Resort and casino operator Wynn Resorts (WYNN) relies heavily on the Chinese gaming market. The company pulls in around 75% of its total revenues from China. WYNN has enjoyed steady gains over the last year, weathering a sexual misconduct scandal centered around the company’s founder – Steve Wynn. Mr. Wynn has liquidated his holding in the company, which in March announced it would issue a 4.9% stake to one of its biggest competitors in the Chinese market – Galaxy Entertainment, a deal worth around $1 billion. WYNN’s license in Macau will expire in 2022, and cutting ties with Mr. Wynn and having a local partner greatly increases the company’s chances of extending its license. It should also give WYNN an advantage when the time comes to apply for a license in Japan, which is preparing to legalize gambling, and whose market could generate $25 billion in revenue when casinos begin to operate in the country in 2023. WYNN trades at $191.62 with an average price target of $205.25.
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