As the saying goes, it's better to be lucky than good. Wynn Resorts (Nasdaq: WYNN) certainly had its share of luck in the second quarter. Macau made more than "normal" gaming revenue, allowing Wynn to earn an adjusted $0.52 per share, beating analyst estimates of $0.42.
Even without good luck, Macau led the way, and Las Vegas was an anchor on earnings. But that shouldn't surprise anyone at this point. What did surprise me was how bad Las Vegas was, and the direction it's headed. Contrary to upbeat numbers by Las Vegas Sands (NYSE: LVS), both MGM Resorts (NYSE: MGM) and Wynn's Las Vegas operations seem to be getting worse. Operating loss in Las Vegas was $17.2 million, worse than $8.3 million in 2009. Bad luck did play a role in the Las Vegas results, but gambling levels weren't impressive.
But the direction of Wynn Las Vegas caught my attention. The complex may slowly be becoming a high-end nightclub instead of a casino. Food and beverage revenue increased 11.5% to $111.5 million -- now nearly as much as casino revenue of $117.2 million, which was down 5.8%. How long can Wynn rely on high-end clubs and restaurants to support a multibillion-dollar hotel?
But if you're like me, you gloss over Las Vegas results and move straight to Macau. And in Macau, Wynn is developing again. Wynn has a basic design for its Cotai Strip casino and is moving forward, although it's not releasing any budget or timeline yet. This could be perfect timing in Cotai. By the time Wynn opens up its casino, the strip will be developed, and it could leverage the existing casinos. It won't be a stand-alone like The Venetian Macau was in the early days.
Of course, investors should look for growth in Macau, which continues to look strong. But don't overlook the casino I call Club Wynn in Las Vegas. It would be nice if it could start contributing more positively to future results.
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