Hornbuckle says BetMGM was profitable for Q3

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The bulk of the Q3 earnings call for MGM Resorts focused on developments in Vegas, and rightfully so. F1 is the talk of the town and, though some groups are seeing room rates go down, MGM Resorts CEO Bill Hornbuckle remains optimistic of the race’s impact on bottom lines. He went so far as to say it would be a record casino event for MGM Resorts.

With the Super Bowl coming to Vegas next year, the potential move of the Oakland As to Las Vegas, and the continued boon of travel around Las Vegas Raiders games, Hornbuckle was very bullish on the next year in Nevada.

He was also confident the cybersecurity incident is behind the company. The group recorded $100 million in losses, which will trickle over slightly into the last three months of the year.

“Most of this impact was from a loss in revenue from room cancelations in Las Vegas and our service recovery efforts. We expect the Q4 impact to be limited with some hotel bookings lost in the first part of October and a brief disruption to the direct mail cadence in our calendar, which affects the regionals more meaningfully than Las Vegas. We remain confident that the losses will be covered by our cyber insurance,” explained MGM Resorts CFO Jonathan Halkyard.

The day after the call, MGM also announced a deal between the group and the culinary union, removing the potential of a strike.

On the online front, Hornbuckle was honest that they knew the BetMGM product needed improvement but believed they are closer to where it needs to be.

“We believe in that business. We recognize, particularly as it relates to sports, that our product over the last 18 months wasn’t where it needed to be. And you’ve seen us do a great deal of work around single account, single wallet. Entain bought Angstrom, which we think and becoming a very good push for us with parley product for odds, the quantum of odds that we set, the amount that we can put out there. And so, we’re excited by that acquisition and what that’s brought to the business,” said Hornbuckle.

BetMGM will do a separate earnings call in the future but Hornbuckle did say the entity was EBITDA positive for the quarter.

When asked if there will be more capital injected into the project, Hornbuckle didn’t rule it out but also noted they need to evaluate results before any substantial investment.

“We’ll continue to invest accordingly and appropriately and purpose with [Entain] because we believe — look, we’re still number three. We’re still number one, although I noted Draft Kings this month, but year in and year out, we’ve been number one in iGaming. And so, we’ve got a very big position we want to protect and we’ll continue to do so.”

He also said the BetMGM app available in other states should launch in Q1 2024. With that launch, the group can get a much better feel for how well their omnichannel strategy is working.