Wynn Macau caps brand payments to parent company at $140 million
Wynn Macau's intellectual property fees paid to parent company Wynn Resorts (Nasdaq: WYNN) in 2024 are capped at $140 million.
This is according to a recent regulatory filing with the Hong Kong Stock Exchange (HKSE), Wynn Macau’s stock trading venue. The $140 million cap exceeds the $115.1 million cap set last year. In 2021 and 2022, the Macau franchisee paid its Las Vegas-based parent company a total of $74.8 million for the use of its brand and trademarks.
Such arrangements are common among major U.S. gaming operators with international subsidiaries. For example, MGM China announced an agreement with MGM Resorts International (NYSE: MGM ) in June 2023 to continue leveraging one of the gaming industry's most recognized brands. The U.S.-based company owns about 56% of the Macau company.
For Wynn and its Macau subsidiary, the agreement affects the Macau operator’s rights to use Wynn’s intellectual property, including logos, trademarks and related tariffs. Located in the heart of the world's largest casino, Wynn Macau operates its namesake venue and Wynn Palace. Wynn set the intellectual property cost cap to comply with Hong Kong Stock Exchange regulations.
Wynn License Agreement is Small but Important
Licensing agreements are common for gambling operators with strong brand recognition, Wynn being one of them. This is especially true in Macau, where Wynn is synonymous with luxury integrated resorts and attracting VIP bettors.
Wynn Macau and Wynn Resorts Macau will also pay $14.9 million this year to Wynn International Marketing, a subsidiary of the parent company, according to filings with the Hong Kong Stock Exchange. The filing shows cap payments to Wynn International Marketing are $17.9 million in 2025 and $21.5 million in 2026. These figures include benefits and compensation for Wynn International Marketing employees.
There is also a new upper limit on the design services provided by Wynn Design and Development Co., Ltd. to Macau enterprises. This year, Wynn Macau will pay the design department no more than $10.9 million. That limit will increase to $12.3 million next year and $13.6 million in 2026.
good time
A cap on the amount of intellectual property fees Wynn Macau pays its parent company comes as Macau franchisees enjoyed a win in 2023, with gross gaming revenue (GGR) more than quadrupling.
Operators including Wynn Macau will have total revenue of $22.7 billion in 2023. But this is still well below the peak of $36.3 billion in 2019, suggesting there is still plenty of room for further recovery in the Special Administrative Region (SAR) this year.
Last year's gross gaming revenue levels triggered a surge in non-gaming capital commitments from franchisees, suggesting it would be prudent for Wynn Resorts to limit brand payments for its Macau unit.
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Source: www.casino.org
