MGM Resorts International, a casino operator based in the US, experienced a 26% increase in revenue during the third quarter, reaching US$3.42bn. This growth can be attributed to recent acquisitions as well as the recovering Las Vegas Strip.
Las Vegas and acquisitions on an international scale
Despite the contribution of the Cosmopolitan of Las Vegas, as well as the acquisitions of Aria and Vdara in September 2021 and May 2022 respectively, the company experienced a significant decline in financial performance. The quarter resulted in an operating loss of $1 billion, in stark contrast to the operating income of $1.9 billion recorded during the same period in 2021. Furthermore, the net loss amounted to $577 million, in comparison to the net income of $1.4 billion achieved in the previous year’s quarter.
The company attributed the operating loss to a $1.2 billion rise in noncash amortization expense caused by the revised useful life of the MGM Grand Paradise gaming subconcession in light of new Macau gaming laws, as well as the $2.3 billion gain on consolidation of CityCenter in the previous year quarter.
During the quarter, MGM successfully finalized its acquisition of LeoVegas, an online casino and sports betting provider based in Stockholm. Additionally, the company submitted a tender for a 10-year gaming concession in Macau. MGM has reported advancements in its operations with BetMGM, as well as development projects in New York and Japan.
Bill Hornbuckle, the CEO and President of MGM Resorts International, expressed his pride in announcing that the latest quarter has been the most successful in the history of the Las Vegas Strip. He emphasized that this achievement was not only in terms of revenue but also in Adjusted Property EBITDAR. He attributed this success to the enduring charm of their entertainment and meetings services.
Positive and Negative Updates from Macau
Earlier this week, Chinese authorities enforced stringent COVID-19 measures in Macau, as reported by Bloomberg. These measures involved the lockdown of MGM Cotai, a casino resort owned by MGM China, and the confinement of over 1,500 individuals within the premises.
On the other hand, there is also a positive update for Macau. The Chinese government has recently granted permission for mainland residents to utilize an online platform for acquiring visas to visit the former Portuguese colony. Similar to former British Hong Kong, Macau is now recognized as a ‘Special Administrative Region.’
