Item 1.01 Entry into a Material Definitive Agreement.
On December 16, 2022 (Hong Kong time), Wynn Resorts (Macau), S.A. ("WRM"), an
indirect subsidiary of Wynn Resorts, Limited, entered into a definitive gaming
concession contract (the "Gaming Concession Contract") with the government of
the Macau Special Administrative Region of the People's Republic of China
("Macau"), pursuant to which WRM was granted a 10-year gaming concession
commencing on January 1, 2023 and expiring on December 31, 2032, to operate
games of chance at Wynn Palace and Wynn Macau, the two integrated casino resorts
of WRM. The material provisions of the Gaming Concession Contract are summarized
below.
Consideration under the Gaming Concession Contract and the Macau Gaming Law
WRM shall pay the Macau government the following payments:
(i) Gaming premium - The gaming premium is composed of (a) a fixed portion in an
amount equal to MOP30.0 million (equivalent to approximately $3.7 million) per
year; and (b) a variable annual portion of (1) MOP300,000 (equivalent to
approximately $37 thousand) per gaming table located in special gaming halls
reserved exclusively to particular games or players; (2) MOP150,000 (equivalent
to approximately $19 thousand) per gaming table that is not reserved exclusively
to particular games or players; and (3) MOP1,000 (equivalent to approximately
$124) per gaming machine, including slot machines, operated by WRM. The amount
of the variable portion of the premium cannot be less than the amount that would
result from the permanent operation of 500 gaming tables and 1,000 gaming
machines. By a Dispatch of the Chief Executive of Macau, the Macau government
set a minimum average annual gross gaming revenue of MOP7.0 million (equivalent
to approximately $0.9 million) per gaming table and MOP300,000 (equivalent to
approximately $37 thousand) per gaming machine. If WRM fails to reach such
minimum gross gaming revenue, WRM shall pay a special premium equal to the
difference between the special gaming tax calculated based on the actual gross
gaming revenue and that of such minimum gross gaming revenue;
(ii) Special levies - WRM shall pay, on a monthly basis, certain special levies
to the Macau government. In accordance with the Macau Law No. 16/2001 (the
"Macau Gaming Law"), as amended by Law No. 7/2022, the special levies payable
are comprised of (a) a contribution of 2% of gross gaming revenues to a public
foundation in Macau for the promotion, development or study of culture, society,
economy, education, science and charity events; and (b) a contribution of 3% of
gross gaming revenues to the Macau government for urban development, tourism
promotion and social security in Macau. Gross gaming revenue is defined as all
revenues derived from casinos or gaming areas. Pursuant to Administrative
Regulation No. 54/2022 of Macau, the Macau government may reduce the special
levies payable by WRM (1) based on WRM's contribution to the attraction of
tourists who enter Macau for tourism and business purposes and hold travel
documents issued by countries or regions other than the People's Republic of
China, as recognized by The Gaming Inspection and Coordination Bureau of Macau;
or (2) if WRM's operations are adversely affected by abnormal, unpredictable or
force majeure circumstances associated with the prevailing economic conditions
of Macau; or (3) factors as determined by the Chief Executive of Macau; and
(iii) Special gaming tax - In accordance with the Macau Gaming Law, WRM shall
pay, on a monthly basis, a special gaming tax to the Macau government, which is
assessed at the rate of 35% of annual gross gaming revenues.
Committed Investment
Pursuant to the Gaming Concession Contract, WRM also committed to make the
following investments in various gaming and non-gaming projects:
(i) Committed investment - MOP17.73 billion (equivalent to approximately
$2.20 billion) over the course of the ten-year term of the Gaming Concession
Contract, in respect of the development of certain non-gaming and gaming
projects, of which MOP16.50 billion (equivalent to approximately $2.05 billion)
will be used for non-gaming capital projects and event programming in connection
with, among others, attraction of foreign tourists, conventions and exhibitions,
entertainment performances, sports events, culture and art, health and wellness,
themed amusement, gastronomy, community tourism and maritime tourism. WRM
submitted and received approval of the conceptual planning of such projects and
programming. In each year during the term of the Gaming Concession Contract, WRM
shall submit to the Macau government a summary of the progress of these
projects, which should set out, among other items, the projects that will be
carried out in the following year, the value of its investment and the execution
period.
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(ii) Additional investment - WRM shall be required to increase its total
investment in non-gaming projects by 20% if market-wide gross gaming revenues
increase to MOP180.00 billion (equivalent to approximately $22.32 billion) in
any one year (the "Trigger Event"). Such investment will be spent rateably in
the remaining concession period. The increase percentage will be reduced to 16%,
12%, 8%, 4% or 0%, respectively, if the Trigger Event occurs during the sixth,
seventh, eighth, ninth or tenth year of the concession period, respectively.
