Updated May 1, 2023 - 7:04 pm
It’s in the early innings, but MGM Resorts International CEO Bill Hornbuckle talked baseball during the company’s Monday earnings call with investors.
Hornbuckle spelled out MGM’s interest in the Oakland Athletics’ potential move to Southern Nevada, in response to an investor’s question.
“Obviously, given the location and the conversation of a pedestrian bridge from T-Mobile (Arena) to the (proposed stadium site), we think it could bring about 400,000 tourists a year to the valley that wouldn’t have otherwise come,” Hornbuckle said.
“We think that’s a reasonable number created by a bunch of folks looking at it. So we think that part’s accretive. We’re not in favor of any tax dollars put into this and yield to the governor’s position and assume that this will be done responsibly for the state and ultimately for Clark County. All that said, I like you believe it will happen and it will be accretive to overall visitation.”
MGM already is running on all cylinders with record cash flow in Las Vegas for the quarter, strong regional operations profit and a rebound in Macao, the company reported.
And, the Las Vegas-based gaming company — the state’s largest employer — expects to have even more revenue streams in the future in New York, Japan, the United Arab Emirates and, potentially, with the arrival of the Oakland A’s.
Last month, the A’s announced the team had signed a binding purchase agreement with Station Casinos parent company, Red Rock Resorts, to purchase 49 acres at Tropicana Avenue and Dean Martin Drive.
International expansion plans
MGM reported net income of $466.8 million, $1.24 a share, on revenue of $3.9 billion for the quarter that ended March 31. That compared with a net loss of $18 million, 6 cents a share, on revenue of $2.9 billion in the first quarter of 2022.
“MGM Resorts is executing across all of its geographies and channels with record first quarter Las Vegas Strip adjusted property cash flow, consistently strong regional operations profit, MGM China’s swift return to profitability, and BetMGM’s anticipated positive earnings later this year,” Hornbuckle said. “Beyond our continued exceptional results, our future growth and expansion plans are promising.”
Last month, MGM received approval for its development plan to build an integrated resort with casino in Osaka, Japan, by the Japanese government, pledging to spend up to $10 billion.
The company expects to break ground on the project, to be built 0n four man-made islands, later this year with plans to open in late 2029 or 2030. The project will include 2,500 guest rooms, 400,000 square feet of exhibition space, 330,000 square feet of meeting rooms and ballrooms, the 3,500-seat Yumeshima Theater, and a variety of food and beverage outlets.
The resort is expected to employ around 15,000 workers and attract 20 million annual visitors.
Hornbuckle also shared that its under-construction Dubai resort could someday host a casino. Right now, Wynn Resorts Ltd.’s $3.9 billion Wynn Al Marjan Island is the only resort that would allow legalized gambling in the United Arab Emirates.
MGM’s Abu Dhabi resort includes a Bellagio-branded hotel, an MGM Grand and MGM Signature villas.
“We’re still doing pylons,” Hornbuckle said in response to a question about the status of the resort. “That property continues to evolve. The (partners) yet again want to upgrade the property with gaming in mind. It’s up to Abu Dhabi and the national government to ultimately decide. We’ve had people on the ground basically nonstop since the first of the year trying to understand the opportunity in Abu Dhabi, and ultimately, if passed and when passed, it will open up to the other emirates. Whether the rulers of each emirate then take it upon themselves to approve it is up to them.”
Hornbuckle said there’s space of about 150,000 to 200,000 square feet where a casino could be built at MGM’s site.
“We think it would be ideal,” he said, adding that any further news would likely come later.
Eyes on New York
MGM also is in the running for casino licensing in downstate New York. The company expects to expand its Empire City Casino at Yonkers Raceway, currently a racino with slot machines and automated tables.
While the competition for three downstate New York licenses will be fierce, MGM is considered a front-runner because it already operates the Yonkers racino.
In addition to the strong gaming performance in several jurisdictions, the company’s balance sheet improved with the February closing of the sale of Gold Strike Tunica in Mississippi.
It received $450 million in the sale of the property to Catoosa, Oklahoma-based Cherokee Nation Entertainment, a subsidiary of Cherokee Nation Businesses, which operates 10 casinos in Oklahoma.
The proceeds of the sale are being used to retire $1.25 billion in unsecured notes.
“We’re in an enviable position financially,” MGM Chief Financial Officer Jonathan Halkyard said during the conference call.
“Our collection of superior properties in Las Vegas together with the stable operating performance of our regional portfolio generates ample free cash flow from our domestic operations. BetMGM is fully capitalized now, growing rapidly and turning toward profitability later this year. Our Macao enterprise is already operating at near pre-pandemic levels.
“Our balance sheet is strong and highly liquid,” he said. “At the end of the quarter, excluding China, we had approximately $4.5 billion of cash and more cash than debt creating a net cash position of $1.3 billion. All of this allows us to invest for growth, delever and repurchase shares, steadily reducing our share count.”
Shares of MGM, traded on the New York Stock Exchange, were up $1.12, 2.5 percent, to $46.04 a share in above average volume Monday.
MGM Resorts International
First-quarter revenue and earnings for Las Vegas-based MGM Resorts International, operators of the MGM Grand, Bellagio, The Cosmopolitan of Las Vegas, Aria and Mandalay Bay among other Strip properties. (NYSE: MGM)
1Q 2023: $3.873 billion
1Q 2022: $2.854 billion
1Q 2023: $466.8 million
1Q 2022: ($18 million)
Earnings/(loss) per share
1Q 2023: $1.24
1Q 2022: ($0.06)