing it to the past, I don't think is relevant any more. I meet with Secretary Lao, under whose authority such matters are prosecuted, and he shares with me the amount of public works. There's a light rail, a monorail system going in. But incidentally, we're the first stop from the ferry terminal. That monorail circles 2 sides of our property, which is very nice for us. And it circles 2 sides of our hotel on The Peninsula, the Encore and Wynn, and has a stop right at our door. These kinds of projects now are new, and it placed a terrific load on the government's staff. They rise and grow to meet that demand as best they can, but it's definitely created more traffic in public works and the building department. So -- and you know I? They don't share with me the detail of such loads, only a general description. And I know it to be true, so I can't answer your question definitively. But I will tell you this, with regard to the last part of your question, it's possible on foundations to spend hundreds of millions of dollars.

Your next question comes from Dennis Forst of KeyBanc.

First, I wanted to ask Matt about corporate expense. It was about $10 million above the recent trend line. What was in there, Matt, this quarter that moved the needle?

What happens is, if you look at our corporate expense every year, it's very choppy, so one quarter will be up more than the other, and it's usually just various development projects we're working on and other initiatives. Where we're pacing to for the year is similar to last year, so I think that's the way you should think about it.

Okay. And then the next question had to do with promotional allowances. I've seen promotional allowances be very steady as a percentage of casino win, although the second quarter, not the third quarter you just reported, but the second quarter was well below trend, and I was expecting maybe that trend to continue, but it looks like we're back to normal. Was there something unique about the second quarter's...

I have to be honest with you, Dennis. I'm going to to have to go back and look. That was a long time ago.

You know what, Matt, Marc and I are sitting here.

I don't know the reason.

Ian, do you know? Can you answer that question? Are you talking about Las Vegas?

I don't have a definitive answer. I'd have to look.

I think both, Steve. I'm just looking at corporate Wynn was down $60 million sequentially, and promotional allowances were up $6 million.

First of all, I can answer part of the question. I just realized. We have been holding very well. We've had a huge influx of Chinese business in Las Vegas, and that would account for it.

In the second quarter.

We're winning more money, and so we're giving away more. We've got this rather dramatic increase in business in Las Vegas, right? You saw that in both quarters.

Okay. And talking about Vegas, I was going to ask...

And the percentage -- excuse me, the percentage can go up depending on how that increase in casino revenue is structured. When it's highrollers, then discounts to losers and stuff like that.

I don't know whether Marilyn is the right person to ask or...

I am. I am in this case because I do know the answer.

Okay. The low hold in the quarter, was that associated with maybe one group or one month or one event? Or was that pretty much across the board?

No, it was Baccarat.

Obviously, Baccarat. But was it one specific...

No.

Time period...

No.

Or kind of throughout the whole quarter?

No. They come in and they come in groups of 5 and 6 and 3 and 4. And we had guys win $7 million and $6 million. A casino that can win $200 million or $300 million in Baccarat can do that. Our Baccarat percentage overall is wonderful. It holds up the casino, but you do get these kinds of fluctuations. This month, it was off by 3% or 4%, if you take it the way we usually look at it. And that would've been about $15 million to $20 million in Las Vegas.

Yes. But I guess [indiscernible] on the question. Was it all at one time?

Everything was normal outside of Baccarat.

Right. Was the Baccarat low hold over a short period of time or spread out?

Dennis, you've seen the August numbers for the entire city, so you clearly saw that, that was down in August and also in July. So it was each month, but it wasn't one event that caused this quarter. We have too much volume for one group to come in and cause 5 points of swing. It was really throughout the entire quarter.

Your next question comes from Janet Lu of Goldman Sachs.

I've got several questions on the Macau business. First of all, you've said that October trend looks still quite good, but I just want to understand a little bit on the second week of the October, which was after the Golden Week holiday. What is the trend of your market share and revenue? And also -- yes.

Up.

Okay. Go ahead. Sorry.

I just answered you. Up. The second week after Golden Week, up. Okay. What's the next question? What was your other question? I'm sorry.

Well, actually, in the first week, we noticed that there's some pickup in the market share in Wynn Macau. So is that because of like win rate? Or is there any -- or did you do any -- more aggressive in marketing or...

You're paying too close attention. You're too close to the sheet of paper. In a week, to look at a casino like Wynn Macau is a mistake. We have a lower hold percentage one week, a higher percentage the next week. I answered to you about the turn, about the level of activity, it's up, but looking at the place week by week is a waste of your time, really. Don't do that. Even though they publish the numbers you're seeing, gross market shares. Gross market share means nothing, absolutely nothing. What good is gross market share when you have 4 hotels or 3 hotels or 2 hotels, and you have 3 sets of payroll, 3 sets of depreciation, extra interest expense. It's a totally worthless number, and wasting time on this call is probably not productive.

Sorry. And my second question is regarding your Cotai project. Because the government has reiterated its intention not to increase the table cap until 2013 and keep the growth up 3%. So on your Cotai project, how are you going to allocate the tables of around like 500 tables for the project?

Your interpretation of the table cap is, that the current table cap is going to apply to future hotels than you misunderstood the government's position. The current table cap has to do with the current tables.

