Outside of the opening of Encore Boston Harbor in late June, there were very few fireworks for Wynn Resorts, Limited (NASDAQ:WYNN) in the second quarter of 2019. Revenue rose 3.3% to $1.66 billion and net income fell from $155.8 million a year ago to $94.6 million, or $0.88 per share. The opening of Encore Boston Harbor was a big expense in the quarter, but long term it's the company's best opportunity for growth. 

Encore Boston Harbor.

Image source: Wynn Resorts.

Wynn's entry into Boston

The $2.6 billion Encore Boston Harbor opened on June 23 and had just eight operating days in the second quarter. But in those eight days the resort generated $18.8 million of revenue and adjusted EBITDA of $100,000. 

Wynn's base case projection for Encore Boston Harbor is $1.0 billion in annual revenue and EBITDA of $275 million. That's $2.7 million of revenue per day, slightly more than what was generated in the first few days of operations. Next quarter we'll get more details on operations, but for now Wynn's new property appears to be performing nearly according to plan.

Macao holds steady

Gambling in Macao was flat in the second quarter, so any company that was able to grow was taking market share. That's exactly what Wynn did in the quarter, to a small extent. 

At Wynn Palace, revenue was up 1.3% to $628.9 million and EBITDA fell 6.8% to $167.2 million. Non-casino revenue was the highlight, rising 5% to $100.4 million in the quarter. Wynn is planning a large non-gaming addition to Wynn Palace, including a new hotel tower, so strength in non-gaming is critical long term. 

At Wynn Macau, revenue rose 0.6% to $546.5 million and property EBITDA was up 1.7% to $175.9 million. An unusually "lucky" quarter offset a 33.4% decline in VIP gambling volume. Win percentage was 3.3% in the quarter, well over the 2.7% to 3% that management expects (see here for a more detailed explanation of luck in a casino).  

Las Vegas shines

In Las Vegas, Wynn Resorts had a surprisingly strong quarter. Revenue was up 5.1% to $464.1 million, and adjusted EBITDA was $137.4 million, a 10.7% increase from a year ago. A lucky quarter helped results in Las Vegas, but table game volume was up 9.2% and slot play increased 4.3%, so there was more underlying strength than in Macao. 

Non-casino revenue, which is really what drives results in Las Vegas, was up 1.3% to $344.4 million. Room revenue jumped an impressive 7.9% to $127.6 million as room rates rose 6.4% and occupancy increased 240 basis points to 90.1%. 

Construction continues on a 430,000-square-foot meeting and convention expansion that will cost $425 million. When it opens in early 2020, management expects to see an uptick in occupancy and room rates, which should trickle down to the casino and restaurants as well. 

A steady quarter for Wynn Resorts

The second quarter wasn't a blowout by any stretch for Wynn Resorts, and if luck had gone the other way it may have resulted in a decline in revenue in Macao. But volatility is to be expected in Macao. 

What's encouraging to see is growth in Las Vegas ahead of the convention space opening in 2020 and the early performance in Boston. If the domestic resorts perform well, then any growth from Macao would be icing on the cake.