The Trump administration’s push for tariffs has led Wynn Resorts to delay renovation efforts at the company’s Encore resort on the Las Vegas Strip.
In a quarterly earnings report released this week, CEO Craig Billings said the $375 million project would be delayed. Still, he felt the company could deal with the economic implications from the tariffs overall, save for larger capital expenses, according to the Las Vegas Review-Journal.
“We had a number of (capital expense) projects in flight in the U.S., and while we have sourced for those projects presuming some tariff impact, the current tariff rates have driven us to delay about $375 million of cap-ex projects, including the Encore Tower remodel,” Billings said.
The postponement comes a year after the company all but ended its online casino and sports betting operations in other states. In 2022, the company wanted to sell its online sportsbook, WynnBET.
Then, in 2023, it ceased operations in eight states. Last year, it sold its Michigan operations to Caesars Entertainment.
Dealing With Tariff Implications
The CEO added that the company is negotiating with alternative suppliers for food and beverages that might alleviate any tariff concerns. This comes after a massive year-over-year drop in first-quarter revenue. Income dropped from $729.2 million in the first quarter of 2024 to $277 million this year.
Billings said the company may undertake bigger projects once there is clarity on tariffs.
“Once tariff rates have settled, we will thoroughly re-spec and resource the most severely affected items,” he said. “While we’re staying nimble, the pace of change at the moment is just too significant to commit to revised timing on that cap-ex.”
Tariffs have also affected other casino operations around the country. Lance Morgan, the CEO of War Horse Casino in Omaha and Lincoln, Nebraska, recently said that the tariffs were costing the casino $3 million per day for equipment, including slot machines. The change in economic dynamics may delay the expansion of the properties and put plans for a third casino in the state on hold.
“I got an email from a slot machine vendor, one of the largest ones, and it said immediately that their prices are going to go up,” Morgan noted in a video on Facebook.
Despite those concerns, some analysts have predicted resilience for the casino industry. Most tariffs now stand at 10% after the administration delayed the previous 25% for 90 days, except for the 125% levied against China.
“Bottom line, we still think this is an industry that will be recession-resistant, given the dynamics of who the customer is, their income, and our belief that they have created a lot of wealth during the past five years,” Macquarie Group analyst Chad Beynon recently told Next.io.
“Obviously it is discretionary. Generally, gaming spend adds up to 75 basis points to 1% of individuals’ household income, so depending on what happens there, that could change. But what we have seen during recessions is that gaming tends to hold up well.”
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