Share
MGM Resorts International reported record earnings for the first quarter of the year. Strength in Las Vegas and Macau helped boost earnings to $4.4 billion during the first three months of the year. This was a 13% increase from revenue during the same period last year.
In the Q1 2024 earnings press release, MGM Resorts‘ Chief Financial Officer & Treasurer Jonathan Halkyard summed up earnings for the quarter by saying:
“We achieved record results in the first quarter of 2024 driven by strong performance at MGM China and in Las Vegas specifically at our luxury resort properties. We repurchased 12 million shares at attractive valuations, providing our shareholders with incremental future benefits from the free cash flow growth of our resort operations, digital profitability, and the development opportunities of Japan and New York.”
Unlike Caesars Entertainment’s Q1 2024 earnings call earlier this week, MGM Resorts was relatively guarded when discussing its online casino arm, BetMGM.
During his opening statement, MGM Resorts’ Chief Executive Officer and President Bill Hornbuckle took a forward-looking tone when discussing BetMGM saying, “There are some challenges, obviously, in North America. We are focused with BetMGM on our product.”
The company sees BetMGM online casino and sportsbook as a revenue generator in the future. The company’s operations in Las Vegas and Macau are driving earnings today.
Key takeaways:
- Record first-quarter revenue.
- Marriott partnership shows surprising results.
- BetMGM continues to evolve.
MGM Resorts first quarter 2024 earnings
MGM Resorts (NYSE: MGM) is touting Macau as one of the main drivers for its first-quarter revenue increase to $4.4 billion. This was an increase of 13% compared to the first quarter of last year.
Net revenue for MGM China for the quarter was $1.1 billion. That’s a 71% increase from last year when the company reported first-quarter revenue of $618 million.
The company says the MGM China results are “from the continued ramp-up of operations after the removal of COVID-19 related entry restrictions in Macau in the prior year quarter.”
Las Vegas operations added net revenues of $2.3 billion in the first quarter. This was a small 4% increase from $2.2 billion last year. Las Vegas hosting its first Super Bowl helped boost the average daily hotel room rate for the quarter from $258 last year to $277 during the first quarter.
BetMGM’s impact on earnings
BetMGM didn’t contribute gains to the bottom line of MGM Resorts during the first quarter. However, the company only lost $32.6 million compared to $81.8 million during the same period last year.
The company is expecting growth from BetMGM soon. Halkyard said, “(w)e expect to see benefit soon from our digital business with BetMGM beginning to generate significant free cash flow in the next couple of years.”
He continued saying, “This free cash flow generation will fund future growth and opportunities where I expect minimum mid-teens returns.
Looking ahead for BetMGM
BetMGM has a single wallet in use for all jurisdictions except for Nevada. The company expects a single wallet in Nevada to launch in time for football season.
Hornbuckle said that only about 15% of BetMGM’s users are omnichannel. He expects that bringing the single wallet to Nevada will create a deeper connection with visitors and its Las Vegas casinos.
The company expects to launch live dealer online blackjack games from Las Vegas by the summer. Specific details about these games should be announced shortly.
BetMGM is working with numerous partners to create unique online casino games. Looking to the future, Hornbuckle says, “At some point, we want to be self-sustaining with all site features, including producing our own games and our own product.”
It seems as though the BetMGM branding possibilities are already limitless. Creating more content should continue growth for the division.
MGM’s partnership with Marriott is exceeding expectations
MGM Resorts’ long-awaited partnership with Marriott is already showing stronger-than-expected results for the company. During the first quarter, Marriott delivered 130,000 room nights to MGM Resorts properties in Las Vegas and around the country. This isn’t just a land-based casino partnership. In March, the company announced that BetMGM Rewards can be linked with Marriott accounts.
The company wasn’t expecting so many rooms so quickly and the outlook is even better for the company. MGM expects even more rooms will be sold through this partnership in the future.
MGM said 50,000 of those room nights took place during the quarter. Halkyard says these guests are generating greater revenue for the company.
During the call, he said the revenue from Marriott guests is “around $150 higher than the rooms that we believe are being displaced by this occupancy. About $100 or so of that is on rate and about $50 premium on on-property spend.”
