MGM Resorts Plans Online Operations Global Expansion
MGM Resorts plans a global expansion of its online operations. MGM Chief Financial Officer Jonathan Halkyard outlined plans at the Bank of America Securities 2021 Gaming and Lodging Conference last week.
Halkyard revealed MGM Resorts is heading towards an asset-light model focused primarily on gaming operations instead of ownership. It plans a global expansion of BetMGM, the company’s online gaming business.
“When I think about what this company needs to be, definitely the best-known brand, most trusted brand in gaming. Casual, high-end and hopefully in as many distribution points with the highest availability in this country. Then to the extend that it is regulated, online offerings internationally.”
“Realistically the opportunity for integrated resorts is not going to be in a wide number of jurisdictions and the capital cost can be pretty extreme but in our spots – Macau and Japan – we would expect to be a player there. So the best brand, most trusted brands available anywhere and premier in gaming.”
MGM Resorts Looking At Omni-Channel Strategy for BetMGM
BetMGM is a joint venture between MGM Resorts and British firm, Entain Plc. Entain is the owners of the partypoker, Party Casino, and Ladbrokes brands.
Creating an omnichannel strategy for BetMGM links online customers globally. They become members of MGM Resorts’ M Life Rewards programme, receiving points and rewards for using the online casino and sports betting products.
MGM Resorts lodged a provisional £8.1 billion ($13.99 billion) bid for Entain in January 2021. The bid valued Entain shares at £13.83, a 22% premium. Entain rejected the offer stating it seriously undervalued the company. Experts predicted a £10 billion ($18.91 billion) would have got the job done.
UK takeover rules meant MGM has until February 1 to make an official bid for Entain or walk away. It chose the second option, which banned MGM from making another bid for six months.
Bill Hornbuckle, CEO of MGM Resorts, spoke about the BetMGM strategy.
“BetMGM, our US sports betting and online gaming venture with Entain, remains a key priority for the company as we continue to leverage our pre-eminent physical gaming, entertainment, and hospitality platform to expand digitally.”
“We believe that BetMGM has established itself as a top-three leader in its markets and we remain committed to working with Entain to ensure its strong momentum continues as it expects to be operational in 20 states by the end of 2021.”
Company Is Favourite For Japanese Casino Licence
MGM Resorts is a frontrunner in the race for an integrated resort in Osaka, Japan. Most forms of gambling are illegal in Japan, but the country is changing its stance. A bill passed in July 2018 officially allowing three casinos across the country.
Japanese lawmakers placed several restrictions on the casino, including limiting Japanese nationals to three visits per week, or ten visits per months, and an entrance fee of 6,000 Yen ($75) for locals.
Bidding for the casinos has not started but MGM Resorts is favourites for the Osaka location. Melco Resorts & Entertainment, and Las Vegas Sands were interested in Osaka, but are looking at alternative locations in Japan.
Gambling Company Makes Massive Profits
MGM Resorts is in a healthy financial position despite the ongoing COVID-19 pandemic. Revenue for the 2020 financial year tipped the scaled at US$5.16 billion ($7.08 billion) down from US$12.90 billion ($17.71 billion) in 2019. That revenue generated US$1.71 billion ($2.34 billion) gross profit, down from US$5.3 billion ($7.28 billion) in 2019.
However, those figures do not include the cost of the Mandalay Bay lawsuit. Clark County District Judge Linda Bell signed off the lawsuit in September 2020. It levied US$800 million ($1.1 billion) in damages relating to the Mandalay Bay massacre three years earlier.
