It’s been quite a year for MGM.
MGM Resorts experienced record-high consolidated net revenues in the third quarter. BetMGM played a significant role in its strong financial performance, with its net revenues growing nearly 20% compared to the previous year. This growth was more than double what the company saw in the second quarter.
"We are pleased to report record consolidated net revenues for the third quarter, driven by record results from MGM China. In Las Vegas, we drove sequential improvement throughout the quarter and many key metrics are demonstrating strength including growth in ADR and occupancy," said Bill Hornbuckle, CEO and President of MGM Resorts International in a statement. "MGM Resorts is well positioned for long-term growth driven by the positive inflection to come in our digital investments alongside the enviable integrated resorts pipeline of development that we have in Japan as well as opportunities in New York and beyond."
MGM Resorts also made strides internationally by partnering with Grupo Globo to enter the Brazilian market. The company plans to launch the BetMGM brand there, hoping to secure a sports betting and iGaming license to expand its digital presence internationally.
MGM Table Games Business Slips
One of the only blemishes in the report is table games, namely baccarat.
Quarterly revenue from its Las Vegas casino operations fell 13% to $476 million, while winnings from table games in the business came in at $328 million, down 19% from a year ago.
During the 3rd quarter investors call, MGM Resorts CFO and Treasurer, Jonathan Halkyard, explained that table-game revenue dropped compared to last year, mainly because of a decline in their high-end baccarat business. He said this depends on when their biggest customers decide to visit, which the company can't control, and unfortunately, fewer visits happened in the third quarter than expected.
Asked if he thought more business and convention travelers would start coming to the casino than regular vacationers, Corey Sanders, the COO of MGM Resorts, said that the company is happy with the current mix. He says they don’t expect much of a change over the next year.
Hornbuckle noted that when baccarat is excluded, the rest of their table-game revenue actually grew by 12%. He pointed out that if you ignore the top six or seven high-spending players, whose visit patterns were unpredictable, the revenue shortfall makes more sense.
He also mentioned that their retention of bets, known as "hold," decreased by 15% from the previous year. Combined with those missed business opportunities, this resulted in an $80 million shortfall in baccarat revenue for them.
MGM Resorts Looking To a “Sustainable” Future
The company's total revenue for the quarter of $4.18 billion came in below analysts' average estimate of $4.21 billion, but it’s not deterring the company from looking forward to brighter days.
"Since 2021, we have consistently demonstrated our commitment to returning cash to shareholders, reducing overall shares outstanding by 40 per cent,” said MGM Resorts International CFO and treasurer, Jonathan Halkyard. “Our balance sheet, characterized by low net debt and significant liquidity, positions us exceptionally well for strategic investments and sustained growth."
