Wynn Resorts is taking a long-term view on its digital arm and isn’t prepared to call a date for breaking even, although that point is getting close, CEO Craig Billings said.
For 3Q22, the overall EBITDA burn at Wynn Interactive declined to $18 million in Q3 from $21 million in the second quarter of 2022 on the back of strong cost controls and improved marketing efficiency.
Speaking on a conference call with analysts, Billings said Wynn had had particular success in iCasino due to the Wynn brand strength.
He said the company isn’t prepared to spend billions on aggressive expansion in the division. He said the handle for the digital unit was roughly flat in 3Q22 compared with the prior year, but there had been a 90 percent reduction in marketing spend and an 80 percent reduction in burn.
“Because our initial customer cohorts continue to play with us, generating revenue, and we’re being very thoughtful with respect to user acquisition promos. With Massachusetts coming up, I would expect a modest uptick in UA, but nothing earth shattering because we have a sizable database there.”
Billings said that he doesn’t expect sports betting in Massachusetts to be mobile initially.
“So we’re not calling the EBITDA breakeven point yet. But I mean, if you look at our numbers, we’re getting pretty close,” he said.
Wynn Macau woes continue
Billings was speaking after the group reported a decline in operating revenue for the quarter of $104.9 million to $889.7 million. A strong increase in the group’s Las Vegas and Boston properties failed to offset the ongoing drag from Macau, where zero-Covid policies continue to hold back growth.
The net loss narrowed to $142.9 million from $166.2 million a year earlier. Adjusted property EBITDA rose 12.3 percent to $173.5 million.
Billings said the Las Vegas operations have turned in a record quarter in terms of EBITDA.
“We saw broad-based strength across casino, hotel, food and beverage and retail, all well above third quarter 2021 levels despite the difficult year-over-year comps. The comparison to third quarter 2019 is even more impressive with our EBITDA more than doubling on a 36 percent increase in revenue.”
The Covid situation continues to weigh in Macau, with the casinos there forced to close during the quarter due to a local outbreak, resulting in gross gambling revenue of just 8 percent of pre-pandemic levels.
Billings said the group remains optimistic about the future in Macau.
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