Wynn Resorts reported an 88% year-on-year revenue increase to $1.67bn in Q3 2023, fuelled by a robust recovery in its Macau operations post-Covid.

Topline numbers 

Wynn Resorts generated an 88% year-on-year revenue rise to $1.67bn in Q3 2023, mostly driven by a strong recovery of its Macau properties. 

Across its two Macau venues, Wynn Palace revenue soared 598% in Q3 to $524.8m, while Wynn Macau revenue increased by 631% year-on-year to $295m.  

Wynn Las Vegas generated a 14% year-on-year revenue rise to $618m, but revenue at Encore Boston Harbor decreased by 1% to $60.5m. 

Despite the overall revenue rise, the company recorded a net loss of $116.7m, which, while still significant, marks an improvement from a net loss of $142.9m as reported in Q3 2022. 

Adjusted property EBITDAR came in at $530.4m for the third quarter of 2023, compared to adjusted property EBITDAR of $173.5 Q3 2022.

Wynn Interactive, meanwhile, continued to generate an operating loss of $17.8m in Q3. 

Earlier this year, Wynn Resorts withdrew its digital platform WynnBet from eight US states to primarily focus on Massachusetts and Nevada, where it also has a physical presence. 

However, as a result of this decision, Wynn’s EBITDA burn rate decreased substantially, both sequentially and year-over-year to $4.9m in Q3 2023. 

News nugget

Wynn Resorts CEO Craig Billings said the construction of Wynn Al Marjan Island, Wynn’s planned integrated resort in the UAE, is well underway. He is confident the resort will be a “must see tourism destination”.

He also said that on the back of several recent regulatory developments in the UAE, he “noticed increased chatter about the opportunities there”. 

Therefore, he wanted to take a moment to shares Wynn’s perspective.

“We believe it’s highly unlikely that every Emirate will ultimately avail themselves of the right to host an integrated resort,” Billings said.

“There’s a whole bunch of reasons for this, ranging from cultural nuances to population density to varying degrees of need for the additional visitation. 

“Our view is that it will likely be us and us alone for a multi-year period given that we are well underway on construction now.”

He added that after that, it may be a duopoly or an oligopoly of three at most.

“But I find either ultimate market structure undaunting given the database advantages of being first and the fact that we very successfully operate in the two most competitive markets in the world: Vegas and Macau.”

For Billings, the UAE remains “the most exciting new market opening in decades”.

Best quote

“Looking ahead, we have a strong pipeline of forward group demand, very healthy gaming market share, and a robust programming calendar with F1 and Super Bowl just ahead of us. And while it certainly is an increasingly complex world out there between inflation, rates, geopolitics, things continue to feel pretty good around here.”
CEO Craig Billings on the performance of Wynn Las Vegas

Best question

Stephen Grambling from Morgan Stanley wanted to get a better idea of what factors could influence margins in 2024, especially in Las Vegas given the current contract negotiations with the Las Vegas hotel workers union.

CEO Billings replied: “We really view margin as an outcome of aggressively driving revenues and diligently managing costs and outcome, not a target. So we don’t forecast margins per se. 

“On the revenue side, I think our results in Q3 speak for themselves and we will continue to make sure that we have the best offering in Vegas.”

He also added that the company is “of course looking at ways to offset” some of the rising labour costs. 

However, he said “because of Covid, we have a playbook for every scenario out there and we know-how to run the business as efficiently as possible at any given revenue.”

Current trading & outlook

Following the release of its Q3 results, Wynn Resorts experienced a more than 5% decline in its stock value during the extended trading session. 

However, the market sentiment appeared to shift, leading to a subsequent recovery in shares.

Wynn Resorts has reported a 76% revenue surge in Q2 2023, propelled by exceptional growth in its Macau operations.

Topline numbers

For Q2 2023, Wynn Resorts reported a substantial increase in revenue, reaching $1.6bn, up 76% on Q2 2022.

Net income stood at $105.2m, marking a stark contrast to the net loss of $130.1m incurred in the same period of 2022.

Diluted net income per share also reflected this positive trend.

In the second quarter of 2023, the diluted net income per share reached $0.84, a substantial improvement from the diluted net loss per share of $1.14 reported in the prior year’s quarter.

Meanwhile, Wynn recorded an adjusted property EBITDAR of $524.5m, up 192 % on the group’s Q2 2022 result.

