MGM Resorts International CEO Bill Hornbuckle spoke optimistically about future development projects, including gaming in the United Arab Emirates, and noted that ticketing changes to the Formula 1 race in Las Vegas will benefit the entire Strip and downtown.
Hornbuckle participated Thursday afternoon in a broadcast of the J.P. Morgan Gaming, Lodging, Restaurant & Leisure Access Forum.
The CEO highlighted the company’s project in Japan, which will launch construction in summer 2025 for a 2030 opening, the prospects of being awarded a gaming license in New York, and the outlook for the non-gaming hotel project in Dubai; Hornbuckle noted that the UAE hotel “could convert into a casino.” He added that MGM is “ideally suited” for Thailand and other markets that open up.
“Whether it’s digital or brick and mortar, we’re in great shape to continue to expand as a company,” Hornbuckle said. “Las Vegas is in great shape and the regionals are holding fine.”
As for the UAE, Hornbuckle called a proposal to allow a lottery and digital gambling for Abu Dhabi “fascinating. We would hope for an opportunity in Abu Dhabi, which we will pursue, or Dubai,” Hornbuckle said. “We’ll go after one, recognizing that the ruler of each Emirate has to approve that.”
Hornbuckle said they’ve been on the ground in Abu Dhabi for 18 months and have a good idea who the government will appoint as the development partner. MGM has been asked for proposals, he said.
“I think they’ll go quick (in months) in identifying a partner and not years. Ultimately, presuming the decree actually happens and the regs come out, we would go forward very quickly from there.”
Former MGM CEO Jim Murren is now chairman of the UAE’s gaming commission; Hornbuckle said it’s made up of a robust group of regulators. “We hope post-Ramadan, we’ll begin to see some activity (with the regulatory body).”
Thailand is in its early days, so the question is, “Will the regulatory regime be at a high-enough level that it holds muster and will the government participate in the proper way going forward? Until we see that, we can’t speak to it.”
J.P. Morgan analyst Joseph Greff said one takeaways from MGM executives is that Las Vegas continues to perform well at the higher end with no discernible pullback in consumer spending, though modest degradation was noted further down in the consumer spectrum.
MGM emphasized significant progress with its recently launched Marriott booking platform, performing well ahead of internal expectations. It benefits MGM with a lower booking cost, potentially greater out-of-the-room spend, and a higher average daily room rate, Greff said. Longer term, MGM believes its relationship with Marriott can drive convention activity to its properties, as the annual national rotations among markets open up new opportunities. MGM thinks the incremental EBITDA can more than offset union-wage increases in 2024, according to Greff.
With respect to the F1 race in November, MGM sees profitability from this event “modestly better” as it tailors pricing more effectively to mid/low-end consumers and increases engagement outside of the main race event, Greff said.
“We’ve had extensive conversations with them,” Hornbuckle said of F1. “We all got very aggressive last year, from Bellagio down to Excalibur, not knowing how ticket sales would come in. Now tickets are going on sale again. Places farther away from the track at the south end of the Strip won’t be at the same rate structure as last year. What ended up happening was the crowd that came was great and we did very well, but the south end of the Strip and downtown were hurt by it. It’s the only citywide event I can remember in decades that didn’t help the totality of the city. We think we structured this thing differently —single-day versus three-day tickets, cheaper tickets. The way we all think about rooms and packages is different. We’ll go into this with a different mindset that will be productive for us.”
In the U.S., MGM is content with digital-market positioning, but seeks to enhance its parlay product to achieve a mid-teens mix of bets up from its current high-single digits, and believes igaming legislation will progress over the next few years in markets like Illinois, Indiana, Texas, and Georgia, Greff said.
MGM also expects a single wallet to launch in Nevada this spring, which could provide a meaningful uplift to its omni-channel acquisition strategy, Greff said. It recently launched the same app in Nevada as is used elsewhere.
Additionally, conversations with U.S. joint-venture partner Entain regarding operational decisions for BetMGM have become more transparent since Entain’s recent leadership change and MGM is seeing increased focus on iterating its product to a more U.S. focused customer, Greff added.
“In almost any U.S. marketplace, whether it’s igaming or sports, we’re basically the number-three operator,” Hornbuckle said. “We’re the only brick-and-mortar operator at that scale. We’re pleased with where we are, but we’ve recognized over the last 12 months or so that we lost share in sports betting and a lot of the changes you see in Entain have centered around other things. But the principal thing is our product isn’t where it should be. Entain bought a group called Angstrom Sports and that will enable us to expand our parlay product. If you look at DraftKings’s and FanDuel’s offerings, their margin is up 200 to 300 basis points from ours because of their parlay products.”
MGM’s Live Dealer is expected to launch in the near future under the LeoVegas brand. Internationally, the BetMGM brand is expected to launch in two more markets this year beyond the UK, Greff said.
MGM also indicated its international business could generate $500 million of EBITDA at maturity if the Brazil market takes off and they can achieve 10% to 15% market share.
In Macau, MGM sees market share eventually stabilizing in the mid-teens and aims to invest in more suite products. Currently, according to Greff, just 3% to 3.5% of all suites in Macau are MGM’s.
