MGM Resorts riding high after first quarter earnings
Sell out of Conor McGregor fight in Las Vegas
By Buck Wargo – SiGMA US correspondent
MGM Resorts International reported its best quarterly results in Las Vegas since reopening its casinos and cited record adjusted earnings across regional US properties as the company makes gains in iGaming and sports betting.
MGM President Bill Hornbuckle said Wednesday during a conference call with Wall Street analysts that there’s been significant progress in COVID-19 trends and that business has “improved significantly” since February. He cited increased vaccinations, improved consumer sentiment and loosening of state’s operating restrictions as aiding gains.
Back to business
MGM has opened eight shows across its US properties and plans to bring back large-scale shows in Las Vegas and its regional properties this summer that will further boost recovery.
“In July, T-Mobile Arena is set to host the Conor McGregor UFC fight, and you can’t get tickets for this event,” Hornbuckle told analysts. “We sold 20,000 tickets in 22 minutes. That is one of the many examples of the clear demand for entertainment.”
MGM’s Las Vegas Strip net revenues during the first quarter were $545 million, a 14 percent increase from the fourth quarter, while adjusted earnings were $108 million, double that of the fourth quarter of 2020.
Margins increased 20 per cent due to an increase in leisure travel and cost controls, executives said.
Hornbuckle said it’s been “great to see Las Vegas come alive again and the vibrant destination that we have all come to enjoy.” He said gross bookings during March were one of the best months in the company’s history.
MGM’s hotel Strip room occupancy was 46 per cent compared to 38 per cent in the fourth quarter. March had 62 per cent occupancy and weekends had 85 per cent occupancy.
MGM officials said that demand is continuing to increase with expectations for 93 per cent capacity in June and 99 per cent in July even with little international travel.
Casinos are benefitting from vaccinations with those 50 and older returning to properties in Las Vegas and across the country in greater numbers and in some segments reaching 2019 levels, Hornbuckle said.
August will be the first month when Las Vegas room rates will be at higher levels than they were prior to the pandemic in 2019.
The earnings call comes as capacity is increased through county regulators from 50 to 80 per cent on May 1 with the expectation it will be increased to full capacity by June 1.
Over the summer, the expectation is that weekdays will increasingly be driven by meetings and conventions and that group business will be strong in the second half of 2021.
Group business for 2022 and 2023 is on pace with pre-COVID levels.
BETMGM/ENTAIN
Hornbuckle cited its partnership with Entain in the app BETMGM used for US sports betting and iGaming and a positive trajectory.
They expect revenues from operations to surpass $1 billion in 2022, and that the US market share to be between 20 and 25 per cent and the long-term adjusted earnings in the 30 to 35 per cent range.
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