Month: May 2023

Everi picked out a number of deals in 2022 that helped drive growth in Q1, including historical horse racing gaming company Intuicode Gaming Corporation in May last year, with this now operating as part of its gaming segment.

Everi said its financial technology solutions (fintech) arm also benefitted from acquisitions, with the purchase of Ecash Holdings in February 2022 helping to push hardware sales up in this area of the business.

It also acquired certain assets of mobile-first engagement platform Venuetize in October of 2022, which diversified Everi beyond the gaming sector, and the majority of assets in gaming device and systems provider Video King this month. Chief executive Randy Taylor said this sets the group up further growth.

“Overall, our first quarter results continued to demonstrate our consistent growth profile, as we further execute on our organic growth initiatives and benefit from several acquisitions we completed over the last 12 months,” Taylor said.

“As a result, and despite the uncertainty of the macroeconomic environment and higher interest rates, we continue to be favourably positioned to deliver solid top-line growth that we expect will generate at least $92.0m of net income and at least $150.0m in free cash flow this year.”

Fintech growth drives revenue in Everi Q1

Revenue for the three months to 31 March amounted to $200.5m (£159.0m/€183.2m), up from $175.6m in the same period last year.

Games segment revenue was 9.3% higher year-on-year at $107.4m, reflecting a 14.6% rise in revenues from gaming equipment sales to $32.1m and a 7.1% increase in gaming operations revenues, inclusive of digital gaming operations, to $75.3m.

Revenue from the fintech segment also increased by 20.4% to $93.1m. Everi put this down to a 12.6% rise in financial access services revenue to $56.2m, while software and other revenue increased 35.2% to $24.2m and hardware sales revenue 30.5% to $12.7m.

Turning to spending, total costs and expenses for the quarter were 20.7% higher at $148.4m, with revenue costs up across both the gaming and fintech segments. Everi also reported a rise in operating expenses and research and development spend, while both depreciation and amortisation were up due to acquisition costs.

When also including $18.0m in interest expenses, this left a pre-tax profit of $34.1m, down 17.2% on the previous year. Everi paid $6.0m in tax and also accounted for a $186,000 net loss from foreign currency translation.

As a result, net profit for Q1 amounted to $27.9m, a 13.1% drop from the previous year. However, adjusted EBITDA was 3.2% higher year-on-year at $92.5m.

“Our financial results continue to benefit from our capital allocation priorities, including our focus on high-value internal product development efforts and our ability to execute on strategic tuck-in acquisitions for businesses that we expect to scale and optimise, such as our recent acquisition of the assets of Video King,” Taylor said.

“With our anticipated strong free cash flow generation, we expect to continue returning capital to our shareholders through our increased share repurchase programme, while we focus on integrating recent acquisitions that provide incremental growth opportunities in 2023 and beyond.”

Yaniv Sherman, CEO of Bragg, said that the revenue was the result of expansion within certain markets, including North America and Europe.

“We extended our momentum in the first quarter with he strong growth reflecting the continued success of our initiatives to diversify the business towards being a content-driven igaming solutions provider in a growing number of North American and European markets,” said Sherman.

Sherman added that Bragg has launched with six operators in three North American markets “to date” in 2023, alongside eight operators in five European markets.

“Our start to 2023 demonstrates our ability to successfully deliver strong near-term financial performance as we continue to successfully execute on our plan to drive consistent profitable revenue growth and increasing cash flow.”

First quarter results

The overall cost of revenue for the quarter was €10.6m, an increase of 13.9% compared to Q1 2022. This left the gross profit for the year at €12.2m, a rise of 22.0%.

Selling, general and administrative costs came to €11.9m for the quarter, ticking up by 16.7%. Loss on remeasurement of derivative liability was €64,000, while gain on remeasurement of deferred consideration was €270,000.

This left the operating income for the quarter at €520,000, a rise of €663,000.

The net income expense and other financing charges added up to €596,000, leaving the loss before income taxes at €76,000.

After considering income taxes of €400,000, the total net loss for the quarter was €476,000, an increase of €244,000.

