Wynn Resorts, Limited (NASDAQ:WYNN) has not been in a great shape in the recent years. The casino industry has been rattled by market slowdown with Asia’s gambling capital Macau perhaps delivering great disappointment for casino giants such as Wynn Resorts.
When gaming revenue started sliding in Macau amid economic slowdown and crackdown on VIP betting in China, Wynn Resorts, Limited (NASDAQ:WYNN) stock had little to hold it up. But, have things changed for the better for the casino operator? Full recovery in Macau is still a long shot and business in Las Vegas remains challenging. However, there are positive signs on the horizon.
Light at the end of the tunnel in Macau
A report from Macau recently showed that gambling revenue there rose 1.1% to $2.4 billion in August and it was the first positive revenue growth in Macau since May 2014. Analysts had expected August revenue in Macau to decline 1.5%.
Though not strong growth, the August results are encouraging and further positive reports from Macau should fuel gains in casino stocks. Macau has become a vital market for international casino operators such as Wynn Resorts. That is why recovery of the market is closely watched by investors.
Wynn Resorts only recently opened its $4 billion Wynn Palace in Macau and the timing looks good given that it comes at a time when Macau is beginning to show new signs of life again.
In Macau, Wynn Resorts, Limited (NASDAQ:WYNN) is pursuing a diversified business model. The company can be seen going for the high-end gamers as well as the mass audience. The balanced approach minimizes the company’s risk profile and positions it to take advantage of the recovery in VIP spending and overall growth of casino activities in Macau.
Las Vegas remains crucial
Though it may have seemed like international casino such as Wynn Resorts, Limited (NASDAQ:WYNN) are increasingly relying on Macau, the domestic market remains a crucial one. Las Vegas ensured that Wynn Resorts and its peers could still turn a profit despite the downturn in Macau. With more investment and innovation, Las Vegas should continue to supply profit juice for casino operators such as Wynn Resorts.