Wynn Resorts Ltd. has reported record earnings at its Las Vegas and Boston hotel and casino properties while its troubled Macau operations came back to life during the January Chinese New Year period.
The company, which owns legal sports betting operator WynnBET saw Q4 adjusted EBITDAR rise by 31% to $195.1 million against $149.1 million in the same quarter in 2022. Revenue for the final quarter of the year hit the $1 billion mark, easily beating street expectations while profit for the period came in at $32.4 million.
This marked the first time since the onset of the pandemic that Wynn had registered a profitable quarter led to its first profitable quarter since the pandemic, executives said in a Wednesday earnings call with investors.
"These impressive results are a testament to our team’s relentless focus on delivering five-star hospitality, which continues to elevate our properties above our peers as the destinations of choice for luxury guests in both Las Vegas and Massachusetts."
For FY2022, Wynn's operating revenues totaled $3.76 billion. Operating revenues for 2022 rose impressively at Wynn/Encore ($628.5 million), Encore Boston Harbor ($139.6 million), and Wynn Interactive ($12.6 million), but decreased disappointingly by $472.7 million and $314.8 million at Wynn Palace and Wynn Macau, respectively, for 2021.
Mattress Mack payout ruins yet another sportsbook division's earnings
In what has become a standard refrain among major operators reporting fourth-quarter earnings this week, Wynn's CEO Billings said that his company's online sports betting site would have enjoyed a flat cash burn had it not been obliged to pay out $12 million to Jim "Mattress Mack" McIngvale in November on his winning Houston Astros World Series wager.
As a result, Wynn Interactive registered an $8 million Q4 year-over-year drop in operating revenue as compared to the same quarter in 2021.
"Our overall EBITDAR burn rate in the fourth quarter ticked up sequentially to $28 million due to a well-publicized World Series bet that went against us. Adjusted for that single bet, burn was roughly flat," said Billings.
However, with the expected launch of online sports betting in Massachusetts in March, Wynn Interactive's sportsbook app is expected to see a massive upswing in activity with the arrival of March Madness.
Wynn set to Expand in Boston, UAE, and possibly New York City
In addition to the added revenue that Wynn's Las Vegas properties expect to bring in from the inaugural Formula One Las Vegas Grand Prix in November 2023, the casino, resort, and sportsbook outfit is ramping up its expansion plans.
In Boston, Wynn is eagerly completing the details on its planned new retail resort facility on a 10-acre site near Encore Boston Harbor.
In addition, Wynn CEO Billings issued an important update on the company's highly anticipated new casino resort project slated to begin construction in the United Arab Emirates later in 2023. Billings noted that renderings for the luxury facility will be revealed within the next few weeks.
Finally, Wynn is one of the leading candidates bidding for one of three New York casino licenses. The company has partnered with Related Companies, one of the largest developers in the state, on a hotel and casino project to be built in the Hudson Yards in Manhattan.
Macau Chinese New Year rebound gives cause for 2023 optimism
The gaming giant also revealed that its Macau unit had experienced a significant rebound during the recent Chinese New Year period, which Billings said was a strong signal that the company had turned the corner in a region that had been hit badly by COVID.
"In Macau, we were honored to be awarded a new 10-year gaming concession during the quarter and were pleased to experience a meaningful return of visitation and demand during the recent Chinese New Year holiday period. We believe we are well-positioned for success in Macau’s next phase of growth," said Billings.
The performance of Wynn's Macau properties during the Golden Week Chinese New Year celebration was the first real indication that the global operator could see its Asian unit fulfill its potential and become a strong contributor to earnings in 2023.
Wynn's CEO did, however, walk back some of his initial enthusiasm later during the call in response to a question from UBC industry analyst Robin Farley.
"What I would say is that the market roared back, Macau was a ranger on the mass side, on the direct VIP side, on the retail side, and on the occupancy side during Chinese New Year, and it outperformed our expectations for the lull period shortly thereafter. Anything beyond that, it's just too early to read."
