MGM Resorts CEO Bill Hornbuckle has doubled down on the company’s increasing focus on an omnichannel strategy after revealing that BetMGM was a ‘clear leader in igaming’ and a strong position held in US sports betting during Q3.
Reporting its Q3 financial results, MGM recorded corporate revenues of $3.4bn, an increase of 6% year-over-year thanks to its acquisition of The Cosmopolitan in Las Vegas.
The company reported total operating losses of $1bn during Q3, which has come down significantly from $1.9bn one year ago, thanks to a $1.2bn increase in noncash amortization expenses. This is despite a net loss of MGM Resort of $577m, compared to a net income of $1.4bn one year ago.
Addressing investors, Hornbuckle was eager to laud the performance of BetMGM – its joint venture with British ‘big four’ operator Entain – labeling his outlook as ‘bullish’ on the betting and gaming division.
BetMGM performing on track as MGM Resorts target omnichannel growth
BetMGM launched in Kansas during Q3 and is looking ahead to launches in Massachusetts, Ohio and Maryland in the coming months.
The betting and gaming division noted $400m in Q3 revenues, a 90% increase YoY, driven by igaming sales growth and entering new markets.
Hornbuckle assessed BetMGM’s Q3 performance: “We remain bullish on BetMGM, which continues to build on success every quarter. In the third quarter BetMGM launched in Kansas, representing its 24th market to date, and the eighth new market we have added since November of last year.”
He also delved into market performance, revealing the division’s total market share across regulated US markets as well as touching on its path to profitability.
“MGM remains the clear leader in igaming with a 29% market share. And BetMGM commands 22% share in active markets from combining US sports betting and igaming,” he added.
“As we hit the halfway point of the NFL season we’re encouraged by the preliminary metrics, reinvestment has remained within our expectations and markets appear to be acting more rationally.
“As BetMGM shared in May and its investor day, our strategy is to focus on profitability by allocating spending geographies with the highest ROI and targeting bonusing. We believe this is being executed exceptionally well.”
Though still a loss-making entity, MGM’s burden of losses from the BetMGM venture has shrunk to around $24m – down from $49m one year ago – making a total year-to-date loss of $186m. MGM remains ‘comfortable’ with this as it is constant with its guidance of $225m per year target.
MGM Resorts’ CFO Jonathan Halkyard added: “Through the first nine months of the year BetMGMs revenue associated with operations have surpassed a billion dollars, which puts them well on track to achieve their target of over $1.3bn this year.
“Looking forward, improved design and functionality of the BetMGM app launch of a single wallet and omnichannel growth over the tailwinds behind future growth of their business and its impact to MGM as we look to reach profitability during 2023.”
LeoVegas acquisition confirmed
MGM Resorts’ other key operational development during Q3 was the closure of its acquisition of LeoVegas, adding another 900 staff to its payroll. Purchased for around $604m, LeoVegas is an ‘important’ step in its ‘aggressive expansion in online gaming’.
Around $9m worth of corporate expenses during Q3 was associated with the LeoVegas acquisition. MGM Resorts’ total costs across the board swelled to £117m from £112m, largely as a result of the aforementioned expanded payroll.
It was revealed that cultivating a strong omnichannel strategy is a key pillar behind the acquisition, creating a ‘competitive advantage that over time allows us to generate incremental earnings between a brick-and-mortar and our online channels’.
Hornbuckle explained: “I’m pleased to share that we’ve completed our acquisition of LeoVegas in September. This important acquisition represents the first step of an aggressive expansion in international and online gaming for MGM.
“I’d like to again welcome Gustaf Hagman, and the team. We also recently announced the addition of Gary Fritz as our President of Interactive. Gary will lead our broader digital strategy both here in the US and internationally – of which LeoVegas is a significant part.”
Lastly, Q3 trading also saw a share buyback program returning $307m to shareholders after repurchasing 10 million shares.
The trading period displayed strengthening operations across key verticals and, as such, MGM Resorts’ board declared a $0.0025 per share quarterly dividend, payable on Dec 15.