Casino operator MGM Resorts International posted a $217.3m loss in Q1 2012, a significantly greater sum than the $89.9m loss of Q1 2011. Blame for the downturn is being put on increased tax expenses, repayment of certain debts and a decrease in table game hold. Revenues for the quarter were up 51% to $2.29b, reflecting the inclusion of results from MGM China’s lucrative Macau operation, the joint venture of MGM and Pansy Ho. Take away the Asian operations and MGM’s revenue was up a more modest 5%.
Revenue at MGM’s Las Vegas properties was aided by a rise in room occupancy from 87% to 90%. On the downside, table game hold percentage at the Aria at CityCenter (in which MGM holds a 51% stake) was significantly down, falling from 27.4% last year to 16% this quarter. Casino revenue at MGM’s other wholly-owned Vegas properties rose 9%, helped by boosts in table game volume (+5%) and slots handle (+7%). However, table game hold was down here as well, with the overall effect being a $33m reduction in earnings.
At the MGM Grand Macau, net revenues were up 18% to $702m. The VIP business grew 6% with a hold percentage of 3.2%. On the main casino floor, table games hold rose 16% and slots were up 20%. As for MGM’s proposed Cotai strip project, the company believes government approval is “imminent.” Assuming they get the nod, MGM says the new $2.5b venue will feature approximately 500 gaming tables, 2,500 slots and 1,600 rooms.
In a post-earnings conference call with analysts, CEO James Murren touted the company’s “favorable” prospects in Japan and the “particularly exciting” opportunity of Toronto considering a waterfront casino. Murren is also stoked about the Q2 launch of MGM’s social gaming site “which recreates the Las Vegas Strip experience and exclusively features our brands.” (Which is better than how Murren used to describe this offering: “Farmville on the Strip.”) MGM continues to remain “aggressively focused on pursuing federal legislation for online poker” although Murren claims to be “keenly aware of what’s going on, on a state-by-state basis for those opportunities, which we think will likely emerge.”
Like MGM, Las Vegas Sands has operations in China, where counterfeiting of luxury brands is commonplace. But Sands is currently embroiled in a domestic counterfeiting squabble involving the casino company’s website. Vegas Inc. reports that Sands’ attorneys filed a trademark infringement suit on Tuesday against the unknown operators of a website purporting to be Sands’ official web destination. The site features copies of elements of Sands’ official home page, but unlike the real deal, this Sands knockoff features a pitch for an unrelated investment opportunity. Sands wants a temporary restraining order compelling domain name registrars to disable the site and transfer the domain to the real Sands’ control.
