While Las Vegas Sands (NYSE:LVS) and Melco Crown (NASDAQ:MLCO) have been raking in profits from Cotai's growth, Wynn Resorts (NASDAQ:WYNN) has been stuck with flat revenue from the Macau Peninsula. It doesn't help that the company hasn't opened a new resort since Encore at Wynn Macau opened in 2010, but it's the organic growth of Macau that the company is really missing out on.
To put this chart into perspective, Macau's gaming revenue grew 13.5% last year, and is up 16.2% so far this year, so almost all of the growth is going to Cotai, helping Wynn's competitors. But Wynn is entering a new expansion phase, and may have three new resorts on the horizon. Here's what we can expect going forward.
Finally making it to Cotai
Wynn will join Las Vegas Sands and Melco Crown on Cotai in 2016, when its $4.0 billion, 2,000 hotel room, 500 gaming table resort opens on Cotai. This will double the company's table games in Macau, and triple the number of hotel rooms. What will the financial impact be?
Over the past 12 months, Wynn Macau has generated $1.2 billion in EBITDA, and we can certainly expect more from Cotai. For a comparison on Cotai, The Venetian Macau generated $1.3 billion in EBITDA over the past year, and City of Dreams generated $970 million. Assuming continued growth in Macau, and the outperformance of Wynn's resorts versus neighbors (seen in Las Vegas and Macau), I think $1.5 billion to $2.0 billion in additional EBITDA from this one casino is a reasonable projection.
If Wynn Cotai is that profitable, it will double Wynn's EBITDA overall, a huge impact from a single new resort.
U.S. expansion for Wynn?
The U.S. hasn't exactly been a gaming hotspot since the recession, but Wynn is interested in building in both Philadelphia and Boston. While you may be wondering why, all you have to do is look at Wynn's Las Vegas results. Gross non-casino revenues were more than double casino revenues last quarter, showing Wynn's focus on non-gaming activities with gambling being a pot sweetener.
In Everett, Massachusetts -- which neighbors Boston -- Wynn is proposing a $1.2 billion waterfront resort that will include 550 hotel rooms, a 600-seat outdoor amphitheater, and a 100,000 square foot casino. Suffolk Downs and Foxwoods are both competing for the single license, and we should expect a decision in early 2014.
Wynn is proposing another $925 million resort in Philadelphia, Pennsylvania that would border the Delaware River, and include 307 hotel rooms, 100 table games, and 2,500 slot machines. The design would be a similar bronze glass curtain wall that's come to define Wynn's casinos.
The impact of "urban Wynn" has yet to be defined, but I think we could expect $200 million or more in additional EBITDA from any license won. Only time will tell if these resorts are as profitable Wynn hopes.
Entering a new age
Wynn Resorts won't open a new resort between 2010 and 2016, but the company could easily double or triple in size when its new expansion phase is complete. Cotai is sure to be a home run, and "urban Wynn" has potential, although it's certainly higher risk. Can you wait that long to see just how profitable Wynn can be?
Fool contributor Travis Hoium manages an account that owns shares of Wynn Resorts, Limited. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.