MGM Resorts International fireside chat
Something got a hold of my heart: MGM Resorts International’s CEO Bill Hornbuckle and CFO Jonathan Halkyard took their places in the fireside chat hot seat to speak with Bernstein’s Vitaly Usmansky to talk all things digital, Vegas and Macau (with some Japanese comment thrown in). They started as per their recent Q1s by extolling the virtues of the BetMGM business and touching on how iGaming, which provides the “real value” to MGM, can gain greater legislative acceptance. Hornbuckle said iGaming was “one more step on” from sports-betting for any legislator: “Once you are in the sports-betting business and you get confidence in the social issues, you can gain even more confidence. It will take time and education. That more than anything else. No one is going to go straight to iGaming; it’s not for the weak of heart or the short of wallet.”
The two of us: Asked whether the joint-venture nature of the BetMGM partnership with Entain worked against the unitary control of some of their competitors, Hornbuckle stuck to the script on the positives. “They (Entain) have proven they know how to make money in this space,” he said. “They came with great management, great content, a very good tech stack. And we continue to improve on that. We have converted a European user experience into a really good user experience for US sports.”
“The downside is we don’t own the whole thing and we’re not crazy about that. But we don’t pay the 10/12% for tech (that others do). Margins are better and it makes the business more sustainable. Plus, MGM owns the whole ecosystem side.”
Back to the land: The MGM team had a similar message to LVS yesterday: while Vegas is “on fire” according to Hornbuckle and likely to see “out of scale margins” for the next six months (see below analysis on US gaming), Macau is still finding its feet post-Covid. While there will be some “ebbing and flowing” for the rest of this year, the longer-term is rosier with penetration into the Chinese customer base “de minimis” as it stands. “The bigger the market gets, the more it becomes a destination,” he said. “It just becomes more appealing.” In Japan, meanwhile, Hornbuckle noted that the long drawn out IR bidding process – likely to be narrowed down to two cities including Osaka – should be concluded by this time next year.
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