Las Vegas Grand Prix Drives Record MGM Profits
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Amid the glitz and glamour that defines Las Vegas, the city’s recent Formula One Grand Prix, held on November 18, redefined success for the hospitality and gaming giant MGM Resorts International. For the first time in forty years, the high-octane thrill of F1 racing returned to the vibrant streets of Sin City, leaving an indelible mark on the Strip’s revenue records.
Jonathan Halkyard, MGM’s Chief Financial Officer, delivered this newsworthy reveal at the Bank of America Leveraged Finance Conference. The race weekend did not just race past expectations—it soared to the pinnacle, outperforming even the notable Consumer Electronics Show of 2019, making it the most lucrative weekend for MGM’s Strip venues to date.
Halkyard expressed euphoria over the event’s success, stressing that it was a monumental success given its timing during what is traditionally a slower period in the year. He shared that all aspects of MGM’s operations, including casino volumes and food & beverage services, saw exceptional growth. More importantly, the event was hailed as a great experience by both guests and staff.
Despite the friction with local residents during the event’s lead-up, the CFO announced that the Las Vegas Grand Prix’s financial impact made November 2023 likely to stand as the best November for Las Vegas hotel revenue in MGM’s books.
Further accentuating the company’s strategic direction, Halkyard discussed how MGM’s evolution towards a fully operational company structure was now essentially complete. This milestone denotes a significant shift in focus towards growth initiatives. With eyes set on expansion, Halkyard shared insights on potential enlargements at the Empire City Casino in New York, as well as MGM’s aspirations towards an integrated resort in Osaka, Japan.
He elucidated on the recent financial maneuvers of MGM, highlighting the repurchasing program as a preferred method of returning value to shareholders. Having already repurchased a significant fraction of shares, MGM projected further buybacks reaching up to $2 billion.
Halkyard clarified MGM’s intent to allocate capital predominantly to growth, while not dismissing the possibility of additional share repurchases. When queried about debt, he suggested that while high-yield debt issuance could be on the cards, growth investments would take precedence.
In addressing the BetMGM enterprise, Halkyard gave a measured endorsement of MGM’s joint venture with Entain, emphasizing the intention to bolster BetMGM’s success. The acknowledgment unfolds against the backdrop of Entain grappling with investor pressures and market anxieties that might prompt takeover scenarios or strategic decisions about its stake in BetMGM.
As we emerge from the fanfare of Grand Prix and its historic success for MGM Resorts International, we shift gears to consider the broader landscape of gaming and entertainment, an area that MGM has long mastered. Within this realm, online casinos offer a dynamic and accessible alternative to the conventional casino floor, a revolution in gaming that has seen significant uplift in recent years.
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