Worldwide casino operator Wynn Resorts announced on Wednesday that it is giving a special $8 per dividend as well as promising to double its quarterly dividend to $1 per share for 2013. Understandably, shareholders were happy to hear the good news.
But maybe not all of them. Wynn partner and Japanese billionaire, Kazuo Okada, must have made a quick calculation and started to bang his head against the wall. Okada’s company, the Universal Entertainment Corporation owned 21 percent of Wynn resorts. However, Okada’s 24.5 million Wynn shares were forcibly taken away from him at a 30% discounted price in February.
According to Wynn lawyers, Kazuo Okada tried to influence Filipino gambling law enforcers in his favor but got caught with it. As a result, he lost his shares in Wynn at a price. As it usually happens, a bitter legal battle is being fought.
Let’s do a quick math session. Only this week, Okada lost almost $200m on the special dividend given to shareholders. On top of that, a further $25m is lost every quarter in 2013. But the biggest chunk is the $700 million lost on the discounted share redemption. They are now easily in the billion dollar region, not peanuts even for a gambling operation giant such as Okada.
The relationship between Steve Wynn and Okada started to go bitter after Okada suggested they build a Filipino casino in Manila’s Entertainment City together.
Wynn eventually turned the offer down, and Okada decided to start the project alone. Okada’s departure angered Wynn, mainly because he didn’t want a huge Japanese competitor in the upcoming Filipino gambling market.
Okada was caught trying to bribe Filipino gambling authority officers with expensive generous gifts and expensive dinners. This seemed enough for Wynn to kick him out of the board of his company and take away his shares.
The Asian markets, including the Filipino sports betting and casinos, are considered to be the most promising gambling venture of the future. No surprise the big players apply every trick in the book to gain a foothold. And China has not even opened its doors for online gambling…