Wynn Resorts Ltd. (NASDAQ:WYNN) is one of the smallest gaming companies on the market in terms of the number of resorts it owns. There's the flagship in Las Vegas, Wynn Macau on the Macau Peninsula, and the new Wynn Palace on Cotai. 

When looking at the stock, it's important to understand how the company makes its money, because that tells investors what will drive future growth for the company, and how safe and sustainable its income is. 

Front view of Wynn Palace with fountains in the foreground.

Image source: Wynn Resorts.

Wynn's growing reliance on Macau

The table below shows the amount and percentage of Wynn's revenue and earnings before interest, taxes, depreciation, and amortization (EBITDA) that come from Wynn Las Vegas, Wynn Macau, and Wynn Palace. 

Resort Revenue (TTM) EBITDA (TTM)
Wynn Las Vegas $1,655.2 million (30.6%) $510.3 million (33.9%) 
Wynn Macau $2,286.2 million (42.2%) $691.4 million (46%) 
Wynn Palace (Macau) $1,473.8 million (27.2%) $302.3 million (20.1%) 

Data source: Wynn Resorts. TTM = trailing 12 months.

You can see that Las Vegas accounts for only about one-third of the company's revenue and EBITDA. But that's before Wynn Palace really hits high gear. The company's newest resort was only opened in August 2016 and has yet to reach its full potential. Light rail construction surrounding the resort and the continuing construction of MGM Resorts (NYSE:MGM) Cotai have been hindrances so far. But given the resort's location, 70% more hotel rooms than Wynn Macau, and more non-gaming activities, this resort should generate more revenue and EBITDA than Wynn Macau in the long term. 

You can see that Wynn gets a vast majority of its revenue from Macau, and the numbers are growing. By the end of the year, over 75% of the company's business will be in Macau, which is why monthly gaming results are so important to investors. 

Is the U.S. a new growth market?

The high percentage of revenue from Macau may not last long, though. Wynn Boston Harbor is a $2.4 billion resort the company is building just outside Boston, giving it the sole casino license near Boston. And the golf course behind Wynn Las Vegas will soon become convention space and an entertainment center. These domestic developments may swing the revenue mix back toward the U.S., although Macau will likely remain the company's biggest market. 

What to watch at Wynn Resorts

Given the company's reliance on Macau for revenue, investors should keep an eye on Macau's monthly gaming revenue numbers. Lately, they've been strong, and that's like a rising tide that lifts all gaming stocks, Wynn included. But if it starts to sink, the stock will as well. 

The other things to watch are the market shares of both of the company's Macau resorts. Wynn Palace should grow more than Cotai neighbors in coming quarter, even as MGM's new resort opens up. Watch to see if Wynn Macau can hold its ground, which it has done well recently. If Wynn can gain market share overall and Macau continues to grow, the stock could keep its strong run going as well.

Travis Hoium owns shares of Wynn Resorts. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.