LAS VEGAS -- Don’t put all your money on the house just yet. Two of the nation’s biggest casino operators reported earnings Monday that showed improvement over last year but missed analysts’ expectations.
Wynn Resorts Ltd. said Monday that it made less money than expected in the Chinese gambling enclave of Macau, even though its Las Vegas revenue rose by more than 16 percent. Caesars Entertainment Corp. posted a smaller loss than last year for its fiscal second quarter, it suffered from a slowdown in the number of gamblers hitting the Vegas Strip.
Both companies have shown interest in entering the Florida market should the state decide to change current laws that allow gambling only on tribal lands and a parimutuels.
Caesars, which owns or manages more than 50 casinos, most of them in the U.S. and Britain., saw casino revenue decline by $116.8 million, or 7.5 percent. CEO Gary Loveman said food and beverage sales may ultimately replace those dollars.
Caesars attributed the drop in gambling revenue to fewer patrons. The company also pointed to increased competition in regional markets, as states open the door to commercial gambling, and the elimination of some less profitable marketing strategies.
Loveman, a former Harvard professor, has made a name for himself with innovative loyalty programs that encourage customers to keep coming back.
Casino patrons, especially younger ones, are increasingly turning away from gambling, and Las Vegas moguls are attempting to make up the difference with lavish nightclubs, decadent restaurants and boutique hotels.
Caesars opened the upscale Nobu Hotel within the sprawling Caesars Palace casino this year, and is in the process of transforming Bill’s Gamblin’ Hall & Saloon into the luxury Gansevoort Las Vegas and building Linq, a new project designed to appeal to Gen Xers.
Caesars said that its net loss for the three months ended June 30 shrank 12 percent, to $212.2 million, or $1.69 per share, from $241.7 million, or $1.93 a share, last year. Revenue edged down to $2.16 billion, from $2.16 billion in the 2012 second quarter. Analysts had expected a smaller loss of $1.40 per share on higher revenue of $2.18 billion, according to FactSet.
The company’s shares closed at $15.58, up 10 cents, or .65 percent.
Caesars is the only major U.S. gaming company without a presence in Macau, where Wynn saw robust growth in the first quarter. In the second quarter, though, Wynn’s revenue was up by just 2.6 percent, in part to hotel renovations that limited the number of available rooms.
Revenue from Wynn's two properties on the recently sluggish Las Vegas Strip soared by 16.2 percent compared with last year. Excluding special items, Wynn made $1.51 per share on revenue of $1.33 billion in the latest quarter. But analysts polled by FactSet forecast, on average, earnings of $1.57 per share on revenue of $1.34 billion.
Results were released after the markets closed in New York and sank slightly in after-hours trading.
In a conference call with analysts Monday, CEO Steve Wynn warned against interpreting the relatively strong showing in Las Vegas as a sign that Sin City is finally bouncing back along with the rest of the U.S. economy from the crushing blow dealt by the Great Recession.
“I think we are having a limp-wristed sort of crawl out of a hole, but a recovery is a more robust word,” he said.
Instead, the billionaire casino mogul attributed the jump in revenue from the Wynn Las Vegas and Encore casinos to the “premium niche” the company has carved out in Macau. Wynn noted that the company is refurbishing 600 rooms in the Wynn Macau Resort, which opened in 2006, and the renovations have taken a sixth of the available inventory out of commission.
The company is building a second Macau casino resort in the peninsula's Cotai district expected to open in the first half of 2016. Total revenue was up by 6.3 percent, but income was down 6 percent, to $129.8 million, in part because the company retired debt early.
Miami Herald staff contributed to this report.