Earnings before interest, tax, depreciation and amortisation (EBITDA) was €3.2m for the quarter, up by 125.3%

Inspired experienced double-digit growth within its interactive and virtual sports businesses in the three months to 31 March. Both of these operate as part of its digital umbrella.

Inspired also praised the ongoing “resilience” of its land-based operations, with revenue from gaming having increased, but leisure revenue down year-on-year.

Executive chairman Lorne Weil said based on the performance of the business as a whole in Q1, Inspired is well positioned to pursue further growth across both digital and land-based operations in the remainder of 2023.

“The year is off to a strong start as we continue to deliver double-digit growth in our high-margin, capital efficient digital businesses, while positioning the land-based businesses for steady growth and capital efficiency to increase cash flow,” Weil said.

“To say we are excited about the future is an understatement. Our land-based business provides us steady growth and substantial cash generation. Our digital business provides a unique combination of strengths in the industry today, specifically high growth, high levels of profitability and modest capital investment required.  

“We think this combination produces high quality earnings and is unmatched among our peers. In our view, the outlook is bright, and we remain focused on delivering value to our shareholders for a long time to come.”

Q1

Total revenue for the first quarter amounted to $66.0m (£52.3m/€60.1m), up from $60.0m in the opening three months of 2022. This comprised $58.3m in service revenue and $7.7m worth of product sales revenue.

Breaking down performance by segment, land-based gaming led the way with $27.4m worth of revenue, up 18.1%. Inspired said this was driven by product revenue increases in the UK and mainland Europe. It also noted that service revenue was impacted by the absence of VAT-related revenue in the quarter.

Land-based leisure revenue fell 12.8% to $17.1m as the result of the structured withdrawal of non-core low-margin amusement and prize vend machines, which was recognised in Q3 of 2022. Inspired also referenced a reduction in the number of gaming machines following a contract renewal with a pub customer.

Turning to digital, virtual sports revenue increased 28.5% to $14.9m. This was driven by growth from existing online customers along with expanding jurisdictions. In addition, interactive revenue climbed 24.5% to $6.6m, helped by growth within the UK, US and Canada.

In terms of spending, selling, general and administrative expenses were the main outgoing at $34.4m, up 15.9% year-on-year. Cost of sales reached $16.7m, and depreciation and amortisation $8.9m.

After accounting for $6.2m in net financial costs, Inspired had a pre-tax loss of $100,000. This is compared to a $1.6m profit in Q1 of 2022. The group paid $100,000 in income tax, which resulted in a net loss of $200,000. This is in contrast to the $1.5m net profit last year.

However, when also including a negative impact of $1.7m from foreign currency translation, as well as a $200,000 gain from the reclassification of loss on the hedging instrument to comprehensive income and a $2.0m gain on pension plan, net profit was $500,000, down 84.9% year-on-year.

In addition, Inspired said total adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) was 5.0% higher at $21.1m.

Announced after the group posted its 2022 full-year results in March, the review has been looking at a “range of strategic alternatives” that could improve value for shareholders in GAN.

While the review remains ongoing, chief executive Dermot Smurfit said he was “pleased” with the progress made so far, adding that a recent $30.0m (£23.8m/€27.5m) loan from Beach Point Capital affiliate BPC Lending I LLC helped improve its financial position.

“We are progressing in our strategic alternatives review to evaluate the opportunities available to us maximise shareholder value,” Smurfit said. “Our recent announcement and term loan transaction bolstered our financial position and allowed us to modify the conditions of our term loan, significantly reduce our interest expense, and strengthen our balance sheet. 

“To be clear, this transaction should be viewed as a key step in the broader review process, but important one that allows us to evaluate the options available to us from a stronger position. 

“Overall, we have been pleased with the nature of the strategic review up to this point, and we will provide updates as appropriate as the process unfolds. At present, there is no timetable for the completion of that process.”

Q1 results

Revenue for the three months to 31 March amounted to $35.1m, which was down 6.4% from $37.5m in the same period last year.

