Melco Resorts & Entertainment profit plunges as VIPs get lucky

Casino operator Melco Resorts & Entertainment (MRE) reported steep drops in revenue, earnings and profit as Macau’s VIP gamblers went on an extended winning streak.

Figures released Thursday show MRE’s overall net revenue hitting $1.22b in the three months ending September 30, an 11% fall from the same period last year. The company claimed that the decline would have been only 5% were it not for a new revenue recognition standard adopted on January 1.

Regardless, Q3’s adjusted earnings were down 26% to $295.4m, operating income was down 57% to $83.6m and net income plunged 91.7% to just $9.6m. It’s possible that part of this plunge came from a “one-time special gift” of an extra month’s salary to non-management employees that MRE originally mentioned in August.

During the analyst call, CEO Lawrence Ho said the payment was related to MRE’s “pension plan” but declined to confirm whether this disbursement would become an annual event. As proof that misery (at least, for management) loves company, Ho said he would discuss the issue with other Macau casino operators, which would likely cause those operators’ staff to clamor for similar windfalls.