MGM, Wynn revenue in China grows 900% in Q3

• Daniel Horvat
• November 14, 2023

MGM Resorts and Wynn Resorts are reporting unrivaled growth of revenue of their China operations, 900% in Q3 2023 compared to the same period last year. Las Vegas Sands is also reporting significant growth. This comes as a consequence of the Macau gambling market fully reopening and reaching not only pre-pandemic levels but better, with an improved player quality.

MGM Resorts subsidiary MGM China saw their casino revenue grow 900% while the overall net revenue grew 829% in Q3 2023 compared to the same period last year. The post-pandemic recovery of Macau saw MGM Resorts now post even better numbers than before the pandemic. Overall, MGM Resorts International saw a consolidated net revenue increase of 16%.

The MGM Resorts President and CEO Bill Hornbuckle said that “MGM China is performing exceptionally well, and we have a pipeline of development opportunities including New York and Japan alongside the growth and development of our international digital business”.

Wynn Resorts also reported growth, an 87.9% rise in revenue to $1.67bn in Q3 that was also because of the spike in revenue in Macau as both Wynn Palace and Wynn Macau properties reported growth. Wynn expects continued growtih in Macau and is also eyeing other markets such as United Arab Emirates, where construction work continues on the $3.90bn Wynn Al Marjan Island property. According to CEO Craig Billings, the region represents the most exciting new market opening in decades.

For Wynn, casino was by far the main source of revenue, and it increased 170.2%, while rooms revenue, food and beverage revenue, and retail and other revenue all grew but not by as much. As a whole, revenue grew 87.9% but the vast majority of that revenue was driven by the casino business.

Wynn Palace revenue increase 597.9% in Q3 compared to last year, and Wynn Macau reported a growth of 630.2%. Meanwhile, the Las Vegas operations of two Wynn properties saw a growth of 13.7% compared to the same period last year, that seems miniscule compared to Macau growth but is still very significant and indicative of the entire gambling industry recovery after the pandemic.

The reopening of Macau also led to higher costs, as Wynn reported a 70.7% increase in total operationg costs. Wynn ended the three quarters with a net profit of $0.83m, compared to a $456m loss in nine months last year.

Macau is now the biggest driving force of Wynn, as their Boston operations and Wynn Interactive were both down. Wynn Interactive has made a significant drop from a loss of $27.1m last year to a loss of $209m this year.

Despite the seemingly positive numbers, the traders don’t seem to be so keen on the prospects of Wynn as the stock price experienced a 5% decline. Investors are most likely reacting to the broader market dynamics and considerations behind the Q3 performance of Wynn and aren’t too impressed by the China numbers as this positive development has already been priced into the share price in recent months after the January reopening of Macau.

MGM Resorts International owns two properties in China, MGM Macau and MGM Cotai, which is a small number compared to the number of properties they own in Las Vegas and elsewhere in the US, but it is these two that are responsible for the biggest slice of the pie as the Macau market recovers post-pandemic.

MGM Resorts owns fourteen properties in Las Vegas, including Bellagio, MGM Grand, Mandalay Bay and many more. In the other US states the company owns a total of seven properties at select locations, such as MGM Springfield and MGM National Harbor.

BetMGM is one of the largest online players in the country as the legal landscape opens to regulated sportsbooks and casinos. The digital subsidiary is very active and is entering all the US states where it is possible to do so with their top-notch digital product. BetMGM is one of the few companies that realized that market penetration with a sportsbook means easy placement of the casino product on the same platform once that is made available in a given state. At the moment, BetMGM sports betting is available in 23 states, while casino is available in four: Michigan, New Jersey, Pennsylvania and West Virginia.

Las Vegas Sands, a company that now only owns Macau properties, is also reporting stellar numbers recently. Revenue of the Sheldon Adelson company tripled compared to the same quarter last year and, unlike MGM and Wynn, the Sands stock price rose 5% after the announcement.

The Macau is now seeing a healthier profile of players as the Chinese government cracked down on so-called junkets – organized tours that have a purpose to help high rollers evade capital controls and move large amounts of money back and forth across the border. Now, it is the average thrill-seeking tourist with disposable income that is the most common visitor to Macau. And revenue has skyrocketed as a result of these players being so numerous and probably not being very good at gambling – at least not as good as high rollers were.

Meanwhile, Las Vegas has only half of Macau’s revenue, only further reinforcing that Macau is the strongest single gambling market today. Those companies that have a strong presence there are seeing record numbers that can’t be rivaled by any other, new or emerging, market.