MGM CEO Bill Hornbuckle Expresses Optimism for Las Vegas and Confidence in Japan Market

Posted on: September 8, 2023, 01:53h. 

Last updated on: September 8, 2023, 01:53h.

MGM Resorts International (NYSE: MGM) CEO Bill Hornbuckle is optimistic about the company’s prospects in Las Vegas, citing upcoming major events at local arenas and stadiums as opportunities for growth.

MGM CEO Bill Hornbuckle
MGM CEO Bill Hornbuckle. He says the company is bullish on Las Vegas and is eyeing goings on in the UAE. (Image: Wall Street Journal)

During the Bank of America Gaming & Lodging Conference, Hornbuckle highlighted MGM’s advantageous position on the South Strip, which allows the operator to benefit from events such as the Las Vegas Grand Prix in November and the upcoming Super Bowl in February.

“Two weeks ago, we had the highest average daily-rate booking week in our history. You’re leaning into the fourth quarter and Formula One,” said Hornbuckle. “People are starting to get excited about the Super Bowl. We were able to capture the NBA tournament that’s going to take place during the first week of December (at T-Mobile). The signs we see are encouraging.”

The highly anticipated F1 race, scheduled for November 18, is expected to bring significant benefits to Strip casino resorts. Hornbuckle noted that room rates for the race weekend at MGM venues are four times higher than usual, and the operator has extended record-breaking amounts of credit to VIP bettors visiting during that period.

This event is projected to attract a large number of high-end visitors to Las Vegas, highlighting MGM’s focus on affluent clients. Hornbuckle emphasized that 70% of the operator’s revenue comes from 30% of its customers, demonstrating the importance of enhancing Bellagio and the 2022 acquisition of the Cosmopolitan to better cater to wealthy individuals.

Hornbuckle Discusses Japan, New York

While MGM dominates the Strip, analysts see the company’s efforts to obtain a casino permit in the New York City area and its planned integrated resort project in Osaka, Japan as potential catalysts for MGM shares in the long term.

Last week, the New York State Gaming Commission (NYSGC) and the Gaming Facility Location Board (GFLB) provided answers to initial questions from gaming companies competing for three downstate permits. Hornbuckle stated that MGM, which operates the Empire City Casino in Yonkers, aims to submit the necessary documentation by the end of this year and hopes to be granted one of the three licenses within a year.

Regarding Osaka, despite facing minor delays and cost overruns, MGM’s 40% stake in the project remains attractive due to its location and the likely long-lasting monopoly status in the area.

“If you think about the marketplace, we will probably be the only casino for a very long time in Japan,” Hornbuckle told Kelley. “You have 100 million people in Japan and 19 million in Osaka alone. It’s closer to Shanghai, Beijing, and cities in northern China than Macau.”

MGM Keeping Watchful Eye on UAE

In addition to Japan, MGM’s international expansion plans include various markets, with the United Arab Emirates (UAE) being widely seen as one of the most attractive upcoming gaming frontiers.

This is further fueled by the recent establishment of the UAE’s first gaming regulatory agency, the General Commercial Gaming Regulatory Authority (GCGRA). Former MGM CEO Jim Murren being named chairman of the board of the GCGRA adds to the intrigue.

While it is likely that the first gaming license in the UAE will be awarded to MGM’s rival Wynn Resorts (NASDAQ: WYNN), Hornbuckle revealed that MGM is reserving 150,000 square feet of space at its non-gaming UAE hotel in case broader casino gaming regulations are implemented in the future.

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