Steve Wynn ‘confused’ by local revenue drop

Wynn Resorts Ltd. reported that the company’s net revenue for this year’s third quarter declined 1.4 percent to USD1.37 billion, mainly due to a 5.6 net revenue decrease in their Macau operations. The VIP segment table games’ turnover in Macau operations decreased 17.4 percent.
In a press release, Wynn Resorts said that in the third quarter of 2014, net revenues of its Macau operation amounted to USD942.3 million, representing a 5.6 percent decrease from USD997.6 million generated in the third quarter of 2013.
Las Vegas operations’ net revenues look brighter as the company experienced a 9.0 percent increase over the same period last year. Net revenues in its Las Vegas operations amounted to USD427.8 million by the end of September.
The company’s chairman Steve Wynn told analysts that at his Wynn and Encore properties in Las Vegas, he raised room rates by 18 percent last month. Revenues collected through the hotel and casino, as well as through food, beverages and entertainment, had all increased at these resorts.
The casino company, founded by Steve Wynn, posted third-quarter results that exceeded analysts’ projections, paced by stronger revenue in Las Vegas, Bloomberg reported.
However, revenues were affected by three difficult months in Macau, as gaming revenues have been consistently dropping.
Table games turnover in Wynn Macau’s VIP segment amounted to USD25.1 billion for the third quarter of 2014, a 17.4 decrease from USD30.3 billion in the third quarter of 2013.
VIP gamblers have been shying away from Macau casinos amid the central government’s crackdown on corruption, AP reported. Experts and gaming operators have recognized that the political unrest in Hong Kong, and mainland China’s halt on group visas for Hong Kong-bound tourists, have also been affecting Macau.
The turnover of table games in the mass market experienced a 36.4 percent increase to USD327.2 million. The company also recorded a mass market table games win per unit per day increased by 38.0 percent to USD17,759.
The drop in the mass market segment was USD641.2 million, up by 1.7 percent from the 2013 third quarter.
The slot machine handle of USD1.4 billion for the third quarter of this year was 23.2 percent above the prior-year quarter. Slot win increased 31.9 percent when compared to 2013’s third quarter.
The company said that occupancy rate at Wynn Macau reached 98.5 percent, as opposed to 95.8 percent recorded in the prior-year period. Revenue per available room rose 8.4 percent to USD322 in 2014’s third quarter.
Wynn Resorts added that non-casino revenues, before promotional allowances, increased 1.4 percent to USD99.1 million.
In a conference call to discuss the third quarter results, Steve Wynn, chairman of Wynn Resorts, expressed his confusion about the political turmoil in Hong Kong and the smoking ban in Macau. “The new smoking regulations, the turmoil in Hong Kong in October, and of course, the aggressive policies of the central government about what appeared to be misconduct and corruption in the government (…) has had an impact on Macau in October, we all noticed it,” he told analysts, acknowledging that the scenario is looking even worse this month.
The company is currently developing its first Cotai resort, thr Wynn Palace. In a press release, it recalled that the fully integrated resort – featuring a 1,700-room hotel, performance lake, casino and spa, among other offerings – is set to open during the first half of 2016. The total project budget, including construction costs, capitalized interest, pre-opening expenses, land costs and financing fees, amounts to approximately USD4.1 billion.
Over this third quarter, the company invested about USD301.1 million in its Cotai resort.  In July, Macau’s Commission Against Corruption (CCAC) launched an investigation into a land deal that allowed Wynn Resorts to acquire the land for its Cotai resort. The Wall Street Journal (WSJ) reported in 2012 that the deal had been suggested by Macau’s then-Chief Executive, Edmund Ho and that it involved a USD50 million payment from Wynn to a Macau company with ties to a close associate of the top official and to members of an important Beijing family, WSJ reported.
Wynn Resorts Ltd. yesterday released financial results for the third quarter of 2014 ending in September.  MDT/Agencies