Casino operator Wynn Macau’s revenue slumps 5.6pc in third quarter
Protests, smoking rules and anti-corruption drive causing impact, says Wynn chairman
Political protests have played a hand in creating the "perfect storm" for casino operators, Wynn Macau chairman Stephen Wynn said on an earnings call after the company posted an 8.2 per cent drop in net profit to US$220.87 million for the third quarter.
"The new regulations on smoking, the turmoil in Hong Kong, and of course the policy of the central government in being very aggressive about what appeared to be misconduct and corruption in the government … have had an impact on Macau. We all noticed it," Wynn said.
The casino operator announced third-quarter revenue fell 5.6 per cent to US$942.26 million, dragging down revenue at its US parent company Wynn Resorts.
"We experienced in October a perfect storm," Wynn said. "We had the lowest hold percentage for a number of weeks that we've ever experienced in China.
"When I say it's a perfect storm, it's unusual.
"It's a statistical anomaly to hold 0.9 per cent or something like that in a 2.7 per cent or 2.9 per cent gain."
The month-long democracy protests in Hong Kong, which have no clear end in sight, have led to a drop in the number of gamblers in Macau despite a surge in overall mainland tourist numbers over the National Day holiday.
Wynn said he was unsure how the protests would affect mass-market revenue.
"I wish I had an answer that I could lean on," he said. "And I'm not comfortable on this short string, not with all the other things that are going on in Hong Kong and smoking. I'm confused at the moment."
Macau's Secretary for Economy and Finance Francis Tam Pak-yuen said last week this month's gross gaming revenue would experience an even steeper year-on-year decline than last month.
Revenue fell 11.7 per cent last month to 25.6 billion patacas. Analysts are forecasting a drop of more than 20 per cent for this month.
Third-quarter turnover at Wynn Macau's VIP tables was US$25.1 billion, down 17.4 per cent from a year ago.
The company said construction of its new Cotai resort, Wynn Palace, remained on track for an opening in early 2016.
During the third quarter, Wynn Macau invested US$301.1 million in the construction of Wynn Palace, an integrated resort including a 1,700-room hotel, casino, spa, shops and restaurants.
The project's budget is US$4.1 billion, slightly more than the previous quarter's expectations of US$4 billion largely because of US$56 million in pay increases.
Macau has been experiencing a shortage of workers, with government policies making the hiring of locals a priority. The labour squeeze is expected to worsen as new resorts begin to open on the Cotai strip from the middle of next year.
