MGM Resorts International Focuses on Las Vegas and BetMGM Growth
MGM Resorts International, the global hospitality and entertainment powerhouse, is sharpening its focus on the flourishing Las Vegas market and the burgeoning potential of its digital venture, BetMGM. The company's strategy, as highlighted in its third-quarter earnings call, capitalizes on significant sporting events and the burgeoning sports scene in Las Vegas, despite the challenges posed by recent cybersecurity incidents.
### A Strategic Pivot to Las Vegas and BetMGM
MGM Resorts is not just banking on the inherent appeal of Las Vegas but is actively leveraging major events to enhance its offerings. The arrival of Formula 1, which has generated unprecedented interest in the city, alongside the increasing popularity of the Las Vegas Raiders and the prospective move of the Oakland Athletics to Las Vegas, underscores the city's growing stature as a sports hub. This sports-centered approach is a clear indication of MGM's intent to not only elevate Las Vegas’s status as a premier entertainment destination but also to harness these events' significant economic impact.
However, the journey hasn’t been devoid of roadblocks. A substantial cybersecurity incident inflicted approximately $100 million in losses on MGM Resorts, primarily due to revenue loss from room cancellations and extensive efforts towards service recovery. Despite this setback, Jonathan Halkyard, MGM Resorts’ CFO, conveyed a sense of resolve and optimism in addressing and overcoming these cybersecurity challenges.
### BetMGM: A Staple in MGM's Strategy
An equally pivotal component of MGM Resorts' strategy is BetMGM, its online betting platform. Although acknowledging the need for enhancements, the platform's achievement of EBITDA positivity for the quarter was highlighted as a testament to its potential and a step in the right direction. MGM Resorts aims to sharpen BetMGM’s competitive edge, planning its expansion into additional states by the first quarter of 2024. This expansion is not just a growth strategy but a clear signal of MGM’s ambition to cement its standing in the digital gaming sphere.
### Quotes from the Earnings Call
Reflecting on the cybersecurity incident's impact, it was shared that, “Most of this impact was from a loss in revenue from room cancellations in Las Vegas and our service recovery efforts.” This incident, while detrimental, seems to have galvanized the company's resolve to strengthen its cybersecurity measures and ensure the resilience of its operations.
On a more optimistic note regarding BetMGM's standing in the digital gaming market, a representative stated, “We believe — look, we’re still number three. We’re still number one, although I noted Draft Kings this month, but year in and year out, we’ve been number one in iGaming.” This confidence underscores MGM Resorts' commitment to maintaining and enhancing its leadership position in both the physical and digital gaming arenas.
### Conclusion
Despite the adversities presented by the cybersecurity incident, MGM Resorts International has maintained a clear strategic focus. By leveraging Las Vegas's burgeoning sports scene and major sporting events, alongside the digital growth trajectory of BetMGM, MGM Resorts is not merely looking to recover from its recent setbacks. Instead, it's aiming to solidify its leadership in the hospitality and gaming industry, driving growth and setting new industry benchmarks. With strategic maneuvers in both the physical and digital domains, MGM Resorts is poised for a future of sustained growth and industry dominance, reflecting a resilient approach to overcoming challenges and capitalizing on emerging opportunities.