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MGM Resorts International (MGM) CEO William Hornbuckle Presents at J.P. Morgan Gaming, Lodging, Restaurant & Leisure Management Access Forum Transcript
MGMMGM Resorts International(MGM)2024-03-15 00:52

Summary of MGM Resorts International Conference Call Company Overview - Company: MGM Resorts International (NYSE:MGM) - Participants: William Hornbuckle (CEO), Jonathan Halkyard (CFO), Joseph Greff (JPMorgan) Key Industry Insights - Core Operations: Focus on Las Vegas as the primary market, with a robust regional business that has shown resilience during economic fluctuations [3][4] - Digital Expansion: Significant growth in digital operations, particularly through BetMGM, projected to reach approximately 2.5billioninrevenuethisyear[5]−∗∗InternationalDevelopment∗∗:ActivepursuitsinJapan,NewYork,UAE,andThailandforfutureexpansion[6][8]StrategicPriorities−∗∗MandalayConventionBusiness∗∗:Anticipationof100,000roomnightsreturn,expectedtoenhanceproductivity[3]−∗∗EventActivity∗∗:Sportsevents,includingtheSuperBowl,arekeydriversformarketgrowth[3]−∗∗DigitalGrowth∗∗:ExpansionofBetMGMandinternationaloperations,includingsuccessfullaunchesintheUKandothercountries[5][19]DevelopmentOpportunities−∗∗Japan∗∗:Licensewon,withconstructionexpectedtobeginmid−2025,aimingfora2030opening[6][9]−∗∗NewYork∗∗:Awaitingregulatoryapprovals,withhopestostartconstructionbyearlytomid−2026[10]−∗∗UAE∗∗:Exploringopportunitiesinnon−gaminghotelprojectswithpotentialforfuturecasinodevelopments[6][11]−∗∗Thailand∗∗:Early−stageexplorationformarketentry,focusingonregulatoryframeworks[16][18]FinancialPerformanceandProjections−∗∗RoomNightStrategy∗∗:PartnershipwithMarriottexpectedtodrive600,000to700,000additionalroomnightsannually,enhancingprofitability[34][35]−∗∗EBITDAContribution∗∗:PotentialforLeoVegastocontribute2.5 billion in revenue this year [5] - **International Development**: Active pursuits in Japan, New York, UAE, and Thailand for future expansion [6][8] Strategic Priorities - **Mandalay Convention Business**: Anticipation of 100,000 room nights return, expected to enhance productivity [3] - **Event Activity**: Sports events, including the Super Bowl, are key drivers for market growth [3] - **Digital Growth**: Expansion of BetMGM and international operations, including successful launches in the UK and other countries [5][19] Development Opportunities - **Japan**: License won, with construction expected to begin mid-2025, aiming for a 2030 opening [6][9] - **New York**: Awaiting regulatory approvals, with hopes to start construction by early to mid-2026 [10] - **UAE**: Exploring opportunities in non-gaming hotel projects with potential for future casino developments [6][11] - **Thailand**: Early-stage exploration for market entry, focusing on regulatory frameworks [16][18] Financial Performance and Projections - **Room Night Strategy**: Partnership with Marriott expected to drive 600,000 to 700,000 additional room nights annually, enhancing profitability [34][35] - **EBITDA Contribution**: Potential for LeoVegas to contribute 0.5 billion in cash flow if market share targets are met [24] - BetMGM Growth: Anticipated revenue growth of approximately 25% this year, with ongoing product enhancements to regain market share [25][26] Operational Insights - Las Vegas Market: Improved seasonality management through strategic programming and events, including Raiders games [31] - Macau Recovery: Outperforming peers with a focus on high-end offerings and strategic casino reconfigurations [39][40] Capital Allocation Strategy - Debt Management: Currently zero net debt, with a focus on disciplined capital allocation for future growth opportunities [49][50] - Free Cash Flow Utilization: Plans to use free cash flow for investments in BetMGM, Japan, and New York while considering share repurchases [50] Additional Considerations - Regulatory Environment: Ongoing efforts to engage with local governments in UAE and Thailand for potential gaming licenses [11][12] - Technological Advancements: Implementation of chip-in-chip technology in Macau to enhance tracking and customer experience [44][47] This summary encapsulates the key points discussed during the conference call, highlighting MGM Resorts International's strategic focus, growth opportunities, and financial outlook.