MGM Resorts International (MGM) generated almost $4 billion in revenue in Q3, up by 16% year-over-year. MGM China was the principal driver of that growth, having seen an 829% revenue increase year-over-year due to the country lifting its COVID-19 restrictions. Conversely, US properties saw a decline in revenue. One reason was the September cyberattack, which MGM has estimated cost around $100 million in lost revenue.
Other notable Q3 figures include a net income of $161 million and consolidated adjusted EBITDAR of $1.1 billion.
During its Q3 earnings call, MGM’s President and CEO Bill Hornbuckle described the results as “fantastic.”
Despite the cyber attack, he said that same-store revenue was up across the US. Hornbuckle also praised company employees for how they responded following the cyber attack and added that the company expects insurance to cover its losses. That said, the financial risk to the company isn’t entirely over, as MGM still faces multiple class-action lawsuits pertaining to the attack.
MGM China Delivers While US Properties See Revenue Decline
MGM China’s results were the highlight of the quarter. Due to China lifting COVID-19 restrictions, the subsidiary recorded $812.5 million in revenue, compared to just $87.5 million last year. Going back further, the Q3 results were also up 10% compared to the same period in 2019, immediately before the pandemic. So, the company’s Chinese operations have fully rebounded and then some.
Additionally, adjusted property EBITDAR was $226 million, up 23% from Q3 2019.
Meanwhile, MGM properties in Las Vegas generated revenue of $2.1 billion, down 8% from last year. The remaining US properties also declined: $925 million this year, compared to $974 million last year. During the earnings call, Hornbuckle said that US properties had been off to a great start before the operational disruptions. These lasted for over a week before things began to get back to normal.
While the cyber attack was one of the reasons for lower revenue, the company said its sale of The Mirage in Vegas and Gold Strike Tunica in Mississippi also contributed.
MGM Expects Formula 1, Super Bowl To Bring Record Revenues
Hornbuckle said the company’s focus now is on the inaugural Las Vegas Formula 1 event. Scheduled on the weekend before Thanksgiving—the second slowest of the year—the event is generating a lot of interest, and MGM says it expects a record event for the casino.
The MGM CEO added he expects about $60 million in hotel revenue for the weekend. Additionally, he said the company had sold over 10,000 Grandstand tickets for the event and has sold out of the Bellagio Fountain Club Experience tickets, which cost over $11,000 apiece.
While MGM expects Formula 1 to lift Q4 revenue, the company has even higher expectations from the upcoming 2024 Super Bowl. This will be held in Las Vegas. Corey Sanders, MGM’s Chief Operating Officer, said that while Formula 1 will be a record event, there are twice as many hotel bookings for the Super Bowl.
BetMGM Posted Operating Profit and Will Get Upgrades
While many Q3 highlights surrounded retail operations, records show that the BetMGM online joint venture saw its first-ever profitable quarter in terms of operating income. MGM co-owns BetMGM with British-based Entain. MGM’s profits on its half of the revenue amounted to $12.6 million. While this is small compared to retail profitability, crossing over into the black is an important milestone, and one MGM and Entain investors have been waiting to see.
While a detailed report will come out next month, Hornbuckle said BetMGM is “well on pace” to achieve its forecast of $1.8 billion to $2 billion in net revenue.
Hornbuckle again emphasized improving BetMGM Sportsbook to catch up to DraftKings and FanDuel. He also said MGM needs to protect iGaming. While he noted DrafKings’ claim to the No.1 spot, he believes the company still holds the top position. Hornbuckle said MGM has taken steps towards improving the sportsbook, including completing single-wallet migration in all states except Nevada.
The CEO also added that MGM is working on integrating Angstrom Sports’ products into BegMGM. Earlier this year, Entain purchased Angstrom, an AI sports modeling, forecasting, and data analytics company. The goal is to make BetMGM and other Entain companies more competitive and provide a better user experience.
As part of the plan to stay competitive, MGM entered the content business in Q3. Through its subsidiary LeoVegas, the company purchased UK-based developer Push Gaming. Push’s titles will first appear in the UK, but MGM plans to bring the content to BetMGM Casino in the US eventually.
Additional highlights surrounding BetMGM in Q3 included launching in the UK. MGM said it will look to increase its presence there and in other European countries. Hornbuckle added that the company is also looking into Brazil.