B2C remained GAN’s primary source of revenue during the quarter, but the $23.9m posted was 2.1% lower than $23.9m in the previous year primarily due to the weakening of the currencies in which the group derives its B2C operations’ revenues relative to the US dollar.

Revenue from B2B activities also declined 13.7% to $11.3m, mainly as the result of a drop in contractual revenue rates of GAN’s largest B2B customer. However, GAN said that the effects of the decrease were partially offset by overall growth in the B2B segment due to the strong performance of its largest B2B client, with gross operator revenue in B2B up 42.0%.

Turning to costs, total operating expenses for the quarter were 12% lower at $41.1m, while after also including the impact of $9.3m in additional profit, minus $1.7m worth of interest expenses, this left a pre-tax profit of $1.6m, compared to a $4.1m loss in 2022.

GAN paid $74,000 in income tax during the quarter, resulting in a net profit of $1.5m, in contrast to the $4.5m loss posted at the same point last year. However, adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) was 98.7% lower at $39,000. 

“Our first quarter showed another strong quarter of underlying KPIs for both our B2B and B2C businesses and B2B gross operator revenue and active customers, deposits, and turnover in B2C remain very encouraging,” Smurfit said. 

“We also expect our deliberate efforts to reallocate capital and other resources toward our highest return opportunities to yield improved financial results in 2023 as we lean into GAN Sports in the US and select international markets for B2C where we are best positioned and see reasonably attainable paths to profitability.”

GeoComply’s acquisition of OneComply takes its product range in a new direction. The supplier is predominantly known for its geolocation solutions, but at its core it’s a company that prevents fraud and provides cybersecurity solutions to verify users’ digital identity. It’s tech that helps licences.

OneComply, on the other hand, helps companies secure licences in the first place. It’s not really adding another layer of service to GeoComply’s offering, chairman David Briggs explains, but a case of adding an outstanding product that solves a major industry pain point.

“As customers we love the product. Having gone through personal licensing with and without using OneComply, the difference is enormous,” Briggs says.

The level of scrutiny that goes into personal licensing is severe, to put it kindly. Applicants will have to dig out their high school transcripts, never mind college, as well as hand over old addresses and likely face some scrutiny into family members.

And then there’s the fingerprinting. Each state has its own fingerprinting requirements, and don’t pass them from state to state. Inky fingers are an unintended consequence of gaming expansion.

“For the amount of brain damage you go through with personal licensing, it’s not something that adds a layer of safety; the actual blocking and tackling is just a pain,” he adds.

That’s what makes OneComply so compelling, he continues. “Obviously not completely – the licensing process will always be a challenge – but it frees up time for operators, and particularly startups, and makes the challenge less overwhelming.”

So what does OneComply actually do?

OneComply is essentially a platform that allows operators, suppliers or affiliates manage all licensing applications from a single location. It stores data – no more fingerprinting or searching for college transcripts – lets users track or assign tasks required for licensing and even automate elements of the process.

To Briggs it’s like moving from email to Gmail. “We introduced it to all our friends and partners, and they all bought it,” he says.

It fits into GeoComply’s strategy of “solving a problem no one else could solve”. That’s what informs its M&A strategy.

Since OneComply is its first acquisition, it’s not hard to infer that nothing has matched this criteria to date. “If we can identify a good use of technology and a better process that eases the burden for everyone, that’s a great thing,” he says.

“We haven’t bought anything before this, as we haven’t seen something that can really solve customers pain points,” he adds. “It doesn’t take anything away from the lawyers and consultants – ultimately it’s still their job to help clients navigate the process – but they don’t want to be searching for high school records. We only see upside for everyone.”

Bringing more people into the gaming market

The GeoComply player location check dominates the US market, and considering it has just about every partner available, OneComply won’t really expand GeoComply’s existing addressable market. Where it might help is bringing new blood into the industry.

As director of corporate development Marco Stotani points out, the betting and igaming sector is becoming more attractive as it spreads across the US.

“There’s a lot of people who are interested, but market access is not easy,” he explains. “You have to do the licensing, geolocation, find vendors, and that’s why IDComply started.