This robust performance was underpinned by notable increases in operating revenues across various segments of Wynn Resorts’ portfolio.

News nugget

In particular, Wynn Resorts showed impressive growth in its Macau operations as post-Covid normalisation continued.

Operating revenue at Wynn Palace soared by a staggering 698% to $468.4m in Q2 2023.

Wynn Macau also contributed to this upward trajectory, with operating revenue reaching $301.6m. This figure marked a 414% increase compared to Q2 2022.

In the US, however, growth slowed. The company’s Las Vegas operations generated operating revenue of $578.1m, up 3% on Q2 2022.

Encore Boston Harbor reported revenue of $221.9m in the second quarter of 2023, an increase of 5.6% compared to the second quarter of 2022.

“Our second quarter results reflect continued strength in North America and Macau,” said Craig Billings, CEO of Wynn Resorts. “In Macau, the post-COVID recovery accelerated during the quarter.

“We were encouraged by the meaningful uptick in visitation and demand we experienced during the quarter, with particular strength in mass casino drop, direct VIP turnover, luxury retail sales, and hotel revenue, all above Q2 2019 levels,” he added.

Moreover, Wynn will begin construction on Wynn Al Marjan Island, “which we believe will be a ‘must see’ tourism destination in the UAE,” said Billings.

The group’s online division, Wynn Interactive, generated a loss of $25.7m in Q2 2023, compared to a loss of $57.3m in Q2 2022.

Billings commented: “Our EBITDAR burn rate decreased both sequentially and year-over-year to $15m in Q2 2023. Our team continues to stay disciplined on costs, while driving improved marketing efficiency.”

Best quote

“I see tremendous value in our business, and I know our brightest days are ahead of us. Our path is the clearest it has been in years, and our team is committed and energised.”
Wynn CEO Craig Billings

Best question

Wynn did not offer many insights into its online segment, so Chad Beynon from Macquire asked for some more details. He also asked whether Wynn was on track to turn the segment profitable during Q4.

Billings responded: “I don’t think we ever said it would breakeven in the fourth quarter. But what we are focused on is making sure that it goes down every quarter.”

CFO Julie Cameron-Doe added: “Sports betting is a tough business. It’s about the game of commodity, but we’re very focused on managing this business. We’ve got a very long-term shareholder-friendly view on it. So that’s our focus.”

Current trading and outlook

Wynn Resorts saw a slight uptick in trading after presenting its results.

Billings emphasised a significant shift in the company’s business dynamics, where a larger portion now comes from mass-market customers compared to VIP clients.

Notably, on the mass-market side, there has been a decrease in the average length of stay, which is understandable given the impact of Covid-19.

“During Covid, if you made the commitment to come, you were coming for an extended period, but we’ve seen spend per customer actually go up,” he added.

This shift has led to a strategic advantage, said Billings, allowing for more efficient utilisation of their accommodations and ultimately benefiting overall business performance.

New Yorkers placed a total of $800.8m in online sports wagers during July – a record monthly low since the regulated sports betting market opened in January.

This represents a drop-off of 23.8% from the $1.05bn wagered in June and cements July as the first month with handle below $1bn, according to data from the New York State Gaming Commission.

Meanwhile, gross gaming revenue (GGR) from mobile sports betting climbed marginally by 1.2% from $72.4m in June to $73.3m in July.

However, the reduced handle should not be seen as a sign that punters have lost their appetite for mobile sports betting. The dip in handle is simply due to seasonality, US iGaming experts confirmed to iGaming NEXT.

Both spring and summer are traditionally quieter months in the US sports wagering calendar due to a lack of major sporting events as bettors await the start of both college football and the NFL.

Breaking down July performance by operator, Flutter Entertainment-owned FanDuel retained top spot, reporting $39m in revenue from monthly handle of $347.7m.

DraftKings came in second with $15.8m in revenue from $213.5m in handle, while the Caesars Sportsbook followed in third place with $8.7m and a $118.2m handle.

BetMGM generated $6.3m in revenue and processed $73.2m in total wagers during July. Elsewhere, PointsBet posted $1.7m in revenue and a $16.5m handle while Rush Street Interactive was next with $1.2m in revenue of $20.3m in total player wagers.

Wynn Interactive posted $431,990 in revenue and a $6m handle, while Resorts World followed with $262,309 in revenue from $4.7m in wagers.

Bally Bet, which went live in New York in July, recorded revenue of $40,080 and a $640,397 handle.

