MGM eyes Pennsylvania as casinos boost Q3 results
MGM Resorts has reportedly applied for an online gaming licence in Pennsylvania despite not having a land-based presence in the state after the operator’s casino business helped the company to post better-than-expected results in the third quarter.
Consolidated net revenue climbed 7% year-on-year to $3bn (£2.4bn/€2.6bn) in the three months through to September 30. However, domestic net revenue from MGM Resorts properties in the US fell 2% to $2.2bn, while operating income from the business also dropped from $545m last year to $435m.
According to Online Poker Report, MGM filed a submission ahead of the today’s (Wednesday’s) deadline for out-of-state online gaming licence applications in Pennsylvania and is ready to stump up the required $12m fee.
Pennsylvania has awarded a series of online gaming licences, but is still yet to hand out four online poker licences, three online slot licence and three online table games licences. MGM is believed to be keen on acquiring one of each of the licences.
Those operators that missed out in the initial licensing process will have the chance to win a licence in a lottery-style draw.
Reflecting on MGM’s trading update, chairman and chief executive Jim Mirren said that the company had performed well despite “tough” year-on-year comparisons.
“Our third-quarter operating performance exceeded our expectations despite the tough year-on-year comparison, resulting from robust casino business and an exceptionally strong event calendar last year,” he said.
“During the quarter, we successfully opened MGM Springfield, which has been well received by our customers. Earlier this month, we also officially opened the NoMad Hotel at Park MGM, which will help expand our customer reach.
“We remain highly focused on our strategic priorities, including maximising the performance of our portfolio of premier properties, driving growth in free cash flow and delivering on our capital allocation strategy.”
During the three-month period, MGM struck a series of major deals as part of its push for growth in the expanding legal sports betting market across the US.
In July, MGM linked up with Ladbrokes owner GVC in a move they said will help to “dominate” the market, while MGM also entered into a partnership with Boyd Gaming that would see the two casino operators share market access across 15 states.
MGM soon followed this up by becoming the official partner of NBA basketball in a first-of-its-kind deal for major league US sport and announced a similar deal with ice hockey’s NHL earlier this week.
In addition, shortly before the end of the quarter, MGM took over the operation of Hard Rock Rocksino, the largest casino resort in Ohio. However, the state is yet to legalise sports betting, so activity will be casino-based for the time being.
Murren added: “Looking further out, our growth will be driven by the continued ramp of our newly-opened properties along with our disciplined approach to improve our margins throughout our resort portfolio.
“We also are executing on additional targeted growth opportunities in key areas including sports betting and Japan's upcoming Integrated Resort market.”
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