Wynn Bets Big on the Las Vegas Strip (and Macau)

The company wants to stay relevant in Sin City, but that’s not its only priority.

Different locales call for different strategies in the casino business.

When Macau was the buzzing international growth market as recently as 2019, most American casinos sold investors on their plans to expand in China.

But a couple of years of pandemic lockdowns, and uncertainty about gambling licenses amid a crackdown on corruption in the country’s gaming sector, have splashed cold water on some of the hotter expectations in the region.

Take Wynn, for example.

Wynn Resorts (WYNN) – Get Wynn Resorts, Limited Report has two casinos in Macau, the Wynn Macau and Wynn Palace, that were the company’s most profitable resorts. But both resorts lost money for the company in the final months of 2021.

Just three years ago, Macau accounted for 70% of Wynn’s business.

While Wynn never abandoned Las Vegas, the company definitely put its hometown on the back burner while it focused its efforts abroad.

During the company’s most recent earnings call, recently installed CEO Craig Billings gave some insight into the move.

Las Vegas’ High Cost of Success
Las Vegas as a gambling hub is different than any other city in America for numerous obvious reasons.

However, the city is also different than other gaming communities, according to Billings.

“Las Vegas is a very different market compared to regional markets. Potential operational deleveraging in an economic downturn is more extreme [in Vegas] as we saw in 2009, and the need for continuous and sizable reinvestment in order to stay relevant is high,” Billings said of the city.

Source: https://www.thestreet.com/investing/wynn-high-cost-of-operating-in-vegas