Casino operator MGM Resorts claims it performed respectably in a “challenging” third quarter, although things would have been much less respectable without contributions from two new venues.
Figures released Tuesday show MGM’s overall revenue hitting $3b in the three months ending September 30, up 7% from the same period last year. But operating income was down 16.6% to $410.9m and net income slipped 2.6% to $142.9m.
MGM’s domestic resorts reported revenue down 1.5% to $2.23b, despite an extra $42.5m contributed by MGM Springfield, which opened in Massachusetts in late August. Overall domestic resorts earnings were down 12% to $627m, in part due to opening expenses surrounding MGM Springfield.
MGM’s Las Vegas Strip resorts were particularly hard hit, reporting hotel occupancy down two points year-on-year, as well as declines in table drop (-10.5%), table win (-1.4 points), slots handle (-2%), and revenue per available room (-3.9%).
The company noted that the Vegas market as a whole got an artificial boost in Q3 2017 from the blockbuster MacGregor v. Mayweather boxing match and the most recent quarter welcomed 120k fewer conference attendees.
That said, the MGM Grand Las Vegas broke the trend, reporting its best quarter ever. The Grand’s revenue topped $340m (+9.3%), beating even the mighty Bellagio, which saw its revenue fall 15% to $322m.
The MGM China joint venture in Macau reported revenue jumping 37% to $606m, thanks primarily to the February opening of the new MGM Cotai resort, which added nearly $172m to the revenue total. MGM Cotai also helped push MGM China’s earnings up 7.3%, despite the company’s original Macau property, MGM Macau, reporting earnings falling nearly 6%.
MGM China’s overall VIP table turnover was up 14.2% to $9.4b, while VIP was up 11% year-on-year, thanks to high-rollers playing unlucky at MGM Macau. Main floor table drop was up 46% while mass win rose 43%, with most of this gain attributed to MGM Cotai.
BRAVE NEW WORLDS
The quarter was an active one for MGM, including the addition of gaming operations at Ohio’s Hard Rock Rocksino Northfield Park and a flurry of non-traditional deals, including the new online gambling/sports betting joint venture with GVC Holdings, plus official gaming partnerships with the National Basketball Association and, as of yesterday, the National Hockey League, that will allow MGM access to proprietary data for in-play wagering.
Speaking on Tuesday’s analyst call, MGM CEO Jim Murren said MGM’s foray into sports betting outside Nevada was providing the company with “great confidence.” Murren claimed that the Borgata casino in Atlantic City was already doing betting volume that matched any of MGM’s properties on the Vegas Strip.
MGM’s results were released on the same day that Nevada casino sportsbooks set a new monthly revenue record, and Murren claimed that the expansion of legal wagering outside Nevada – along with the constant chatter of betting in the media – was having a net positive effect on the Vegas wagering market.
Murren said MGM continued to have a “vast number of discussions’ regarding sports betting tie-ups with other teams and leagues – and not just in North America – but that the company would only pull the trigger on deals with entities whose philosophies matched MGM’s. Murren noted that it was early days in the US legal sports betting market and MGM “can’t afford to have anything go awry.”