Bolstered by an outstanding second-quarter report, MGM Resorts International is intent on being aggressive in attaining its ultimate goal.
“We’ve been busy this year with our vision to be the world’s premier gaming company,” CEO and President Bill Hornbuckle said Wednesday during a second-quarter earnings conference call. “I could not be prouder of the progress we’ve made, but understand that there’s more work to be done.”
MGM reported net revenue of $3.3 billion for the quarter and net income of $1.8 billion. Hornbuckle termed the company’s $920 million adjusted property EBITDAR for the Las Vegas Strip “our highest ever … in the history of Las Vegas.”
One reason for Hornbuckle’s optimism is the success of recent deals MGM has closed. Acquisitions of the Cosmopolitan and the Aria Resort & Casino contributed to revenue of $2.1 billion for the company’s Las Vegas Strip properties in the quarter, a 113% increase over 2021. The sale of MGM’s Gold Strike Tunica property in Mississippi to Cherokee Nation Entertainment Gaming Holdings in June will yield $450 million when the deal is finalized, projected to be in early 2023. MGM also is selling the Mirage in Las Vegas to Hard Rock International for $1.08 billion, a deal that is expected to close by the end of this year.
In June, MGM offered to buy Swedish online gaming company LeoVegas in May for $607 million and is interested in pursuing a larger presence in the New York gaming market.
“We’re hopeful New York will solicit applications by the end of the year for one of three additional casino licenses,” Hornbuckle said. “We’re eager to respond and expand our existing property at Empire City, which is less than 15 miles from Manhattan, with an attractive footprint for development and growth.”
In response to a question, Hornbuckle admitted the company would be interested in acquiring 100% of BetMGM, its sports-betting interest it co-owns with Entain.
“We think about it all the time, of course,” Hornbuckle said. “It would be foolish to think otherwise. But you can’t buy what’s not for sale. We remain keenly focused on BetMGM. We’d like more of it. We have a great partnership (with Entain) and that business is working well, because of what we ultimately all provide: our IP, our database, their technology.”
Hornbuckle cited the return of foreign visitors and convention business, the forthcoming Formula 1 race in November 2023, and Super Bowl LVIII scheduled for Allegiant Stadium in 2024 as indications that Las Vegas’ rebound from the pandemic will continue. But he admitted that staffing issues – MGM currently has 4,000 jobs available compared to 1,200-1,500 in 2018-19 – are problematic.
“We still have some key areas, like most people in hospitality, around housekeeping, security, cooks, that we struggle with in terms of getting people back to work,” Hornbuckle said. “… But I’m not overly concerned. Things like F1 will be a significant undertaking, not only for the community, but the company. We’re trying to get ahead and assemble teams around all of that in terms of the opportunity, which is amazing.
“Generally speaking, we’re in decent shape. We’re not running around with our hair on fire, if you will, anymore.”