Wynn warns of U.S./China tensions

Tuesday 18th of August 2020

Wynn Resorts has warned that the rising tensions between the U.S. and China could negatively impact its business prospects, including its ability to communicate with customers.

In a filing to the Hong Kong Stock Exchange announcing plans to issue new senior notes, the operator provided a business update in which it pointed to the recent decision by the U.S. government to ban the use of WeChat, which is widely used by Wynn’s Chinese customers. “We are unable to ascertain the scope of the ban at this point and there is no assurance that the ban will not adversely affect our ability to communicate with certain of our customers,” it said.

Wynn said the increasingly hostile environment, with tit for tat retaliation and punitive measures against businesses and individuals, are a threat to the stability of the global economy.

The operator, whose license to operate in Macau expires in 2022, added “our business and prospects may be negatively impacted by the fact that we are majority owned by a U.S. company should the U.S.-China relationship further deteriorate.”

Wynn said it expects the premium segment to lead any recovery in the Macau gaming market and that it will break even on an EBITDA level once its revenue reaches 40 percent of its pre-crisis levels.

In the meantime, it has cut its daily operating costs to HK$15.5 million ($2 million) from $23 million in Q4, 2019.