Wynn Resorts Limited (WYNN) has dropped its plan to open a casino in Philadelphia, Pa. Wynn’s board of directors took the decision after taking into account a host of factors, primarily the performance of the Philadelphia market in the past one year and rising competition. Philadelphia was ranked the sixth largest casino market in the U.S. last year. The recent approval of gaming in the State of New York and the legalization of new resort-style casinos in the city will eventually translate into greater competition.
Wynn Resorts was one of the six applicants seeking license in Pennsylvania’s most-populous city for this casino project that was expected to cost $926 million.
Per a Bloomberg report, Atlantic City, N.J., has been witnessing declining gambling revenues for the past six years partly due to competition from neighboring states. Wynn’s cancelation of the project seems to be an effort to remain on the safe side anticipating a similar downfall in Pennsylvania.
For now, the company believes that it is better to pursue business opportunities elsewhere. Meanwhile, the company is considering a $1.2 billion casino project in Everett, Mass., outside Boston.
In Oct 2013, the company posted strong third quarter results driven by improvement in Macau and Las Vegas. The company’s strong brand and its ability to navigate in a difficult operating environment keep it well positioned. The company presently has a Zacks Rank #2 (Buy).
Other stocks worth considering in the hotel industry are Century Casinos Inc. (CNTY), Las Vegas Sands Corp. (LVS) and Melco Crown Entertainment Limited (MPEL), all with a Zacks Rank #2.