How Much Can Wynn’s Boston Casino Generate In Revenues?

by Trefis Team
Wynn Resorts
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Wynn Resorts (NYSE: WYNN) has seen solid growth over the past few years. The company’s revenue grew by nearly 24% annually and its stock price increased by about 14% between 2015 and 2017. We attribute this growth primarily to jump in overall Macau casino revenue and a full operational year of Wynn Palace, its newest property in the Cotai region. Wynn is currently developing a $2.5 billion property in Boston, and expects its latest property – Encore Boston – to be open by mid-2019. Further, we expect the overall contribution from the domestic segment to increase from about 27% to nearly 36% in 2020, largely due to significant contribution from its Boston property.

Based on recent market trends, stable growth in Macau, ongoing development in Las Vegas, and the opening of Encore Boston, we forecast Wynn Resorts to report 6-7% annual revenue growth in the next three years, from $6.8 billion in FY 2017 to just over $8 billion in FY 2020. Of the estimated $1.25 billion incremental revenues, we estimate that the Boston resort will contribute just over 71%, or $893 million. We have summarized our expectations on our interactive dashboard on Wynn’s Boston Outlook through FY’19 and FY’20. If you disagree with our forecasts, you can change the key drivers for the segment to gauge how changes will impact its expected revenue. Below we take a look at the key drivers for this revenue stream.

Estimates for Key Growth Drivers

The company expects to open Encore Boston in second half of 2019, and will be the biggest gaming facility in Massachusetts when opened. We expect robust contribution from the Boston property, owing to solid demographics which should provide for significant medium term growth, and its market position should benefit from both international and domestic visitations.

  1. Solid Boston Demographics – Massachusetts has nearly 7 million people, and is the third most densely populated state in the U.S. Its mean per capita income is also notably higher than the U.S. average. We expect this to play a vital role in driving robust revenue growth.
  2. Market Position – Encore Boston is set to be the biggest gaming facility in Massachusetts, and given its market position, it should capture demand from the Boston area as well as the rest of New England. It should also attract tourists, business travelers, and conventioneers. As a result, we expect significant domestic and international visitations.

Consequently, we expect the company to report revenue of around $508 million in 2019 and about $893 million in 2020. This should drive Encore Boston contribution to about 11% to Wynn’s overall revenue and should boost its domestic revenue in the medium term.

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