Coronavirus

With Wynn’s $402M In Net Losses, Is Online Gambling The Future Of Gaming?

gambling

With results that show how COVID-19 closures are impacting the gaming industry, Wynn Resorts Ltd. reported a net loss of $402 million for the first quarter of 2020. While the results mark a drop into the red from income of almost $105 million a year before, CEO Matt Maddox foresees built-up demand waiting to be released for leisure activities.

The executive noted in The Wall Street Journal that individuals were visiting beaches in Southern California in droves, and eateries were opening for business once again in Texas. Maddox said, according to the paper, “We’re going to have a very safe environment, but we will have an environment that I think a lot of people will want to come participate in.”

The company’s Las Vegas properties closed on March 17, and authorities in Nevada have not put a date into place for when casinos can open again. Maddox said per the report that the company’s casinos could potentially reopen late this month. Wynn Resorts runs the Encore and Wynn properties on the Strip as well as properties in Macau and the Encore Boston Harbor.

However, consumers are reportedly turning to online casinos and sportsbooks, as the pandemic has closed brick-and-mortar casinos in markets such as the United States to minimize risk. This is bringing about heightened revenue for online gambling platforms in states such as New Jersey — trends in growth that may continue beyond the health crisis.

New Jersey issued closing orders for brick-and-mortar casinos March 16. Revenues for its casinos plummeted by 61.7 percent that month compared to March 2019, according to the latest PYMNTS Disbursements Tracker, its gaming revenues over the same period jumped 65.7 percent.

The report also noted that online gambling or gaming sites are expecting major growth in the U.S., reaching a value of $102.9 billion by 2025.

Online casinos, however, need to fix one sticking point — the speed at which consumers receive their winnings. Digital betters are not likely to be satisfied waiting five days for an automated clearing house (ACH) settlement or even paper checks sent through the mail, which is a challenge that U.S. government entities are contending with as they try to mail anticipated stimulus checks.

Even with the challenges of online gaming disbursements, the latest results from a major gaming operator illustrates the financial impact of COVID-19 on casinos as they grapple with virus-related closures.

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