Wynn Resorts, Limited WYNN has decided to end talks regarding the sale of $2.6-billion Encore Boston Harbor to MGM Resorts International MGM. Last week, the companies announced that the discussion was in the preliminary stage.
Notably, Wynn Resorts, which received its Massachusetts license in 2013 for the construction of 671-room Encore Boston Harbor in Everett, MA, is likely to open the property in June. It expects to have 8 million visitors every year at the casino that will have 242 table games as well as 3,158 classic and state-of-the-art slot machines.
However, MGM Resorts, which already operates a casino in Springfield, wouldn’t have been allowed to operate two casinos in the same state. Per Massachusetts law, a company can have only one casino license in the state.
Moreover, management at MGM said, “We have noted the anxiety raised by various stakeholders regarding a transaction and this troubles us at MGM. We only wish to have a positive impact on communities in which we operate.”
These apart, in April, Wynn Resorts was fined $35 million by Massachusetts Gaming Commission for not disclosing the sexual misconduct allegation against Steve Wynn, the company’s former chief executive officer. However, the Massachusetts Gaming Commission had allowed the company to keep its casino license.
Shares of Wynn Resorts have gained 24% year to date compared with the industry’s 14.8% growth.
This Zacks Rank #3 (Hold) company generates a solid share of its revenues from Macau resorts. Apart from the gaming business in Macau, Wynn Resorts has been increasingly focusing on driving non-gaming revenues. Given the decent visitation pattern in Macau, infrastructure development and government’s efforts to boost tourism in Macau, non-gaming sources are expected to boost revenues, going forward.
Better-ranked stocks worth considering in the same space include Century Casinos, Inc. CNTY and Las Vegas Sands Corp. LVS, each carrying a a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Century Casinos has an impressive long-term earnings growth rate of 25%.
Las Vegas Sands’ current-year earnings are likely to witness 3% growth.
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