Bill Hornbuckle was a gaming pioneer in Las Vegas, the home of MGM Resorts. But it wasn’t just him. Bill Hornbuckle is looking to expand into a variety of international markets, as well as new channels.
MGM Resorts is booming, but the company’s home base in Las Vegas has much more to it than just a Vegas business. Hornbuckle is responsible for global development and, having brought MGM to Macau, he continues to look east.
MGM Resorts turns east
The Ministry of Land, Infrastructure, Transport and Tourism in Japan certified in April plans for an integrated resort worth $10bn in Osaka. Construction can start on the site after agreements are finalised with Osaka Prefecture, City and Prefecture.
Opportunities are becoming more accessible in the United Arab Emirates. First, Wynn signed an agreement to build a resort at Ras al-Khaimah. A federal regulator called the General Commercial Gambling Regulatory Authority, or GGRA for short, was created to pave the way towards resorts being built in other Emirates.
Hornbuckle believes MGM has its sights set on Dubai. We believe that over the years, three to four licenses will be issued in the Emirates. “We’re going be patient with this. There is a non gaming project in Dubai which already has Bellagio’s, MGM Grand’s and ARIA’s brands.
It’s an amazing project located at Porto Island, right next to Jumeirah Beach. The resort will be magnificent and, hopefully, integrated.
For an operator the size of MGM Resorts, these opportunities are rare. Japan is the result of 12 years’ work. Conditions for building such a property are not always available.
He continues, “We excel at large-scale integrated resorts, which in Japan are projects worth $10 billion.” If we replicated the Bellagio, it would probably be a $9bn-project. We do that. We’re very good at it. “That’s what we are good at.
MGM has jurisdictions that tax rates range between 7% and 30%. Anything beyond that becomes prohibitive.
European resorts are off-limits
There’s no MGM Resorts in Europe anytime soon.
Hornbuckle says that the challenge Europe faces is that there are many small operators with stakes in an industry which exists. The tax climate is not conducive to the type of projects we’d like to undertake. We would be interested in a project that was unique, but I cannot think of any. It would need to be very special.
The operator was intrigued by the UK’s largely unsuccessful early 2000’s plans to build so-called “supercasinos”, which MPs have recently tried to revive. Hornbuckle spent almost three years on the ground exploring the project.
He recalls: “We were all over the place. We were in Sheffield and Liverpool.” The plans included a location at the Sheffield Mall and potential sites in Scotland, including Glasgow and Edinburgh.
Then as you may know, everything fell apart.
Do we regret anything?” “Hell no!”
It’s also not meant to imply that he regrets projects or near-misses which didn’t materialize. Sometimes you’re right, and sometimes not. But do we regret something? “Hell no.”
Japan is a good example of a country that could seem like stepping into the unknown. Hornbuckle acknowledges that it appears risky on the surface, given there has never been an integrated resort or casino in this country.
He adds, “if you step back and look at the bigger picture, Pachinko generates $30bn in revenue every year.” In Osaka, it is between $3-4 billion dollars and 19 million residents live in the city. This is gambling at its most raw form.
The lessons learned from these [projects] can be applied to a new project, and you could create an integrated resort worth $10 billion that would attract both locals and foreign visitors.
The BetMGM Question and Digital Expansion
MGM Resorts has a property on Europe, but it is a dream. After its acquisition of LeoVegas for $604 million, BetMGM is now live in Great Britain. The campaign features Chris Rock.
Hornbuckle’s vision for MGM is “the premier gaming entertainment company in the world”. However, due to MGM’s limited ability to scale up properties to a large extent, Hornbuckle believes that online will be MGM’s next frontier.
He says that when investing in gaming you should look for companies with great locations, and who are well-diversified. Our company is based in Las Vegas, and we also have significant assets in Asia, as well as domestic assets that are profitable in the regional markets. We make just over $1 billion a year from our regional business.
We want to diversify our digital offerings through BetMGM – both in the United States and internationally – through LeoVegas, whether it’s Europe, Canada, or South America. It’s an important way for us to keep in touch with our customers all year round.
Vegas visitors average 1.2 visits per year. Hornbuckle wants to create a complete omnichannel eco-system to distinguish the company from its online competitors. He suggests that BetMGM’s regional properties in Europe, and then Latin America, will play the same role.
Scaling Up for the Online Push
In May, the purchase of Push Gaming was driven by the desire to create a differentiated multichannel experience. It opens the door to creating exclusive content.
Hornbuckle says that “these games could be launched digitally or brick-and mortar, using our balance sheet, to create something pretty unique.” Imagine life-changing prizes from games we have created sitting in Vegas or elsewhere in the world.
The idea of creating our own games was important to us, as it would feed both our digital and brick-and mortar assets.
Hornbuckle, who is pushing Push as the slot expert for his company, is looking at ways to grow. Live dealer is one of those areas that he is considering. He says that BetMGM US and LeoVegas both use Evolution, “but the last time I looked, we had a number of dealers.” We have an interesting brand environment, and it’s our right to offer this service.
MGM’s live casino offers “fizz, celebrity and a whole lot of fun”. Even suggesting that celebrity players may play from the Las Vegas casino floor.
How about the BetMGM US joint-venture?
LeoVegas, Push and other online casinos have a great deal to offer. However, they are currently focusing on overseas markets. Hornbuckle would surely want to show off this special offering in his own backyard? It was a PS8.1bn offer that fell through in February 2021.
He says, “We are enjoying our partnership here with Entain.” We’re trying to figure out how the market works. “It’s complicated, large-scale, not free and expensive. We’re all trying to find our way.”
MGM Resorts is the owner of BetMGM, says he, but this doesn’t mean LeoVegas, which has a similar lion-mascot to its parent, will disappear. As legislation moves through the LatAm parliaments, however, he acknowledges that local brands are leading. More M&As may follow.
He says, “We would like to be able to acquire these brands on a large scale and add them back in the portfolio.” We will evaluate each market separately with our partners. This can be done directly through the BetMGM Brand or via a local brand.
All roads Lead to Las Vegas
He continues, “These igaming options ultimately play an important role in driving MGM Resorts customers back to their properties.” He says that products become more ubiquitous and “more consistent over time” as there’s only so much one can do with a small display. It’s inevitable that when marketing rationalises operators will be asked to distinguish themselves from their competitors.
Hornbuckle: “We believe that it is omnichannel.” We believe that if someone has a single wallet and comes to the casino, their money can be left in their account. They can then go back to Colorado to continue playing. Then they can be rewarded, recognised, and come back to Vegas.
We think that there is value to it in the long term. Las Vegas is a great place for sports betting because sports fans are a younger age group.
The emerging sports eco-system is what attracts customers, not entertainment or gaming.
He adds, “Only a few people in the entire world can match our level of expertise and scale.” We’ll be hosting a Super Bowl in two months. I will bring my customer along to watch the Super Bowl. You can do all sorts of activities and other things here, which you cannot do anywhere else.
How to build a podium on an international scale
MGM Resorts is a multi-faceted company that competes on many fronts. Its home city of Las Vegas also has plenty to offer.
After years of hard work and delays in legislation, Japan is now finally a reality, as well as an opportunity for the UAE. He says that the second opportunity is digital expansion. This will allow BetMGM to duplicate its US podium by disrupting European and LatAm market.
He says, “if it works great.” If it fails, I’m responsible. It’s thrilling to see things through that perspective.
