Wynn Resorts CEO Steve Wynn discusses building the Encore casino-resort in Las Vegas

On the Call: Wynn Resorts CEO Steve Wynn

As gamblers spend less money in Las Vegas, investors and others following the industry wonder about the prudence of adding hotel rooms to a saturated marketplace.

Wynn Resorts opened its Encore hotel-casino in December 2008, connecting a second posh tower with the luxury Wynn Las Vegas and bringing 90 more table games, 800 slot machines, plus more restaurants, stores and a nightclub.

But even with the Encore, Wynn Resorts’ revenue in Las Vegas rose just 5.4 percent to $505.8 million in 2009.

QUESTION: Is the Encore helping Wynn, and how do you feel about the long-term strength of the twins next to each other?

RESPONSE: No, it’s not what I thought it would be. I thought that it would add at least $200 million or $250 million of (earnings before taxes, depreciation and amortization) to our bottom line, and nothing remotely like that has happened. Of course, it was conceived in a market that was entirely different than today …

If we had no Encore, if we didn’t add those other 2,000-odd rooms, would we have made even less or would we just be better off because we would have had $2.3 billion in cash more than we do now? You know, I would love to have the ability to reconsider that decision at the moment, but I don’t.

I know this: That there’s a wonderful, powerful synergy that we’re seeing in people that stay at Encore and love it and come back. They’re not paying enough for the rooms to suit me, and to suit our pro forma, but neither is that happening anywhere else in America that I know of or in Europe.

So, would I build Encore if I had to do it today? No, I’d keep my money. Fortunately, we have enough money that we don’t sweat it.