MGM Resorts ended 2022 strong thanks to a fifth-straight quarter of record performance from its Las Vegas properties, which now include The Cosmopolitan among its ranks. Regional operations also performed strongly and, while BetMGM and MGM China reported losses, the company is optimistic about their growth in 2023.
That digital growth plan does not include a purchase of its BetMGM partner, Entain. The company reiterated its commitment to growing LeoVegas and firmly shot down rumors of a purchase.
Here is a look at the top-level numbers from MGM’s Q4 earnings report:
Net revenues: $3.6 billion, up 18% YoY
Net income: $284 million
Adjusted EBITDAR: $957 million
“We achieved our fifth consecutive quarter of record-breaking Las Vegas Strip Resorts Adjusted Property EBITDAR in the fourth quarter,” said MGM Resorts CEO and President Bill Hornbuckle in a release. “What we accomplished in 2022 is nothing short of remarkable, and is a testament to our strategic plan, scale, brand strength, talented team, loyalty program, and the diverse geographies and channels in which we operate. We believe that there is strong momentum in our business and our 2023 outlook remains bright, driven by a robust events calendar domestically, MGM China’s rapid year-to-date return to profitability, and BetMGM’s ongoing improvement in 2023.”
Las Vegas revenues jumped from $8.4 billion to $4.7 billion YoY, which was largely boosted by the addition of The Cosmopolitan to the MGM Resorts portfolio. Hornbuckle said on the earnings call that he expects to sustain that performance in 2023 thanks to a strong conference calendar and events at Allegiant Stadium on the south end of the Las Vegas Strip.
Regional casino numbers were up slightly across the board year-over-year. The numbers for the MGM Empire City Casino in Yonkers could improve vastly if MGM’s proposal for a downstate casino license is approved.
MGM China, on the other hand, continued to struggle with the COVID restrictions impacting Macau operations. Hornbuckle said the company was nonetheless optimistic about the venture going forward, particularly with the addition of 200 tables to the property.
Digital was a major point of discussion as well. BetMGM, the joint venture between Entain and MGM Resorts, presented its results last month.
Hornbuckle was asked about the continued rumors that MGM would buy Entain out of this venture, which he elected to answer rather conclusively.
“I think it’s time to be definitive and give a little direction. The simple answer on Entain is no, we’ve moved on. While we remain highly focused on BetMGM business through our partnership with Entain, and making sure that our business continues to grow. We see great potential LeoVegas’ expansion capabilities. I said before we liked their technology platform and their leadership team,” Hornbukcle said. “We’re also interested in the content studio business we think there’s a real play there. We’ve seen that proven effective with brands when combined with great product and our brands at BetMGM. Over time, we like the live dealer business and expansion of other global markets. And frankly, directly in our own purview. So for now, the answer is no, not with Entain. We’re gonna go down in our own direction, and we began to allocate capital.”
Hornbuckle also reiterated his confidence in newly appointed president of MGM Interactive Gary Fritz.
CFO Jonathan Halkyard elaborated that the capital Hornbuckle mentioned would largely go to fund bolt-on M&A ventures to help grow the general business as well as expansion into other markets like South America or, further down the line, in Europe.
When discussing growth in the United States, Hornbuckle called Michigan “the best laboratory” to test out what works and deploy in other states. He also disagreed that a downturn in brick and mortar numbers was the result of extended COVID protocols and bringing back smoking sections in parts of the casino has helped stabilize retail numbers. He said the company is still highly focused on synergies across the retail and digital casinos and both are doing well.