“We see this as another opportunity to open market access and to bring innovation into the market. If you’re coming from a fintech and want to move into gaming, this can facilitate your entry to the market.”

Briggs adds that it has applications beyond gambling, hinting that the platform may soon be available for other jurisdictions. But even in the US, it has further to go.

“There are other verticals, in the US at least, where you have to get fingerprinted,” Briggs points out. “In the payments industry, on a state-by-state level you need a Money Service Business licence.

“Once OneComply is fully scaled and making the most of solving licensing for gaming – it’s just 14 people currently – we can expand into payments and beyond.”

That will take time, however, as OneComply will continue to run as a separate business. Products will be bundled into GeoComply deals where necessary, but it will remain in control of its own destiny.

It’s similar to GeoGuard, another GeoComply subsidiary that’s responsible for limiting access to content in other markets (if you’ve ever raged against not being able to access Match of the Day abroad, it’s GeoComply you have to blame).

More M&A to come from GeoComply?

And while OneComply solved a very significant pain point, prompting GeoComply to make its first M&A move, this focus on ticking off challenges continues.

“It’s a 2+2=5 scenario,” Briggs says. “For OneComply to grow they need to invest in infrastructure, customer service, marketing, HR, legal and finance. We have that so it helps them grow way faster, and there’s a big overlap between their target customer and our existing customers.”

“We haven’t bought anything before as we haven’t seen anything as accretive as this product,” Briggs adds. “Others will follow, as the scope for consolidation is enormous.

“There will be more, we are actively looking for more, but when it makes sense we will do it.”

Zúñiga officially took on the role on 5 May after his appointment was approved by the country’s Ministry of Finance and Public Credit.

An experienced economist, Zúñiga is currently deputy director of fiscal policy at the Ministry of Finance and Public Credit, having previously served as real sector advisor and tax policy advisor.

Prior to this, he worked as a researcher at ECON Estudio, focusing on areas such as public policy consulting and competition policy, while he also spent time as a consultant at the Development Centre of the Organisation for Economic Cooperation and Development (OECD).

In addition, Zúñiga has served as a professor of a number of university courses, covering macroeconomics, regulation and competition, and issues related to the implementation of public policies.

“We would like to welcome Dr. Libos and wish him success in our organisation,” Coljuegos said. 

The court determined as lawful a GGL by-law that stated affiliates which link to illegal games of chance websites are classified as advertising said unlawful activity. The court made clear that this is “incompatible” with the 2021 State Treaty on Gambling Regulation that established the current German regulatory regime.

The court added that the ban is necessary to so as to not give the impression that “permitted gambling is of equal importance to illegal gambling”. Legal gaming operators are also required to be responsible for affiliates not advertising these unlicensed sites by not willingly allowing their services to sit beside them on the site.

The Saxony-Anhalt court also confirmed the GGL obligation that affiliate sites must inform users about the German “white list” of permitted operators. Affiliates also must inform potential players about the addiction risks of advertised gambling, ban the participation of underage consumers and make clear the options for independent therapy.

Other GGL regulatory requirements also were confirmed including a ban on igaming sites that advertise themselves as “free of charge”, as well as a more technical ruling that spells out that bonus and discount advertising must clearly state the amount of benefits and the duration of the campaign.

GGL fines operator for affiliate violations  

The case originally concerned a March decision by the regulator to issue an unnamed operator with a five-figure fine for deliberately advertising its services on a site that also linked to illegal offerings.

“We consider these advertising regulations to be very good and justified,” said GGL chief executive Ronald Benter. “The GGL consistently monitors offers from legal operatoes. In the event of violations, we levy heavy fines.

“The withdrawal of the licence in the event of repeated violations of the provisions of the State Treaty on Gambling Regulation is a measure that we do not shy away from.”

Board member Benjamin Schwanke added: “The legal online gambling providers cannot have any interest in advertising on sites that also advertise illegal gambling. This damages the reputation of the operators”.

