Wynn Resorts Reports $758.1 Million Loss in Q3, Focuses On iGaming Venture

On November 5, Wynn Resorts reported a net loss of $758.1 million in Q3, a 53.3% decline year-on-year. Despite huge falls in revenue at its two Macau resorts, positive trends have been emerging on the local market.

Positive Trends Emerge in Macau

High-end hotel and casino developer Wynn Resorts reported yesterday a $758.1 million loss during the third quarter compared to last year’s results. The 53.3% drop is due, for the most part, to a performance decrease at the company’s two resorts in Macau during the pandemic.

Wynn Resorts’ third-quarter revenues fell 77.5% to $370.5 million, compared to $1.647 billion year-on-year. The net loss of $758.1 million is significant in comparison to the net loss of $3.5 million in 2019. Wynn Macau reported an 89.2% decline, to $51.4 million, while Wynn Palace revenues fell by 97.4%, to $15.7 million.

Wynn Palace and Wynn Macau generated between 65% and 70% of Wynn Resorts’ quarterly revenue before Covid-19. The resorts’ income dropped by more than 90% in six of the past seven months. The Macau market was deeply affected by travel restrictions and mandatory quarantines. Both casinos briefly closed for two weeks in February before reopening on a reduced basis on February 20.

During Wynn’s quarterly conference call with analysts on Thursday, CEO Matt Maddox mentioned positive trends emerging in Macau. The number of coronavirus infections has declined compared to the US and the government of Macau has softened travel limitations. “It feels like the market is going to get better. It’s one of the safest places on the planet”, Mr Maddox added.

Las Vegas On The Rise

Wynn Resorts has decided to focus on its properties in Las Vegas and Boston, which generated a cash flow of $20.3 million and $22.3 million, respectively. Las Vegas revenues fell by 53.3%, to $186.7 million, and Encore Boston Harbor reported a decline of 33.6%, to $116.7 million.

Mr. Maddox commended Wynn Resorts’ efforts in past months, despite the difficulties the group encountered during the pandemic. Those efforts resulted in improvements and progress in each of Wynn’s properties.

Las Vegas hotels produced half of the company’s total revenue in Q3, despite declines that ended on September 30.

“Wynn Las Vegas continued to experience strong leisure demand on weekends with solid hotel occupancy and casino play,” Mr. Maddox said. Wynn Las Vegas aims to have the “highest room rates” on the Strip, he added. The company’s prided casino is reporting a stream of new customers coming from competitors.

Encore Las Vegas limited its operating schedule to four nights a week starting in October, due to smaller demand. From Friday, Encore will close its doors at night in order to respect the governor’s curfews, the result of a spike in Covid-19 infections.

Wynn Focuses on Wynn Interactive

Wynn CFO Craig Billings and Mr. Maddox also brought up Wynn’s brand iGaming/sports betting division Wynn Interactive, which was formed through a merger with strategic partner BetBull in October 2020. Wynn Resorts invested $80 million into developing the new business and owns 71% of the venture. Wynn Resorts said it wants to develop its online and digital offer across the US.

Wynn Interactive currently operates in nine states and has plans to expand in seven others, including Tennessee and Virginia.

“We have made substantial progress advancing Wynn Interactive,” Mr. Maddox said. “We are also in discussions with potential partners regarding additional access agreements in other jurisdictions.”