Wynn Resorts (NASDAQ:WYNN) will report its Q1 2014 earnings on May 1. Macau gaming revenues have shown strong growth this quarter driven by more visitors flocking to the gambling capital. VIP gaming grew by 13% and accounted for more than 63% of the gross gaming revenues in Macau during the first quarter.  It must be noted that VIP gaming contributes more than 50% to Wynn’s value, according to our estimates.
Recently, Las Vegas Sands (NYSE:LVS) posted strong growth in its Macau operations and we expect Wynn to also benefit from the Macau growth in the first quarter. One of the important factors of Wynn’s performance is the VIP table games win percentage, which usually is in the range of 2.7% to 3%. It declined in the previous quarter to 2.92% as compared to 2.96% in the prior year period.  We are eager to see how this win percentage trends in the coming quarters.
Wynn will also benefit from the mass-market gaming, which is growing strongly in Macau. During the first quarter, overall Macau mass-market gambling revenue surged 39% compared to the prior year period.  We expect Wynn to see healthy growth in this segment. This is an important segment for casino operators as it yields significantly higher margins than VIP gaming.
We’ll also be looking forward for any updates on Everett casino plans. Wynn wants to develop a casino in Everett, Massachusetts and it has announced new deals to reduce the impact on surrounding communities. 
Wynn Will Benefit From Macau Growth
Macau has seen solid growth in the first quarter. Gross gaming revenues were up 20%, amounting to $12 billion.  The strong growth was driven by an increase in the number of Chinese visitors. According to a data released by Macau Government Tourist Office, more than 770,000 mainland Chinese visitors traveled to Macau during the New Year holidays from January 31 to February 6, reflecting an increase of 23% from a year earlier.  Wynn will benefit from the growth in Macau as it has established an image of a premium casino and this has helped the company to attract more VIP players. However, casino operators are now focused on capturing the mass-market gaming primarily due to higher margins. In the previous quarter, the company gained 35% in mass-market table games win.  We expect Wynn to post double-digit growth in this segment driven by the higher visitation in Macau.
Las Vegas Operations To Stay Muted
According to our estimates, Las Vegas operations contribute more than 13% to Wynn’s value. Wynn’s Las Vegas operations witnessed steady growth in the previous quarter. Casino revenues increased 12%, primarily due to better table games win percentage as well as overall growth in Nevada gaming.  In 2013, the state’s casino industry collected $11.14 billion in revenues, up 2.6% from 2012.  This was the state’s best collection since 2008. However, for the months of January and February 2014, gaming revenues declined by 3% and 14% respectively.   Las Vegas Sands witnessed more than 31% decline in its Las Vegas casino revenues during the first quarter (Also Read – Las Vegas Sands’ Earnings Jump 38% As Cotai Booms). We expect Wynn’s Las Vegas operations to stay muted for the quarter.
- Q1 mass-market baccarat revenue MOP28.49 bln, Macau Business, Apr 16, 2014 [↩] [↩]
- Wynn Resorts’ SEC Filings [↩] [↩] [↩]
- Wynn Resorts nails down deals with four nearby cities, Boston Herald, Apr 29, 2014 [↩]
- MACAU CASINO GAMING REVENUE UP 20% IN Q1 ON MASS MARKET SURGE, Calvin Ayre, Apr 16, 2014 [↩]
- Visitor arrivals hit one million in Spring Festival Golden Week Year-on-year increase of 13%, Macau Government Tourist Office, February 7, 2014 [↩]
- Baccarat helps drive Nevada gaming revenue to $11 billion in 2013, Review Journal, Jan 31, 2014 [↩]
- Nevada gambling revenues down 2.7 percent in January, Las Vegas Sun, Feb 28, 2014 [↩]
- Vegas Wire: Nevada gambling revenue down 14% for February, Press of Atlantic City, March 2014 [↩]