L&W experienced double-digit growth across all its business segments during the three months to 31 March, with its gaming division remaining by far its primary source of revenue.

L8W chief executive and president, Matt Wilson, said this widespread growth was the result of the group’s ongoing strategic plan, which also helped the business progress towards its long-term financial targets.

“We’re off to a strong start in 2023, delivering on all key metrics and once again driving double-digit revenue growth across all three of our businesses,” Wilson said. “Our strategy and disciplined investments are driving enhanced returns as we continue to develop and execute on our robust product roadmap, building off the strong momentum that we saw in 2022. 

“The teams executed several notable wins and key launches in the quarter, and we have a full pipeline of games that support progress toward our long-term targets. With leading talent, technology and products, we continue to strengthen our position as the leading cross-platform global games company.”

Results

Revenue in the first quarter amounted to $670m (£531m/€611m), up from $572m in the corresponding period last year. Of this total, $477m came from services and $193m product sales.

Breaking down performance by segment, gaming revenue increased 18% to $419m, driven by continued momentum in gaming machine sales, which were up 53% to $158m. 

Gaming operations revenue edged up from $155m to $160m, helped by growth within the group’s North American installed base and average daily revenue per unit, while gaming services revenue climbed 8% to $55m and table products revenue was level at $46m.

Revenue from the SciPlay business jumped 18% to $186m, the highest-ever quarterly figure from this segment. L&W said that this was driven by its core social casino business, which delivered strong payer metrics.

Turning to igaming and revenue was up 10% year-on-year to $65m, helped by growth in the US market, where revenue was up 34%. L&W noted the impact of launches of its land-based original content and scaling third party aggregation on its platform in the US, while further growth is expected following the roll-out of a new live casino in Michigan later this year.

In terms of spending, operating expenses were up 6.8% at $568m, as expenses grew in all areas with the exception of restructuring and depreciation, amortisation and impairments.

L&W also noted $76m in finance-related costs, meaning pre-tax profit for the quarter was $26m, compared to a $64m loss at the same point in 2022. The group received $1m in tax benefits, leaving a net profit of $27m, in contrast to the $67m loss posted in Q1 of last year.

However, when taking away $5m of net profit attributable to non-controlling interest, as well as accounting for $95m in net profit from discontinued operations that were included in the 2022, this meant net profit was marginally down from $26m to $22m. 

In addition, L&W said consolidated earnings before interest, tax, depreciation and amortisation (EBITDA) for the quarter was 23% higher year-on-year at $249m.

“We continue to capitalise on the strong growth opportunities that we see in our markets, and drive margin enhancement across the business as we remain focused on operational excellence,” L&W chief financial officer Connie James said.

“This quarter demonstrates Light & Wonder’s favourable financial profile with strong top-line growth flowing to the bottom line, and importantly strong cash conversion, enabling us to invest in future sustainable growth. 

“We continue to focus on generating significant cash flow while maintaining our balanced and opportunistic approach to capital management and a healthy balance sheet to enhance value for our shareholders.”

For Penn Entertainment, giving back to its communities is nothing new. Senior vice president of public affairs Eric Schippers says its efforts stretch back to the operator’s founding in 1972. So what’s different in 2023? 

“We’ve grown exponentially, from a family-owned racing company to the nation’s largest regional gaming company,” he says. In the two decades since Schippers joined, Penn Entertainment has expanded from six properties to 43 across multiple states. 

This means the scope and scale of corporate social responsibility (CSR) efforts is significantly larger, and the potential impact of initiatives goes much further. It’s Schippers’ job to build the framework and a foundation to embed them into the company’s culture. 

The big bang moment for Penn’s CSR efforts

Amid the upheaval and unrest of 2020, Penn Entertainment established its first environmental, social and governance (ESG) committee. It reports directly to president and chief executive Jay Snowden. 

Snowden was the operator’s long-serving chief operating officer who assumed the CEO role in January 2020. Schippers says the ESG Committee is “reflective of what he’s brought to the company”. 

