Wynn Resorts’ VIP gaming fails to deliver


Nov. 27 2019, Updated 2:06 p.m. ET

VIP table gaming

Wynn Resorts’ (WYNN) VIP table gaming’s drop in 3Q14 was $25.1 billion. This was 17.4% lower than the same quarter in 2013. Drop is the amount of cash and net markers issued that are deposited in a gaming table’s drop box.

Consequently, VIP table gaming’s win percentage (calculated before commissions) as a percentage of drop for the quarter was 2.78%. Table games win is the amount of drop that is retained and recorded as casino revenue. This is below the 3.04% experienced in the third quarter of 2013 but within the expected range of 2.7% to 3.0%.

The above chart shows the quarterly trend of Wynn Resorts’ Macau VIP table wins. For 3Q14, Macau’s VIP table win stood at $698 million, down 24.2% year-over-year and 9.8% quarter-over-quarter.

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Wynn Macau’s VIP gaming revenues have been negatively impacted by the ongoing anti-corruption campaign in China. This has negatively impacted other casino players operating in the Macau region, including Las Vegas Sands (LVS), MGM Resorts (MGM), and Melco Crown Entertainment (MPEL). Exchange-traded funds (or ETFs) like Consumer Discretionary Select Sector Standard and Poor’s depositary receipt (or SPDR) fund (XLY) invests in these companies.

Key takeaways from the 3Q14 earnings call

Despite negative quarter-to-quarter growth, Wynn Resort’s (WYNN) Chairman and CEO Stephen A. Wynn remained positive on Macau and said it has always been government-sensitive. He also added that “the turmoil in Hong Kong, the smoking—the new regulations in smoking, the turmoil in Hong Kong lately in the month of October and, of course, the policy of the central government in being very, very aggressive about what appeared to be a misconduct and corruption of the government has put a lot of the wealthy businessmen in the foxholes.”

Matthew O. Maddox, president of Wynn Resorts, said, “The decline in VIP was largely in the junket area.” Junket operators introduce VIP customers to the casino companies, and the VIP customers typically rely on credit from junket operators who, in turn, collect commissions from the casino companies.

To know why Wynn Resort’s (WYNN) mass market segment outperforms, read the next part.


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