The gaming industry is showing signs of recovery as two of the leading casino operators, Wynn Resorts and MGM Resorts, reported strong earnings results for the third quarter of 2023. Both companies surpassed analysts’ estimates and posted positive net income and adjusted EBITDAR, reflecting the increased demand for gaming and entertainment in their key markets.
Wynn Resorts Reports Record EBITDAR in North America
Wynn Resorts, which operates casinos in Macau, Las Vegas, and Boston, reported operating revenues of $1.67 billion for the third quarter of 2023, an increase of $782.2 million from $889.7 million for the same period last year. The company also reported net income attributable to Wynn Resorts of $116.7 million, compared to a net loss of $142.9 million for the third quarter of 2022. Diluted net income per share was $1.03, compared to a diluted net loss per share of $1.27 for the same period last year.
The company’s adjusted property EBITDAR, a measure of profitability that excludes interest, taxes, depreciation, amortization, and rent, was $530.4 million for the third quarter of 2023, an increase of $356.8 million from $173.5 million for the third quarter of 2022. This was driven by strong performance in all of the company’s segments, especially in North America, where Wynn Las Vegas and Encore Boston Harbor delivered a new third-quarter record for adjusted property EBITDAR at $323.6 million, up 66.4% year-over-year.
“Our third quarter results reflect continued strength across our property portfolio,” said Craig Billings, CEO of Wynn Resorts. “Our teams at Wynn Las Vegas and Encore Boston Harbor delivered a new third-quarter record for Adjusted Property EBITDAR at our combined North American properties as we continue to elevate our properties above those of our peers. In Macau, the recovery continued to progress during the quarter, with particular strength in our mass gaming, luxury retail and hotel businesses. On the development front, construction on Wynn Al Marjan Island is well underway, and we are confident the resort will be a ‘must see’ tourism destination in the UAE.”
MGM Resorts Sees Growth in Domestic and International Markets
MGM Resorts, which operates casinos in Las Vegas, Macau, and other locations, reported consolidated net revenues of $3.1 billion for the third quarter of 2023, an increase of 35% from $2.3 billion for the same period last year. The company also reported consolidated operating income of $557 million, compared to a consolidated operating loss of $495 million for the third quarter of 2022. Diluted earnings per share was $0.47, compared to a diluted loss per share of $1.08 for the same period last year.
The company’s adjusted EBITDAR was $1.1 billion for the third quarter of 2023, an increase of 78% from $619 million for the third quarter of 2022. This was driven by growth in both domestic and international markets, as well as the company’s online gaming and sports betting segment, BetMGM, which reported revenues of $358 million, up 156% year-over-year.
“We delivered strong financial results in the third quarter, driven by the ongoing recovery of our domestic operations and the continued ramp-up of our online gaming and sports betting business,” said Bill Hornbuckle, CEO and President of MGM Resorts. “We are also pleased with the performance of our Macau operations, which achieved positive EBITDAR for the first time since the pandemic began. We remain focused on executing our long-term growth strategy, investing in our core business, expanding our digital footprint, and pursuing attractive development opportunities in key markets around the world.”
Gaming Industry Outlook Remains Positive
The gaming industry is expected to continue its recovery as travel and leisure demand rebounds from the pandemic-induced slump. According to a report by Grand View Research, the global gaming market size is projected to reach $516.03 billion by 2025, registering a compound annual growth rate of 10.5% from 2020 to 2025. The report cites the increasing adoption of online gaming and sports betting, the legalization of gambling in various countries, and the technological advancements in gaming devices and platforms as some of the key factors driving the market growth.
The gaming industry is also likely to benefit from the upcoming events and developments, such as the Winter Olympics in Beijing in 2024, the World Cup in Qatar in 2026, and the opening of new integrated resorts in Japan, Singapore, and the UAE. These events are expected to boost tourism and gaming spending in the respective regions, as well as create new opportunities for the gaming operators and suppliers.
The gaming industry, however, is not without its challenges and risks, such as the regulatory uncertainties, the environmental and social impacts, the cyber threats, and the potential resurgence of COVID-19 variants. The gaming operators and suppliers will need to adapt to the changing market conditions and customer preferences, as well as invest in innovation and sustainability, to maintain their competitive edge and long-term growth.