Acting on the committee’s initiatives, Penn introduced policies, procedures and transparency around issues such as environmental impact, diversity, equity and inclusion (DEI) as well as efforts to support and reward veterans and first responders. 

“We want to make sure our team members, shareholders, community partners know this is not just fluff,” Schippers says. “This is something deeply meaningful to us, from the highest levels of our management to the corporate employees.”

A company-wide ESG effort

The level of engagement across the business is highlighted in Penn Entertainment’s CSR report for 2022, which details donations of more than $7.6m over the year, and more than 8,000 volunteering hours. “We’re rolling up our sleeves to help out and give back,” Schippers says.

Even at Penn’s head office, staff were involved in cleaning up the local waterfront, and as of 2022, ESG metrics were used for its long-term incentive executive compensation programme. 

For Penn Entertainment casinos, efforts are underway to reduce the environmental impact across all venues. 

Properties built from the ground up comply with the LEED (Leadership in Energy and Environmental Design) certification, while others use existing developments. Its Hollywood Casino York in Pennsylvania, for example, is hosted in a former Sears department store. 

Schippers outlines a host of other initiatives to reduce properties’ carbon footprint. Properties use LED lighting and are working to phase out single-use plastics. Cashless technology is being deployed to eliminate plastic player cards. 

Much of this is being done through thanks to individual employees, who help shape the company-wide efforts.

“We’ve designated someone at each of our 43 properties to not only start to think about new initiatives, but what else we could do to limit our carbon footprint. From reducing our buffets, to using alternatives to beef, we’re having these kinds of things bubble up from our properties that become best practice to share across the enterprise.”

Penn Entertainment as a community champion

Schippers suggests efforts to reduce the environmental impact of casinos reflects Penn Entertainment’s status in the communities they serve.

“We are large, revenue-generating, economic development organisations within these communities; we consider ourselves a cornerstone. 

“We’re a neighbourhood business; the people who work for us are known in their communities, so we want to support them.”

It supports hospitals, programmes to bring in new business, and ultimately taking Penn’s impact beyond jobs and new visitors. “We want to attract more businesses, so we don’t become an island,” he adds.

Creating opportunities for a more diverse range of candidates

Penn now aims to ensure individuals from their communities can progress through the organisation. This reflects an opportunity, and a challenge, for the US gaming industry.

As the American Gaming Association notes, gambling’s diversity, equity, inclusion and belonging efforts are having an impact.

The AGA said earlier this year that gaming’s leadership pipeline is “significantly more diverse” than the national average. Employees from minority backgrounds make up 45% of first to mid-level management in the industry.

But gender diversity at the upper echelons is still low. The AGA, for example, says representation “drops off” at the most senior levels. Schippers says Penn is working to change this.

Through an initiative called the Penn Way, it requires candidates from diverse backgrounds to be considered for executive roles. “We want our team to be reflective of the communities we operate in, and [this is] a good way of achieving it,” he explains. 

Penn aims to create new pathways for prospective employees and their families, he says.

Looking inwards for the next generation of Penn executives 

For its existing employees, there’s a $1m annual Diversity Scholarship for employees’ children to move onto higher education. In 2022 alone, 47 students benefitted from the scheme. 

“It makes a huge difference,” Schippers says. “Not only in the lives of the children; the whole property is so proud to support these individuals. Many of them are first-generation college-bound, and they become leaders not only at Penn but also within their communities.”

Efforts expand outwards through the Leadership Excellence at Penn (LEAP) programme. Those on the scheme – graduating seniors – rotate through various branches of the business. They get to try out different roles and functions, providing another funnel for identifying potential internship candidates, and prospective hires.

Working with HBCUs

Penn’s DEI efforts extend to university students. It runs a science, technology, engineering and mathematics (STEM) scholarship programme in partnership with Historically Black Colleges and Universities (HBCUs). 

Penn is donating more than $4m over five years to fund scholarships for students at participating institutions. 

“Our programmes are only as good as the effort we put in, so across all areas of the country we’re putting our energy towards creating a diverse workforce, supporting diversity, supporting the children of our team members, and nurturing and empowering candidates,” Schippers says.

