VIP Gamblers Win $10 million from Wynn Palace Macau
Posted on: July 31, 2017, 03:00h.
Last updated on: August 1, 2017, 07:53h.
Casino magnate Steve Wynn reported during a call with stock analysts, Tuesday that a group of high rollers playing baccarat won $10 million from his Wynn Palace in Macau in April. It was one of the largest reported cashes for the game in a casino.
The amount shocked the 75-year-old billionaire. Not because of the amount of money, but because of the statistical improbability for achieving such an accomplishment.
“We had probably the most unique statistical anomaly in my 50 years of doing this,” Wynn said last week in a conference call. “And that is with enormous volume, one of our leading outlets lost money for the entire month. The bottom fell out and all of the players won millions of dollars.”
The group was brought in by a junket operator, called SunCity, one of the largest such companies in the country. They are part of approximately 120 licensed businesses that work with casinos in the autonomous region of China, who receive a percentage from the casino of whatever the VIPs gamble.
They are coveted casino clientele. They spend upwards of $500,000 per trip and receive perks such as free hotel rooms and expensive gifts in return for wagering hundreds of thousands of dollars.
These types of customers are key to the business and resorts estimate they are responsible for 53 percent of total casino revenue. Baccarat makes up the lion’s share of casino earnings in private high roller rooms.
VIP baccarat rooms generated $4.46 billion in gross gaming revenue between April and June.
Macau Gaming Inspection and Coordination Bureau (DICJ) reported that VIP baccarat revenue rose 35 percent for the second quarter, compared to the same period in 2016.
That increase was attributed to Chinese President Xi Jinping relaxing a crackdown he had over his citizens traveling to Macau for the past two years.
Stock Price Affected
Despite profits being robust for the first year of the $4.2 billion Wynn Palace, the facility was partly responsible for a lower than expected second quarter earnings report. As a result the stock lost eight percent of its value over two days when the news was announced last week.
Even though it wasn’t what analysts had anticipated, the period’s earnings were slightly better than expected. That didn’t sway speculators, who are nervous about lower foot traffic at the casino.
Several financial institutions are not bullish about the stock. Telsey Advisory Group downgraded WYNN to “market perform” from “outperform,” and Union Gaming downgraded the stock to “hold” from “buy,” though lifted its price target by $2 to $142. Susquehanna cut its price target to $129 from $131.
The stock did hit a two-year high of $139.67 on June 26, but many of the analysts have downgraded it since then from a “hold” or worse rating.
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