Inside Asian Gaming

INSIDE ASIAN GAMING | November 2009 18 W ynn Macau’s third quarter net revenues fell by 5.5% year-on-year, according to results issued by the company last month. In Q3 2009, net revenues from the Macau operation were US$448.5 million, compared to US$474.8 million in the third quarter of 2008. The revenue dip appears to have been slightly higher than that seen by the Macau market in general. Macau saw an overall two percent fall in gross gaming revenues from January to August, compared to the same period a year earlier. By contrast, Wynn Macau’s earnings before interest, taxation, depreciation and amortisation (EBITDA) were up 20.6% compared to Q3 2008. Wynn Macau generated adjusted property EBITDA of US$128.2 million, compared to US$106.3 million in the third quarter of 2008. EBITDA growth is a favourite measure of Western analysts as a way of assessing a company’s progress. This is probably because it’s most appropriate as a yardstick for large organisations with high levels of debt financing (i.e., your average Western enterprise) and those with significant assets such as real estate (i.e., your average casino operator). Gaming operators are, however, arguably atypical of most large corporations. Given that they are usually operating under a government-issued concession, they tend to have finite and clearly defined tax obligations (Macau’s concessionaires pay nearly 40% of the gross as gaming tax to the government). In the Macau The lobby at Wynn Macau EBITDA—For and Against Wynn Macau sees a dip in Q3 revenue, but an increase in earnings before interest, taxation, depreciation and amortisation Wynn Macau Results