A 77.5% year-on-year drop in revenue to $370.5m and a hefty tax provision meant Wynn Resorts swung to an $831.5m net loss in the third quarter of 2020.
The operator made $201.9m from gaming, down 81.8%. Rooms brought in $61.1m, while food and beverages contributed $76.6m and entertainment, retail and other revenue came to $30.8m, all down more than 70%.
Wynn Palace in Macau, traditionally the operator’s main source of revenue, brought in only $15.7m, down 97.4% year-on-year as the Macau market as a whole struggled due to travel restrictions. Similarly, the Wynn Macau property brought in just $51.4m, down 89.2%.
However, chief executive Matt Maddox said the Macau locations began posting positive earnings following the end of the quarter, and so he does not expect these struggles to be long-term.
“In Macau, visitation restrictions have begun to gradually and thoughtfully ease, allowing us to achieve EBITDA [earnings before interest, tax, interest and depreciation] break-even in October,” he said. “We are confident that Macau will continue to benefit from the return of consumer demand as we head into 2021.”
The operator’s Las Vegas operations therefore made more than in Macau, bringing in $186.7m, down 53.3%. It noted that in Las Vegas, its margins were lower than its projected range, but up slightly year-on-year.
Wynn’s Encore Boston Harbor venue was by far its most resilient, bringing in $116.7m, though this was still down 33.6%.
“We are encouraged by the progress we have made in each of our properties over the past several months, despite the ongoing impact of the virus and related operating limitations,” Maddox said.
“Encore Boston Harbor delivered record quarterly EBITDA during the third quarter, while Wynn Las Vegas continued to experience strong leisure demand on weekends with solid hotel occupancy and casino play.
Wynn’s operating expenses were also significantly down, by 55.6% to $653.4m, but easily outpaced revenue.
The largest of these costs were casino, down 77.8% at $160.9m, general and administrative costs, which declined 34.7% and also came to $160.9m, and depreciation and amortisation costs, which grew year-on-year by 6.1% to $183.5m.
This resulted in an operating loss of $283.0m, compared to a $177.8m operating profit in Q3 of 2019.
After financial income, Wynn’s pre-tax loss came to $424.2m, after a pre-tax profit of $46.6m the year before.
The business then paid $407.4m in provisions for income taxes, due to the fact that it no longer expects an increase in tax-free allowance for certain assets to take effect.
This meant it made an $831.5m net loss, after having made a $26.8m profit in 2019.
Despite the losses, chief executive Matt Maddox said the results showed encouraging signs of recovery.
Maddox added that the quarter saw major steps for WynnBet, its Scientific Games-powered igaming and sports betting product, which launched in New Jersey during the quarter.
“On the development front, we have made substantial progress advancing Wynn Interactive, our majority owned sports betting and online gaming subsidiary,” he said.
“During the third quarter, we launched online sports and casino offerings in New Jersey to an encouraging initial customer response. Beyond New Jersey, we have secured market access in numerous other states, and are in the process of applying for licenses on a standalone basis in Tennessee and Virginia.
“We are also in discussions with potential partners regarding additional access agreements in other jurisdictions. Our nationally-recognized brand and unique product-led strategy position us well to generate our fair share of this important, fast-growing business over the coming years.”
The loss in Q3 follows a $1.04bn net loss in the first half of the year, when revenue declined 68.6%, also to $1.04bn.