MGM Resorts International CEO Bill Hornbuckle all but took the company out of the bidding for an integrated resort opportunity in Chicago, telling analysts Wednesday the city’s casino process has had a “complicated tax structure.”
In response to a question from Truist Securities gaming analyst Barry Jonas about U.S. expansion opportunities, he said the Chicago opportunity, “doesn’t marry up.” The city released launched its request for proposal process last week with responses due by Aug. 23.
It had been thought MGM Resorts would bid on the downtown Chicago resort, which is to include a 500-room hotel as well as gaming and non-gaming attractions since the company was one of four casino operators that provided input when the city sought information on the process.
MGM Resorts CEO Bill Hornbuckle photographed for Premier Magazine on August 15, 2017. (R. Marsh Starks / UNLV Creative Services)
“We’re just not keen or focused on it at this time,” Hornbuckle said. He added the company would be interested in operating a casino in Texas, but “that discussion is two years away.” Hornbuckle added that casino opportunities in Georgia are “probably not on the immediate horizon,” while Florida’s new gaming agreement between the state and the Seminole Tribe that could include sports betting was, “complicated.”
MGM Resorts still plans to submit a bid for a long-stalled integrated resort in Osaka, Japan later this summer, and it’s unclear if New York lawmakers will allow the company to expand its slot machine-only Empire City Casino in Yonkers into a full-scale casino.
Hornbuckle’s remarks on gaming expansion came toward the end of the company’s first-quarter conference call in which MGM’s leadership said they believe the casino giant is on pace to achieve certain pre-pandemic 2019 operating levels by later this year.
Much of the focus was on Las Vegas, where he said MGM Resort’s group and convention business has seen increased bookings for the last half of the year and that bookings for 2022 and 2023 are nearing the pace company saw in 2019.
He noted a UFC card featuring Conor McGregor for July sold out 20,000 seats at the company’s T-Mobile Arena in Las Vegas in less than two hours. Other concerts and major events have also quickly sold out their available seats.
“We’re doing our part to help the city get back to 100% (capacity),” Hornbuckle said. The company has opened up COIVD-19 vaccine clinics in Las Vegas and at regional properties to vaccinate its workforce, their families, as well as the company’s entertainers.
First-quarter results
In the quarter, MGM Resorts’ overall net revenues declined 27% to $1.6 billion compared to the year-ago first quarter when the company’s operations in eight states began shutting down in response to the COVID-19 pandemic. MGM CFO Jonathan Halkyard noted the revenues were larger than the $1.5 billion the company saw in the last three months of 2020.
The company said the 2021 first quarter was negatively affected by midweek property and hotel closures, lower business volume, and travel activity, and ongoing operational restrictions due to the pandemic primarily at its Las Vegas Strip resorts.
“Consumer demand strengthened at our domestic properties, and the significant changes we’ve made to our operating model have positioned us to capitalize on the recovery,” Hornbuckle said.
MGM Resorts said its Las Vegas Strip properties saw net revenues declined 52% to $545 million due to the pandemic and operational restrictions, including midweek property and hotel closures at several resorts. The company’s regional operations saw revenues decline 2% to $711 million.
Hornbuckle said the company’s high-value customers and others age 50 and over are beginning to return. He said there has been a noticeable improvement from the age 65 and over customer range. He said that trend is continuing into April.
Overall, MGM said it lost $322 million in the quarter, compared to net income of $807 million last year. The 2020 first quarter was helped by a $1.5 billion gain related to the sale of the real estate from the MGM Grand Las Vegas and Mandalay Bay.
At MGM Macau and MGM Cotai, the company recorded revenues of $296 million from its joint venture in MGM China, an increase over the 2020 first quarter. In Macau, MGM said the first three months of 2021 were not as heavily impacted on travel restrictions as the company’s properties experienced a year earlier.
During the quarter, MGM Resort reduced its ownership stake to 42% in real estate investment trust MGM Growth, earning $1.2 billion through the stock redemption.
MGM Resorts had long-term debt of $13.2 billion on its books and more than $6.17 billion in cash as of March 31.
Shares of MGM Resorts, traded on the New York Stock Exchange, closed at $42.02 on Wednesday, down 18 cents or 0.43%.
Howard Stutz is the executive editor of CDC Gaming. He can be reached at hstutz@cdcgaming.com. Follow @howardstutz on Twitter.