Bank Guarantee under the Gaming Concession Contract
WRM has provided a first demand bank guarantee of not less than MOP1.00 billion
(equivalent to approximately $124.0 million) from a credit institution
authorized to operate in Macau in favor of the Macau government to support WRM's
legal obligations under Macau law and contractual obligations under the Gaming
Concession Contract, from January 1, 2023 until one hundred and eighty days
after the term of the Gaming Concession Contract expires or the rescission of
the concession.
Other Obligations under the Gaming Concession Contract and Macau Gaming Law
WRM will be required to observe the eligibility requirements under the Macau
Gaming Law, including maintaining a share capital of not less than MOP5.00
billion (equivalent to approximately $620.0 million), maintaining a net asset
value of MOP5.00 billion (equivalent to approximately $620.0 million) throughout
the concession term, observing the capital and management participation
requirement in connection with its managing director, and maintaining its
financial capacity to operate as a gaming concessionaire.
WRM will be required to obtain prior approval from the relevant Macau
authorities or officials for various corporate changes and actions, including
expansion of its business scope, issuance of shares, transfer of or creation of
any encumbrances over its shares, issuance of debt securities, change of its
managing director or the authority delegated thereto, change of its articles of
association, certain transfers of property rights and creditor's rights,
entering into a consumer loan contract or similar contract with a value equal to
or exceeding MOP100.0 million (equivalent to approximately $12.4 million), and
granting of a loan to any of its directors, shareholders or key employees.
WRM will also be required to notify the Macau government of certain other
changes, including any loan, mortgage, claim for obligation, guarantee or the
assumption of any debt for financing its business with a value that equals to or
exceeds MOP16.0 million (equivalent to approximately $2.0 million). In
particular, WRM will be required to notify the Chief Executive of Macau at least
five working days in advance prior to making financial decisions (i) related to
the transfer of funds within WRM in excess of 50% of its share capital, (ii)
related to employee salaries, remuneration or benefits in excess of 10% of its
share capital, and (iii) not related to above items (i) and (ii), whose value
exceeds 10% of its share capital.
Termination and Redemption under the Gaming Concession Contract
The Macau government may unilaterally rescind the gaming concession if WRM fails
to fulfill its obligations derived from Macau law or under the Gaming Concession
Contract, including in the circumstances of (i) endangerment to the national
security of Mainland China or Macau, (ii) failure on the part of WRM to perform
its obligations under the Gaming Concession Contract, (iii) public interest, and
(iv) WRM ceasing to be eligible for the gaming concession under the Macau Gaming
Law.
If the Macau government unilaterally rescinds the Gaming Concession Contract due
to WRM's non-fulfilment of its obligations, WRM will be required to compensate
the Macau government in accordance with applicable law, and all of WRM's
casinos, gaming assets and equipment and ownership rights to its casino areas in
Macau will be transferred to the Macau government free from any encumbrance or
lien and without compensation.
Beginning in the eighth year of WRM's concession, the Macau government may
exercise its right to redeem the concession by providing WRM with at least
one-year prior written notice. In such event, WRM is entitled to fair and
equitable compensation pursuant to the Macau Gaming Law. The amount of such
compensation relating to the projects agreed with the Macau government will be
determined based on the earnings of these projects, before interest,
depreciation and amortization for the fiscal year immediately preceding the date
the redemption is declared, multiplied by the number of years remaining on the
term of the Gaming Concession Contract.
Pursuant to the Gaming Concession Contract, WRM shall revert to the Macau
government the casino areas and gaming equipment, without compensation and free
. . .
Item 7.01 Regulation FD Disclosure.
On December 18, 2022 (Hong Kong time), Wynn Macau, Limited ("WML"), an indirect
subsidiary of Wynn Resorts, Limited with its ordinary shares of common stock
listed on The Stock Exchange of Hong Kong Limited (the "HKSE"), filed with the
HKSE an announcement that on December 16, 2022, WRM, a wholly-owned subsidiary
of WML, entered into the Gaming Concession Contract with the Macau government.
The announcement is furnished herewith as Exhibit 99.1.
The information furnished pursuant to this Item 7.01 (including Exhibit 99.1)
shall not be deemed to be "filed" for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to
the liabilities of that section, nor shall it be deemed incorporated by
reference in any filing under the Securities Act of 1933, as amended, or the
Exchange Act, except as shall be expressly set forth by specific reference in
such a filing.
Item 9.01 Financial Statements and Exhibits.
(d)Exhibits.
Exhibit No. Description
99.1 Announcement of Wynn Macau, Limited, dated December 18, 2022
104 Cover Page Interactive Data File - the cover page XBRL tags are embedded within
the Inline XBRL document
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