During Tuesday’s earnings call with analysts and investors, MGM Resorts International President and CEO Bill Hornbuckle admitted that the company was reeling after experiencing a cyberattack on Sept. 11, 2023. “We were on our heels with a cyberattack. You all understand what that did to us.”
But instead of struggling in the wake of the attack, MGM Resorts went on to post record revenue for the fourth quarter ($4.4 billion) and the year ($16.2 billion).
Hornbuckle noted that that MGM’s revenue was buoyed by a stellar roster of events, notably the Formula 1 race in November and the buildup to the recent Super Bowl LVIII at Allegiant Stadium. A reprise of 2023 might not seem feasible, but the CEO noted the many reasons to be optimistic.
“Just off the top of my head, Madonna’s coming, (Bruce) Springsteen’s coming, the (Rolling) Stones are coming, to just name three,” he said. “We have a great football kickoff with USC and LSU. March Madness is always big around here. And then Formula 1 rolls back around again. … If you think about the stretch we’ve just been through, it was an amazing stretch and an amazing year. Replicating that won’t be easy. But we still have plenty of content and activity to fill the void and the dates.”
Hornbuckle admitted he had reservations about whether Las Vegas hosting the November Formula 1 race would be of value. But he’s now behind it, although MGM will be making some adjustments.
“I was skeptical going in,” Hornbuckle said. “But I clearly want to host it again. When it comes to Formula 1, we’ll be more cautious on on pricing (for lodging) in some of our outlier properties. We got paid well for Bellagio, Aria, and Cosmopolitan along the track. The farther away you got from the track, with a couple of exceptions, MGM held in there, because of the adjacency to paddock. There’s an opportunity to do that better and get more occupancy and get people back into the town.”
BetMGM remains a priority, but Hornbuckle cautioned that returns on that investment will probably not occur until 2025. This year, instead, will be a “reinvestment year.”
“Obviously, you’ve seen we’ve lost share,” Hornbuckle said. “In both instances of the two folks who sit about us (DraftKings and FanDuel), we’re being outspent two, two-and-a-half to one in terms of raw marketing dollars. We want and need to get our product in a better and different shape. We want more parlays. Obviously, the acquisition of Angstrom by our partner (Entain) will be a big add to that and we’ll be able to stick out more product, we’ll have more confidence in it, the market will be better, etcetera. That’s part of what will be developed, starting with baseball this year, and by the time we hit football next year, a lot of the product differentiators we hope to have will be in play.”
Chief Financial Officer Jonathan Halkyard stated that MGM has $1 billion in excess cash that will be allocated to “international digital acquisitions, high- ROI capital projects, and share purchases.” Hornbuckle noted that some of those funds are earmarked for the purchase of sports technology and possibly other igaming features and tech.
“We obviously want to be in on our own sports betting business with our own technology,” Hornbuckle said. “… We’re on the heels of a deal for live dealer, where we’ve talked about and had a vision of broadcasting live games from Las Vegas to the rest of the world, with some celebrity and some entertainment tied to them.”
Hornbuckle added that he’s soon travelling to Brazil, which is on the verge of making igaming and sports betting available.
“We plan to be there when that launches,” he said. “We’re focused on building that business at its core into a real business.”
