Steve Wynn's Luck Turns South

Steve Wynn in Macau before allegations of sexual harassment surfaced

Tycoon Steve Wynn's luck might be running out. Even though he denied allegations of sexual misconduct, Wynn, 76, resigned as the Republican National Committee finance chairman late last month and the other day resigned as CEO of and chairman of Wynn Resorts.

He claimed the allegations were "preposterous" and blamed "an avalanche of negative publicity" driven by a non-fact-based "rush to judgment" for his decision to step down as head of the eponymous casino empire.

Allan Zeman is now non-executive chairman of Wynn Macau

At first he blamed his ex-wife Elaine for the allegations, claiming they were still going through a nasty divorce, but now he has been silent.

Meanwhile shares in Wynn Macau plunged at the end of January when the allegations first came to light, but yesterday after his resignation, his right-hand man Matthew Maddox replaced him as CEO of Wynn Macau and Wynn Resorts, while Allan Zeman was named non-executive chairman of Wynn Macau.

Shares of Wynn Macau closed at HK$27 today and analysts believe Wynn's resignation will stabilize things. However, there are questions as to how much longer Wynn Macau will be allowed to keep its casino concession. It is set to expire in 2022, and on January 22, days before the bomb was dropped, Wynn was confident the concession would be renewed.

Two pairs of rare porcelain vases Wynn bought at auction

Nevertheless, with this recent news, the Macau Gaming Inspection and Coordination Bureau which regulates casinos, has declined to comment.

In the meantime, Wynn's abrupt departure will be difficult -- he was the face of the casinos, who put his own personal touches in everything from operations to decor. In Macau he knew how to kowtow to Beijing and Macau.

He shelled out US$12.7 million for four large porcelain vases from the Jiaqing period (1796-1821) at a Christie's London auction in July 2011.

"We are delighted to be able to return these extraordinary examples of Chinese culture to the People's Republic of China, and place them on display in the city of Macau, which we are so fortunate to be a part of," Wynn said at the time.

The future of Wynn Macau may be in in the balance

The vases aren't the only treasures he has brought back to the mainland,but also a Ming dynasty vase that Wynn donated to the Macao Special Administrative Region.

So is his guanxi good enough to keep him out of trouble in Macau? We shall see...

Reversal of Fortune?

Steve Wynn unveils four Qing Dynasty vases with then CE Edmund Ho

In July 2011, casino magnate Steve Wynn purchased four rare porcelain baluster vases from the Qing Dynasty at Christie's auction in London for $12.8 million, several times more than the pre-sale estimate.

He has said that he is committed to returning Chinese treasures back to China, and this quartet of vases was donated to the Macau Special Administrative Region, where they are in a permanent collection of the Cultural Affairs Bureau's Macao Museum.

Looking back, the PR stunt seems to have been Wynn's attempt at cultivating guanxi with the mainland in the hopes it would lead to even better business in the future.

Stanley Ho with the horse's head he bought at auction in 2007

That's what Stanley Ho did too when he repatriated two animal heads that were looted from the Summer Palace in the 1800s. Ho purchased the boar's head in 2003 from a New York collector and donated it to China, and again the horse's head in 2007 from a private collection in Taiwan.

But having spent millions of dollars, what has come of it?

Instead of hoping for the investment -- oops repatriation of treasures -- to pay off, things have gone south in a really bad way.

Chinese President Xi Jinping continues to wage his battle against corruption and has not only settled his sights on gambling tables in Macau -- but worldwide.

"Some foreign countries see our nation as an enormous market, as we have investigated a series of cases," said Hua Jingfeng, a deputy bureau chief at the Ministry of Public Security. "A fair number of neighbouring countries have casinos, as they have set up offices in China to attract and drum up interest from Chinese citizens to go abroad and gamble. This will also be an area that we will crack down on."

Can we hear the pin drop in Macau, Manila, Singapore and Las Vegas?

Not only is the Chinese government cracking down on gamblers, but also the casinos trying to promote themselves. The authorities will make it harder for these "resorts" to advertise from billboards to print and even text messages.

Construction continues at Wynn Palace, phase two at Cotai

There will also be further restrictions on visa requirements, and the flow of money will be tracked by officials through UnionPay, the only domestic credit card in China.

Gambling revenues in Macau have dropped for the first time since foreign operators were allowed into the former Portuguese colony in 2002. In December alone gaming revenues plunged 30 percent.

The anti-corruption crackdown has scared the high rollers, who depended on junkets to not only get them to Macau, but also supply a steady stream of credit. Some 16 percent of junket operators shut down last year, some carrying debts.

Did Wynn know this was coming? If there were any signs, he didn't see them at all.

"China remains a big question mark. We have more questions than answers," he admitted during a conference call earlier this month. "Thousands of our Macau employees are anticipating promotion and a better life because of Wynn Palace... We have learned in the last 12 years to behave in China, and that is to listen carefully to what the leadership says and to conform with the program as we are their guest," Wynn said. "We wait for an announcement from the government with baited breath... What we are seeing in China is an entrenchment."

Wynn could only say that he hoped "our ambitions to grow in Macau will continue to develop".

Does that sound like cautious optimism or completely blindsided?

So much for the vases and the animal heads. Millions of dollars do not buy security.

While the big gamblers are barely trickling in these days, casino operators in Macau are now wondering if their $23 billion investment in their second phases to expand gambling tables and entertainment options will pay off now...