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China – Wynn feels seventh heaven on Macau increase

By - 28 October 2013

Steve Wynn heralded Macau as being the driving force behind a seven per cent rise in Wynn Resorts third quarter revenue before criticising the attitude of states opening to gambling in his domestic market of the US.

Wynn Resorts brought in net revenues for the third quarter of 2013 of  $1,390.1m, compared to $1,298.5m in the third quarter of 2012. “The increase was driven by a 9.6 per cent revenue increase from our Macau operations and 1.1 per cent higher revenues from our Las Vegas operations,” said Lewis Fanger, Vice President of Wynn Resorts. “We currently have 501 tables (273 VIP tables, 218 mass market tables and 10 poker tables) and 884 slot machines  atWynn Macau.”

Macau saw table games turnover in the VIP segment rise 9.8 per cent to $30.3bn for the third quarter of 2013 whilst table games win in the mass market segment increased by 13.5 per cent in the third quarter to $239.8m.

Slot machine handle of $1.2bn for the third quarter of 2013 was 18.5 per cent above the prior-year quarter, and slot win increased 2.4 per cent compared to the prior-year period. Win per unit per day was 11.2 per cent higher at $689, compared to $620 in the third quarter of 2012. The average number of slots in the 2013 third quarter declined by 75 machines versus the 2012 period due to various changes designed to enhance the comfort of the casino floor.

Mr. Fanger said: “During the first half of 2013, we began a renovation of the approximately 600 guestrooms in the original Wynn Macautower, resulting in an approximate seven per cent reduction in the number of available room-nights in the 2013 third quarter versus the prior-year period. We expect to complete the guestroom renovation by the end of 2013. We achieved an average daily rate of $310 for the third quarter of 2013, modestly above the $307 reported in the 2012 quarter.

Wynn is currently constructing Wynn Palace, a full-scale integrated resort containing a 1,700-room hotel, performance lake, meeting space, casino, spa, retail offerings, and food and beverage outlets on Cotai in Macau. Mr. Fanger explained: “InFebruary 2013, we started pre-foundation work and continue to remain on pace with the construction schedule. Additionally, in July 2013, we signed a $2.6bn guaranteed maximum price (GMP) contract for the project’s construction. The total project budget, including construction costs, capitalized interest, land, and pre-opening expenses, is $4bn. We expect to open our resort on Cotai in the first half of 2016.

During the third quarter of 2013, we invested approximately $109.9m in our Cotai project, taking the total investment to date to $519m.”

In Las Vegas, net revenues were $392.5m, a 1.1 per cent increase from $388m in the third quarter of 2012.

CEO Steve Wynn acknowledged the company’s current reliance on the Macau market despite a willingness to expand stateside.

“You know that we are primarily an Asian company. Thank goodness and God bless that,” he said. “These states are asking us to come and spend billions of dollars. Now what if we were any other business, they would stand on their head and spit wooden nickels to get billions of dollars invested. But we find ourselves being treated, in many respects, as if they are doing us a favour.”

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