Wynn Resorts Suffer Heavy Losses In Q2 Due To Macau Crackdown
The crackdown in the world’s largest gambling hub Macau has now passed the one year mark. As we have reported extensively the once undisputed playground for Chinese VIP‘s and high rolling officials has been the subject of a sustained crackdown of public corruption by the Chinese Government.
What many thought would be a short lived campaign has become fixed policy set to say. This has resulted in gaming companies in the former Portuguese colony losing billions of dollars in the last year. Their emphasis has now shifted to focusing more on their resorts and not relying solely on gambling revenues.
Casino operator Wynn Resorts is just one of these companies that have been hit hard by the crackdown. They have just released their second quarter revenues which were down from $1.4 billion to $1 billion in the same period last year.
Wynn Resorts credit the significant loss in their earnings to the disappointing performance of their Macau Business. EBITDA dropped 37.8% on a year-on-year basis to $295.4 with operating income dropping from $341.3 million last year to $169.1 million in Q2 of 2015.
Wynn’s disappointing results were also due to losses in Nevada, the main blow came from their Macau operation that saw operating income fall from $217.7 million in Q2 last year fall to $93.3 million this year. This means that net revenues for Wynn for the first six months of June this year is $2.1 billion which is a far cry from the $2.9 billion in the same period last year. Operating income dropped from $718.2 million to $354.2 million for the first half of the year as well.