UK-licensed social betting start-up BetBull will close down on 3 July 2022.

BetBull was founded five years ago and caught the attention of US casino giant Wynn Resorts, which invested $80m in a joint venture with BetBull back in 2020.

This saw the start-up join the ranks of digital arm Wynn Interactive, as Wynn took a 71% stake in the JV. The remaining 29% was split between BetBull investors.

Wynn bought BetBull at a time when investors were eager to see publicly traded gambling companies take hold of their own product journey by buying proprietary tech.

However, market dynamics have changed substantially since then and the JV turned out to be short-lived.

The Wynn Interactive website says: “At BetBull you Never Bet Alone in the UK with our innovative platform that allows players to enjoy the shared experience of being part of the winning team.

“BetBull appeals to experienced punters and the new generation of bettors through social sports betting technology that combines free-to-play game mechanics with a mobile and social-first design.”

BetBull have made the difficult decision to cease operations, effective 03/07/2022.

Please find the FAQ section in the link below for more information.

— BetBull (@betbull) June 20, 2022

BetBull confirmed the closure on Twitter. It did not provide a specific reason for the closure but did post a list of FAQs to confused customers.

The platform will stop taking bets from 24 June, and has already stopped accepting deposits.

Withdrawal functionality will be live until 3 July. Open bets on events that are set to complete before 26 June will be settled in full.

However, open bets that are due to complete after the 26 June date will be voided with the original stake returned to the customer. This will be disappointing for users with ante post positions on the platform.

BetBull marketing director Paul Archer said on LinkedIn: “This week BetBull will cease trading; it has been a great journey – seeing the brand take it first bet to its last.

“I had the pleasure of working with some amazing and talented people – many of which are now seeking their next opportunity; if you have open roles in CS, RG/AML, Ops, Marketing or others within gaming then these great people are now available.

“Thanks to everyone for their efforts in the past years and a special thanks to those I worked most closely,” he added.

BetBull, which was registered in Malta, aimed to combine sports betting with a social network. It allowed users to follow tipsters, match their bets and join group bets with friends.

It was popular among bettors in the UK market, where it recruited brand ambassadors including social media personality the Racing Blogger, AKA Stephen Power, and former footballers such as Eric Cantona, Ray Parlour and Darren Bent.

This is a really good point on BetBull. Adverts with Cantona, being heavily promoted by the Racing Blogger at Ascot and all whilst knowing they (and presumably the GC) knew they were shutting up shop very soon.

— Smart Betting Club (@SBCinfo) June 23, 2022

FanDuel has continued to extend its sports betting market share lead in New York this month, having reached total handle of $1.39bn since launch on 8 January.

During the week ended 13 March, FanDuel handled more than $173m in bets, generating $17.5m in revenue and putting the brand well ahead of its nearest competitors.

Caesars Sportsbook, which took an early lead in the market thanks to the deployment of New York’s most generous introductory bonus offers, has since slipped to second position overall for both handle and GGR.

Examining the numbers week-by-week, however, Caesars handled just $66.9m in bets in the week ended 13 March, while DraftKings, which is still behind overall since the market’s launch date, handled $103.1m.

For the three weeks prior to that period, Caesars handled under $70m in bets each week, while DraftKings handled between $87.4m and $93.9m each week.

Caesars’ current handle and revenue levels are a far cry from its best ever week in the market, the seven days ending 23 January, during which it took $229.7m worth of bets. That figure still represents the most wagers handled by any single operator during one week in New York’s regulated sports betting market.

With Caesars’ hold on the market starting to slip, it now appears DraftKings is poised to take over the number two spot for total wagers handled since launch – with Caesars’ taking $1.08bn worth of bets to date and DraftKings only slightly behind on $952.6m.

Caesars’ reduced market share is likely the result of a recent curtailing of its US marketing efforts, after CEO Tom Reeg claimed the brand had already surpassed its online gaming market share targets. Its lucrative sign-up offers have also dried out and there is sentiment in the market that the product is inferior to the sportsbooks offered by FanDuel and BetMGM, for example. 

BetMGM is another operator managing to carve out a significant proportion of market share, generating $10.6m in GGR from $311.9m in wagers since joining the market two weeks after it launched.

PointsBet and Rush Street Interactive (BetRivers) have handled $96.9m and $89.1m in bets respectively since launch, while Wynn Interactive and Resorts World Bet have handled just $9.6m and $2.2m, respectively.

