Wynn Resorts is becoming increasingly cautious in its global expansion, especially under the pressure of capital allocation and the uncertainty of casino legislation in Thailand, causing its expansion plans in Southeast Asia to waver.
According to financial institution Octus, Wynn's senior management is prudently assessing investment returns in various locations to ensure capital flows to the "most valuable" projects. Currently, Wynn is advancing multiple development projects, including in Las Vegas, Everett, Massachusetts, and the flagship project Wynn Al Marjan Island Resort in the UAE, which has received an investment of $5.1 billion and is 60% complete, expected to open in 2027.
Kyle Owusu, Director of Credit Research at Octus, pointed out that Wynn is currently facing intense competition in capital allocation, and development projects in various locations must compete with stock buybacks and global investments. For example, the expansion of Encore Boston Harbor in Massachusetts was temporarily halted at the beginning of 2023 due to tax disputes, and Wynn has also withdrawn from the New York casino license competition, reflecting its cautious attitude.
CEO Craig Billings stated in the 2024 financial report conference call that the UAE project is nearing completion, and the company will reach a "free cash flow inflection point," with capital expenditures in North America subsequently contracting.
This has also changed Wynn's assessment of the Thai market. Although the CEO has repeatedly described Thailand as a potential market with "attractive transportation and tourism infrastructure," the company has now adopted a wait-and-see attitude, waiting for clearer regulations.
Despite the Thai Deputy Minister of Finance previously showing an open attitude in meetings with Wynn and MGM, the Thai casino bill suffered a major setback this month: the Prime Minister was suspended, and the bill was withdrawn. The bill stipulated that Thai citizens must pay an entry fee of 5,000 Thai Baht and have an account balance exceeding 50 million Thai Baht, severely compressing the local customer base.
Owusu stated that if the legislation remains unresolved for a long time, Wynn may concentrate its funds on more certain regional projects, and the Thai expansion plan will inevitably be delayed. At present, the "Thai casino dream" is caught in regulatory and capital uncertainty, and the direction of Wynn's layout in Southeast Asia remains unpredictable.
