Operator News
US – MGM says expanded New York gaming more appealing than Chicago investment
By Phil - 29 April 2021
MGM Resorts seems to have pulled out of the race for a casino in Chicago citing a ‘complicated and tax structure’ that didn’t ‘marry up’ there.
Speaking at the company’s latest earning call, MGM Resorts CEO Bill Hornbuckle said: “We’re just not keen or focused on it at this time.’
Instead he said: “With recent developments in New York, we look forward to working with the legislature on a potential path for a full-scale casino license in Empire City.”
When asked about all the main gaming opportunities in the US at the moment, Jonathan Halkyard said: “Texas is of course of interest, although it didn’t get through the legislative session, so the discussion is two years. Florida is complicated as you know, and we are watching that closely. Obviously, the governor just made a deal with the tribe. And so we’ll see how that pans out, both in the context of land-based as well as sports betting. Georgia is probably not any immediate horizon. And obviously we spend a great deal of time and energy there. We know the marketplace well. It would have to be under the right circumstance. And Chicago is just complicated. The history there in Chicago, the tax and the notion of integrated resort at scale don’t necessarily marry up. And while I think they’ve had some improvement. We’re not overly keen or focused at this point in time there.”
The remarks came as MGM Resorts reported net revenues of $1.6bn, a decrease of 27 per cent compared to the prior year quarter, in its first quarter of the year.
The operator said: “While the prior year quarter was negatively affected by property closures for a portion of the quarter, the current 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.”
Consolidated operating loss was $247m compared to consolidated operating income of $1.3bn in the prior year quarter, which included a $1.5bn gain related to the MGM Grand Las Vegas and Mandalay Bay real estate transaction.
“We are pleased with the meaningful progress we’ve made on multiple fronts this quarter,” said Mr. Hornbuckle said. “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. Our regional properties achieved record first quarter Adjusted Property EBITDAR and Adjusted Property EBITDAR margins. Las Vegas operating results improved sequentially, leisure demand is improving, and we now have a tangible path to bring conventions and entertainment back at scale. MGM China continued to outperform the broader Macau market’s gradual pace of recovery.”
“We are also deeply focused on our long-term goals including investing in digital to drive deeper customer engagement and BetMGM, our U.S. sports betting and iGaming venture, which continues to impress as the leading operator in US iGaming and the top three operator in U.S. online sports betting. Our future is bright.”
“Our robust liquidity position provides us with significant flexibility amid an improving operational backdrop. As such, we have begun to return capital to shareholders through share repurchases during the first quarter,” said Jonathan Halkyard, Chief Financial Officer and Treasurer of MGM Resorts. “Going forward, we will be disciplined in allocating our capital by maintaining a strong balance sheet, pursuing targeted growth opportunities and returning cash to shareholders.”
