During a question-and-answer session Thursday, MGM Resorts President and CEO Bill Hornbuckle was guardedly optimistic about the company’s ongoing recovery from the COVID-19 pandemic and the future of sports betting and igaming.
But Hornbuckle was unreservedly bullish about MGM’s brick-and-mortar casinos, especially in Las Vegas, during a session of Bernstein 37th Annual Strategic Decisions Conference.
“We are literally on fire in Las Vegas right now,” Hornbuckle said, noting MGM’s properties were over 90% capacity over Memorial Day weekend. “What’s fascinating to me is people’s propensity to game is higher we’ve ever seen. In 17 of our 18 properties, we broke slot records. . . . We’re back with a vengeance.”
Hornbuckle was named MGM’s CEO on July 3, 2020, after serving as the acting CEO for 100 days. He said as restrictions caused by the pandemic are rolled back, a key issue will be how MGM diversifies.
“Where do we go, how do we balance our revenue, whether it’s Asia, digital or here, so we have a little less reliance on what happens here,” Hornbuckle said. “And potentially more reliance on digital opportunities domestically and internationally through BetMGM.”
Hornbuckle added it was also important that the MGM properties in Asia, notably MGM Cotai in Macau, recover from losses suffered due to the pandemic.
“We’re operatives by nature, fundamentally, so we’re keenly focused on driving this thing back to a full recovery,” Hornbuckle added.
Interviewer Vitaly Umansky noted that MGM earlier had estimated the combined markets for sports betting and igaming would reach $32 billion in the U.S., with a $4.5 billion Canadian market. Hornbuckle said the $32 billion figure was based on 200 million sports bettors, and 100 million people having access to igaming.
Hornbuckle said that while sports betting is about halfway there, igaming still requires some work – and is where the potential for profit exists.
“The real value to this business and the economic opportunity is in igaming,” Hornbuckle said. “Sports is going to create and has created a great deal of momentum. … We know there’s long-term value in all of that. But I think igaming becomes the economic secret to this business.”
Hornbuckle noted that in the five states where MGM is in igaming, it ranks either first, second, or third in revenue. He also added that being first to market is critical to success for online gaming ventures.
Other topics addressed by Hornbuckle:
If investors should be worried about the pace for legalization of sports betting and igaming:
Hornbuckle: “Once you’re in the business and get confidence around the business’ ability to control responsible gaming and other social issues that come up, you gain that confidence and you’re more excited to go and progress. It’ll take time, like all of these things, and it’ll take education to understand, particularly from an automated perspective, the types of things that are in play from a responsible gaming perspective.”
What are the prospects for operators in igaming and sports betting over the next decade?
Hornbuckle: “I see it much like the telecom industry. There will be four, maybe five key operatives, and there will be real consolidation in between. You’ve seen some of the media companies try to get in, whether it’s ESPN or others, get into the space in some way, shape or form. I think that will continue. But I have a little bit different view of that: Sports betting is still done on the device in your hand, not on the television screen. So, the cost of access, the cost of opportunity, again will keep folks out.”
Will online gaming cannibalize brick-and-mortar casinos?
Hornbuckle: I have zero concerns. I’ve heard this argument all the way back to riverboats. … Having always been based in Las Vegas, always been an operator of these large-scale resorts, it continues to grow every single year, by and large, over the last 20 years.