Bally Bet is the only licensed brand yet to join the market, but said in January that it had no intention of launching in the state until April, calling the current levels of marketing and acquisition costs “insane”.

Overall, New York State’s legalised online sports betting market has generated $274.6m in revenue from $3.93bn in wagers between its January launch and 13 March, a period of around nine weeks.

These figures suggest average weekly handle in the state of $436.3m, giving an annual market value of approximately $23bn.

WynnBet has today (4 February) become the seventh operator to launch its online sportsbook in the state of New York.

The Empire State launch means New York is the eighth state in which WynnBet’s online website and app is available to sports bettors, joining Arizona, Colorado, Indiana, Michigan, New Jersey, Tennessee and Virginia. 

The brand is offering new customers in the state a promotional deal, allowing them to place a $10 first-time wager and receive $200 in free bets.

Bettors will also gain access to Wynn Rewards and the opportunity to win real-life experiences and benefits to be used at Wynn Resorts properties, suggesting the brand hopes to create cross-sell opportunities between its online and land-based offerings.

“WynnBet beginning operations in New York is a monumental step in the growth of our company,” said Ian Williams, president of Wynn Interactive.

“New York represents a significant population of our Wynn Rewards membership and we are confident in our ability to compete in this market by providing the first-class service and gaming experiences synonymous with the Wynn Resorts brand.”

Hey New York, @Edelman11 has a message for you 🤌

— WynnBET (@WynnBET) February 4, 2022

The operator is relatively late to the party in New York, where betting handle easily surpassed the $1bn mark after just 16 days.

In fact, the state’s top three performing operators so far – Caesars, FanDuel and DraftKings – surpassed that milestone between them.

BetRivers and BetMGM, the other two operators live in New York during the period, handled just $62.8m combined, although Rush Street Interactive’s BetRivers brand had quite the headstart on BetMGM by going live on day one (8 January). 

PointsBet subsequently joined the race for market share on 25 January. With WynnBet’s entry, only two of the nine originally approved operators are still to enter the fray; Bally Bet and Resorts World.

Last week, Wynn Resorts was rumoured to be considering a sale of its online betting division, Wynn Interactive, for as little as $500m, an enormous discount compared to its once-touted $3.2bn valuation.

The operator continues to expand its land-based footprint globally, however, and recently became the first operator to make plans for a gaming resort in the United Arab Emirates.

Wynn Resorts is seeking to sell off its digital gambling arm at a heavily discounted valuation of $500m, according to the New York Post.

The newspaper believes the Las Vegas operator is quietly looking for buyers for its Wynn Interactive business unit, which operates the WynnBet app, at an asking price well below its once-touted $3.2bn valuation.

In May of last year, Wynn announced plans to spin off its online division on the Nasdaq via a SPAC deal with Austerlitz Acquisition Corp.

The merger would have created a new entity with a combined value of $3.2bn, while injecting $640m in cash into Wynn Interactive’s coffers as the firm looked to fund its online sports betting expansion. 

The cash was expected to be used to fuel a branding and marketing campaign aimed at bolstering the online operator’s growth.

However, the deal fell through in November after Wynn announced it had changed its sports betting strategy to preserve cash, instead of burning through it with customer acquisition offers and above-the-line marketing activations. 

Outgoing Wynn Resorts CEO Matt Maddox said during the operator’s Q3 2021 earnings call: “Competitors are spending too much to get customers. And the economics are just not something that we’re going to participate in.”

Indeed, leading operators in the US have taken acquisition spend to the extreme, with Caesars offering bonuses worth up to $3,300 in the newly launched New York market, and US market leader DraftKings spending $303.7m on sales and marketing alone in Q3 2021, despite generating just $212.8m in revenue.

Wynn went on to say it would cut spending in 2022 and focus on acquiring profitable customers, using its existing customer database and brand as the foundation of its strategy moving forward.

Preliminary figures from New York, which is likely to become the largest sports betting market in the US, show that Caesars, FanDuel and DraftKings held a market share of more than 98% combined in the eight days following launch, with fourth licensee Rush Street Interactive capturing just 1.76% via its BetRivers brand. 

Wynn has also been awarded a licence to operate mobile sports betting in New York, but is yet to launch a product in the state.

With established operators entering the market for a significant head-start, and Wynn’s reluctance to invest in customer acquisition, it remains to be seen what proportion of the state’s predicted $2.2bn in annual revenue the operator can capture.