Wynn captures Thailand and UAE markets

Wynn Resorts CEO Craig Billings recently revealed two significant developments. Firstly, the company intends to construct an integrated casino resort (IC) in Thailand, following the country's recent advancements towards regulation. Additionally, Billings provided updates on the progress of an IC project in the United Arab Emirates (UAE) during the second quarter.

Speaking on a post-second-quarter earnings call, Billings responded positively to a question about Wynn's progress in Thailand, where the government this week released draft rules for legal casinos. 

Is Wynn eyeing Bangkok?

Billings had previously discussed Wynn's interest in Thailand after the company's first-quarter results earlier this year. 

With the legal gaming market in Thailand progressing, he noted that Wynn has begun "actively" operating in the region, with Bangkok being considered as a potential location for an initial public offering (IPO). 

"Yes, we are planning to transition Wynn Resorts from being a U.S.-listed company," Billings mentioned during the call. "It's still early, but we're witnessing positive developments, and it seems the Thai legislators are eager to advance this initiative, which is promising."

He acknowledged that while there's a need for more information on regulatory and licensing frameworks, the Thai market presents an appealing opportunity. "Thailand boasts an excellent tourism infrastructure, a robust service culture, and a favourable cost structure for operations. Therefore, we are closely monitoring the situation and actively pursuing entry into the market."

Wynn's fantastic future in the UAE

In Q2, Billings also outlined the progress Wynn has made on its UAE IR project.

Wynn Al Marjan Island, due to open in early 2027, will be located in the emirate of Ras Al Khaimah. It will cost around $3.9bn (£3.1bn/€3.6bn) and will be the first IR in the Middle East and North Africa (MENA) region.

New images and renderings of the project were released in May, and Billings said he recently spent several weeks in the region, stating that construction is progressing “at a rapid pace”.

“The structure now reaches a height of just over 90 metres, making it the tallest building in the emirate,” he stated. “In the second quarter, we added $357 million to the total equity of our joint venture in the UAE, which included acquiring a 40 percent proportional interest in all 155 acres of Island 3, home to Wynn Al Marjan." 

“As a result, our joint venture now possesses not only the land beneath Wynn Al Marjan, but also an extra 70 acres for potential future development on the island.” 

Billings highlighted that the UAE provides access to a global customer base. While he emphasised that Europe will be a significant market for Wynn Al Marjan, he also pointed out that India is another crucial market. 

“India represents a vast market in that region,” Billings noted. “Its population is large, with substantial wealth, making it a vital area for us. There are other regions in Asia that present significant market opportunities for the UAE."

“I believe the scale of our UAE project might surpass any other undertaking we’ve pursued, potentially comparable to Las Vegas, especially considering Europe’s considerable population and the ease of travel to the UAE.”

Fly in the ointment: Wynn has not yet received a licence in the UAE

Billings reiterated that the UAE is the most exciting new market for the gambling industry in decades, helped by the creation of the General Commercial Gaming Authority (GCGRA) as the federal regulator for the market, he said.

Billings cited last week’s news that GCGRA had selected The Game LLC to operate the UAE’s first national lottery. The Wynn CEO said that should provide “comfort” for further progress in the UAE.

However, there has been no movement on Wynn’s Ras Al Khaimah licence.

“I would assume they will move on to the next step in the licensing process,” Billings said. “I don’t have a timeline, but you can see it all happening.”

Revenue growth in Q2

Examining Wynn’s Q2 performance, the group's revenue for the three-month period ending June 30 reached $1.73 billion, reflecting an 8.6% increase compared to the prior year. Casino revenue amounted to $1.01 billion, while rooms revenue stood at $304.5 million. Food and beverage revenue totalled $281.4 million, with entertainment, retail, and other revenue contributing $138.1 million—this last category being the sole segment to experience a year-over-year decline.

When breaking down revenue by segment, the primary contributors were Wynn Palace and Wynn Macau in Macau. Wynn Palace saw a 17.0% rise in revenue to $548.0 million, benefiting from a 23.6% win rate in table games and a 4.1% win rate in VIP games. Wynn Macau reported an 11.8% revenue increase to $337.3 million, although the win rates for mass-market table games and VIP games dropped to 17.5% and 2.2%, respectively, compared to last year.

In the United States, revenues from operations in Las Vegas reached $628.7 million, marking an 8.8% increase. However, the win rate for table games dipped slightly to 21.9%, down from 22.9% in the previous year. Conversely, Encore Harbor in Boston experienced a 4.2% decline in revenues, totalling $212.6 million, with the table game win rate aligning with expectations at 19.6%, though still lower than last year’s figures.

Wynn Sets Record EBITDAR in Q2

On the expense front, total operating expenses rose by 8.8% to $1.46 billion. Nevertheless, revenue growth contributed to a 7.8% increase in operating income for Q2, reaching $269.7 million. Wynn also incurred $115.5 million in non-operating expenses, leading to a pre-tax income of $154.2 million, which represents a 17.0% increase. The company allocated $7.9 million in discounts related to $34.3 million in gains from non-controlling interests.

Consequently, the second quarter concluded with a net income of $111.9 million, reflecting a 6.4% rise. Furthermore, adjusted EBITDAR saw a 9.0% increase, totalling $571.7 million, marking a new record for Wynn in the second quarter. "Our Q2 results, highlighted by a new adjusted EBITDAR record, demonstrate the ongoing strength of our operations," stated Billings. "I am extremely proud of our teams in Las Vegas, Macau, and Boston."

Revenue for the first half of the year increased by 19.1%

Reviewing the first half of the year overall, the group's revenue rose by 19.1%, reaching $3.60 billion, with casinos generating $2.13 billion of that total. Wynn experienced growth across all sectors except for entertainment, retail, and other areas. 

Operating expenses increased by 14.0%, totalling $2.96 billion, while operating income surged 50.7% to $632.6 million. The company also recorded $281.9 million in non-operating expenses, leading to a pre-tax income of $350.7 million, which is a rise of 161.1%. 

The group paid $27.9 million in taxes and reported $66.6 million in gains from non-controlling interests. Consequently, the first half concluded with a net income of $256.2 million, representing an increase of 118.0%. Additionally, adjusted real estate EBITDAR saw a significant increase of 27.6%, reaching $1.22 billion.