Artist's rendering of the new Wynn Palace scheduled to open Aug. 22 on Macau's Cotai Strip. Without any allocation of table games yet, the casino is cutting it close on being prepared for the launch. Image source: Wynn Palace.

With only about a month to go before Wynn Resorts' (NASDAQ:WYNN) new Wynn Palace opens on the Cotai Strip in Macau, the casino operator still doesn't know how many table games it can expect the government to allot to it.

Although Wynn has said the gambling hall could handle up to 500 tables, few people expect it to be awarded so many. Beijing is trying to wean casinos off relying on gambling for future growth and has imposed strict guidelines on the number of new tables it will allow each year. With rival operators being granted only half as many table games as Wynn Palace could support, expectations are it will receive a like amount. And that could be a problem.

Wynn's strength has been catering to the VIP high-roller market, but as the forced conversion to more family-friendly mass-market entertainment has rolled out, it operations have absorbed the brunt of the decline.

In Wynn's first-quarter earnings report, issued in May, the casino operator saw its Macau numbers drop across the board.

Wynn Resorts Macau mass-market results


Q1 2016

Q1 2015

Table drop

$1.21 billion

$1.28 billion

Table game win

$247.5 million

$279.6 million

Win %



Win per table day



Avg. number of tables



Data source: Wynn Resorts SEC filings.

Despite having more mass-market tables available, Wynn won less at each of them and saw fewer dollars bet.

Of course, the question is, since the casinos are promoting more family-friendly entertainment, are Wynn and the other operators seeing an uptick in those alternative revenue streams that would make up for the bets not being placed at the tables? The answer seems to be no.

Wynn's occupancy rates in Macau fell to 94.8% from 97.5% a year ago, while revenue per available room shrank from $323 to $307. That suggests that revenues it might have picked up from food and beverages to convention and meeting space also declined year over year.

It's not much better elsewhere, either. Melco Crown Entertainment (NASDAQ:MLCO) reported that its table drop tumbled 10% in the quarter to $1.07 billion, while non-gambling revenues at City of Dreams fell 7% from the year-ago period. Similarly, Las Vegas Sands (NYSE:LVS) said mass-market volumes fell at all of its Macau resorts.

Macau's losing streak has run to 25 straight months, as a government crackdown on corruption snared a number of VIP junket operators that had high rollers shunning the market. In its place, they're making for other locales, such as Singapore, Australia, and the newest hot spot, Saipan, the largest island in the U.S. Commonwealth of the Northern Mariana Islands in the western Pacific.

And as more casino operators open more mass-market resorts on Cotai, the competitive pressure will increase. In addition to Wynn Palace, Sands will be soon opening its Parisian, followed by MGM Resorts (NYSE:MGM) with its MGM Cotai.

Melco Crown Entertainment initially went all in on the mass-market edict, devoting not a single table to high rollers of the 250 it was awarded last year at its Studio City casino. Yet after that dismal first-quarter showing, it's reconsidered and is reportedly allocating three tables to VIPs. Regardless of the number of tables Wynn Resorts is granted, it's not likely to make the same mistake. Las Vegas Sands also says VIP tables will be part of the Venetian when it opens.

Galaxy Entertainment Group (OTC:GXYEF) was also allocated 250 tables at its two resorts on the Cotai Strip that opened last year and are geared more toward tourists.

While investors wait to see what number Wynn gets, the Macau government says it's waiting for Wynn to let it know how many it wants. It notes it has seen the reports about how many Wynn Palace could support, but that's not the same as applying for them. The looming deadline of Aug. 22 for the casino's planned opening is approaching fast.

Of course, being granted table allotments just days before an opening is nothing new in Macau: Galaxy got its assignment seven days before opening; Melco Crown, five days. Still, Wynn Resorts seems to be rolling the dice by waiting so long to inform the government of its needs, and opening Wynn Palace without any table games just isn't a possibility.

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