Your next question is a follow-up from Harry Curtis of Nomura.

Steve, the topic, at least here in New York, is Occupy Wall Street, and I was going to ask a wise ass question about whether or not you were going to contribute to that cause. But I do think that it raises an interesting political question, which is: How do you see the landscape politically now? Is there any reason for optimism given the current slate of candidates to give you hope for the regulatory environment improving for your business?

We had a debate here last night and we had a focus group, that actually took place in Tryst last night with Frank [indiscernible]. It's very interesting about the folks who are occupying Wall Street. That group is quite diverse. There are people in there that think the government should give them more, just because they are alive regardless. There are people there who are opposing government spending. There are people there that are opposing bailouts. That group is not homogeneous by any means. What you do have on Wall Street is a reflection, a real reflection in my opinion, of the anxiety, the insecurity and the fear that is endemic in the United States of America, about the way government has gotten into the business of managing its life and the ability of the government to manage the economy intelligently by increasing the emphasis in government spending rationally [ph] to the point that we want [ph] everybody's financial security. I am watching my employees' standard of living drop because of deficits. I think that the American public is beginning to make a connection between deficits and their own loss of living standard. People that work from here are being paid an $0.80 on their way to $0.70, and even though I've given 2 cost of living increases to my employees, in spite of the operating losses in America, because I've been able to use the money from the cap. I have not been able to keep up with the effect of deficits on the living standard of my employees. The net result of all of this is frustration, anxiety and anger. You're seeing that on Occupy Wall Street. You can see it taken to the next level in Greece, where people are trying to break into a Parliament, primarily controlled by the unions, and the very kind of government that the people who are trying to break down the fences elected. There comes a moment when the population realizes that it has to stop, and sometimes it takes a form of tax the rich people, which is a reflection more of a lack of understanding of how the economy works. Rich people are now being defined by the administration as people who make $1 million. Well, most of the businesses in America, other than giant corporations, are paying taxes under Chapter S, partnerships or individual proprietorships. So somebody shows that they've made $3 million or $2 million this year, and they paid personal taxes on that money. They subtract the cost of living and then what's left, after -- and that does not show that probably 25% or 30% of their profits are tied up in accounts receivable or inventory, stuff that they can't spend or get their hands on, but to support their business and their employment. And then they take whatever is left, these so-called millionaires, and they open up another shop or another office. And that, that is the only known engine of growth in the United States of America. And we have an administration that is fanning the fires that this is somehow undeserved, profligate millionaires, and it is worse than hypocrisy. It is totally dishonest. It represents by young people who don't know the difference, simple misunderstanding and lack of understanding of how the economy works or what's going on in America. But if it's a politician that does it or a union leader, then it represents something much more pernicious. It represents a deliberate misleading of the public. And I think that Americans are waking up to this. And it's taking the form of anger and dissatisfaction with the government. And I think that's probably just right, because until there is a change, until this all stops, it's only going to get worse. No matter what anybody says in some fancy speech, even if it's a President, it is going to get worse. People say we're angry at the government for not compromising both sides. Well, we don't really have a situation that lends itself to what reasonable people would call compromise. We've got a situation that requires a change. That is to say one side is right here and the other side is wrong. You cannot sustain these deficits. You cannot undercut the people that form the jobs and create the employment in this country. I'll give you an example of Las Vegas in my own industry. Across the street from me is an empty piece of property that's 34 acres. It's owned by 2 Israeli gents, that are friends of mine, that bought it at a very high price and are sort of in a difficult position now. They even owe money against that property. They have come to me on a monthly basis to say, go ahead, Steve, you take it, build something, connect it to Wynn and Encore, your golf courses and convention facilities and help us get out of this. We're willing to take a very long-term approach, and we'll turn the property over to you, even if we have to pay off the loan. Well, that's a very attractive offer, especially since they're willing to pay us for management, design and supervision, as well as inviting us to invest. But I have to tell both of these men, who were friends of mine, look, I can't give you a reasonable projection of what this return on investment will be even if we spend $2 billion and create 10,000 direct jobs and another 30,000 indirect jobs, for a total of 40,000 jobs. That's how many jobs I could create if I broke ground on the Frontier property in the next 6 months or a year. And we would know how to do that. But I can't tell the men who are willing to sacrifice any short-term benefit in exchange for a long-term opportunity, because I cannot predict what healthcare costs are going to be, what regulatory load they're going to heap on us, what new taxes or other burdens this insatiable governmental appetite for money from the citizens will take us to. Now that is simply a statement of fact. It isn't a partisan political pitch. It's simply a statement of fact from a businessman who has supported probably more Democrats than Republicans. But I say right now that the Democratic agenda of spend and bribe the public has bankrupt this country, and until it stops, the citizens of this country are in for more hard times. And fancy speeches aren't going to change that, only a fundamental realization that citizens are going to have to take real sophisticated responsibility for how we allocate the resources of this country.

Steve, we've got to get you on the slate.

I'm not qualified, but I am qualified to say what I just said. I stand by it.

At this time, there are no further questions. I'll turn the conference back to management for closing remarks.

Nice talking to you. See you in 90 days.

Thanks, everybody.

Thank you for participating in today's conference call. You may now disconnect.