This commitment to diversity extends to Penn’s vendors, Schippers points out. It seeks to increase spending with minority- and female-owned businesses, even providing mentorship to help them grow their operations. 

Supporting veterans through Penn Heroes

The operator extends this support to military personnel, veterans and first responders through its Penn Heroes programme. Its loyalty programme offers additional perks, such as discounts across hotels, dining and shopping at Penn Entertainment properties. 

This, Schippers says, is particularly “near and dear” to CEO Snowden’s heart. “It’s a personal passion of his. Many of us not only recognise and honour the team members that served, whether first responders or veterans, but we also know people serving overseas.”

More than 182,000 people have signed up to Penn Heroes to date. The operator also supports local veterans’ organisations, and established a military scholarship at Penn State Berks, near its head office.

“We’re covering all our bases to provide support for our heroes,” Schippers adds. 

Following publication of the 2022 CSR report, Penn CEO Snowden said he was proud of the company’s efforts. He hailed its “significant progress” in ensuring a positive impact over the year. 

Schippers echoes his CEO: “We’re very pleased with the progress we’ve made to date.” But, he adds, plans are in motion to expand its environmental efforts beyond the property walls.

“We completed our scope one and two greenhouse gas assessments for the first time this year,” he says. “We’re looking to expand to a scope three assessment, which includes the fuel of airplanes flying to our properties.

If ESG ultimately wants businesses to go above and beyond to have a positive impact, Penn is off to a strong start.

Wynn said each of its land-based casino resorts generated “strong” financial results for the first time in three years, following the removal of almost all remaining Covid-19 measures in Macau.

Increased traffic and footfall in Macau led to revenue in the region more than doubling year-on-year, while the operator was also able to report growth across its Las Vegas operations and at its Encore Boston Harbor in Massachusetts.

While the Wynn Interactive business experienced a slight decline in revenue, Wynn Resorts chief executive Craig Billings said growth across the wider business was “testament” to its efforts during the quarter.

“For the first time in over three years, each of our resorts is generating strong financial results, which is once again a testament to our team’s relentless focus on delivering five-star hospitality and experiences to our guests,” Billings said.

“In Macau, after several challenging years, we were pleased to experience a meaningful return of visitation and demand, particularly in our mass gaming and retail businesses. We believe we are well-positioned for success in Macau’s next phase of growth.”

Q1 

Revenue for the three months to 31 March amounted to $1.42bn (£1.13bn/€1.30bn), up from $953.3m in the previous year.

Casino revenue was 56.6% higher at $767.0m, while rooms revenue increased by 59.9% to $272.5m, food and beverage revenue hiked 33.7% to $232.6m, and entertainment, retail and other revenue jumped 27.2% to $151.5m.

Breaking down performance by segment, revenue from Macau operations rocketed 101.1% to $600.1m. This included $369.4m in revenue from the Wynn Palace, up 126.2%, and a further $233.7m from the Wynn Macau, a rise of 70.8%.

In Las Vegas, revenue was 32.8% higher at $586.0m, while Wynn’s Encore Boston Harbor posted $216.3m in revenue, up 13.4% year-on-year. However, the operator noted that its Wynn Interactive experienced a slight decline in revenue, with this falling 6.8% to $20.5m.

Turning to costs, total operating expenses for the quarter were 19.7% higher at $1.25bn, with the main outgoing being casino costs at $473.4m. Wynn also reported $167.4m in other, net finance-related costs in Q1, the majority of which was attributed to interest expense.

This left a pre-tax profit of $2.2m, in contrast to the $253.5m loss posted at the same point in 2022. Wynn paid $1.0m in income tax, meaning net profit stood at $1.1m, compared to a $254.6m loss last year.

However, when discounting an $11.2m loss attributable to non-controlling interests, this meant net profit was higher at $12.3m, again in stark contrast to the $183.3m net loss in 2022.

In addition, adjusted property earnings before interest, tax, depreciation and amortisation or rent costs (EBITDAR) for the quarter was 142.0% up to $429.7m.