MGM Achieves Record Q2 Revenue as BetMGM Moves Toward Profitability

MGM reported a revenue of $1.95 billion for the second quarter of 2023, marking a 43.4% increase compared to the same quarter in the previous year. This growth was primarily attributed to the lifting of Covid-19 related entry restrictions in Macau. CEO and president Bill Hornbuckle highlighted the advancements of BetMGM, the company's online joint venture with Entain, stating, "BetMGM reported that it achieved its first positive EBITDA quarter and remains on track to achieve its next milestone of second half profitability." Despite this progress, BetMGM incurred a loss of $22.5 million during the quarter, although this represents a significant reduction of 68.4% in losses from $71.2 million in the same period last year. In Q2, MGM disclosed an operating income of $371 million, a decrease from $2.4 billion reported in the prior year, attributed largely to the sale of its real estate investment trust, MGM Growth Properties LLC. The company's net income for the quarter was reported at $1.8 billion, influenced by the same sale, compared to $201 million year-over-year. MGM’s adjusted EBITDAR was recorded at $1.1 billion in Q2 2023. With the recovery of operations in Macau, MGM faced rising costs amounting to $3.55 billion. Casino-related costs surged by 65.5% to $1.03 billion year-on-year, while other costs associated with rooms, food and beverage, reimbursed expenses, and general costs saw more modest increases. Conversely, entertainment and corporate expenses saw slight declines. For the six-month period ending June 30, the company’s revenue came to $3.83 billion, representing a 21% increase year-over-year, with an operating income of $1.10 billion and a net income of $667.6 million. During the earnings call, Hornbuckle expressed optimism regarding MGM’s application for a casino license in New York, suggesting the process is on track. Despite some operators’ frustrations over delays, Hornbuckle stated, "I’m hopeful in the next month or so that we’re going to hear something from the commission and ultimately get the process rolling.” He added, “We’ve not got any specific indication, but we do believe it will happen shortly and are hopeful to that. So that remains on track, I think, for some time in 2024 getting licensed and then pushing on from there would be our goal and our hope.” In July, MGM announced a new partnership with Marriott International, incorporating digital integrations between their booking platforms and the Marriott Bonvoy loyalty program. Hornbuckle emphasized the opportunity to market BetMGM to Marriott customers, stating, “Ultimately, it’s our ability to market to their customers and then their customers having an opportunity to see BetMGM and its context.” He noted, “We have a programme that I think that’s going to motivate Bonvoy points for those folks ultimately. It sits independent with BetMGM today, but I think it’ll be a key driver.” He concluded, “And when you have a 180 million people aware of a product, we think it’s pretty significant and interesting and they can get rewarded in Bonvoy points and ultimately do things, both inside that organisation and ultimately back within our own.”