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BetMGM close to profitability as MGM hits record revenue in Q2

| By Zak Thomas-Akoo
Land-based and online gaming operator MGM Resorts International reported all-time record revenue in Q2, as the company’s online business BetMGM announced its first EBITDA positive quarter.

MGM recorded $1.95bn in revenue in Q2, up 43.4% from the same quarter the previous year. The operator put the increase down primarily to the removal of Covid-19 related entry restrictions in Macau.

MGM CEO and president Bill Hornbuckle also chose to highlight the progress made by its online joint venture with Entain, BetMGM.  

“BetMGM reported that it achieved its first positive EBITDA quarter and remains on track to achieve its next milestone of second half profitability,” he said.

However, despite this, the online gaming platform still recorded a $22.5m loss during the quarter. This represents a 68.4% fall in losses compared to the $71.2m reported in the same quarter the previous year.

MGM reports steady profits in Q2

On this total, the business announced it achieved an operating income of $371m, compared to $2.4bn reported in the same period the previous year.

However, MGM noted this enhanced total was mainly due to the sale of its real estate investment trust MGM Growth Properties LLC.

Year-on-year comparisons with company’s net income, which stood at $201m, was similarly affected by the sale, with MGM’s Q2 net come standing at $1.8bn.

The company also recorded its adjusted EBITDAR as $1.1bn in Q2 2023.

Costs rise as Macau reopens

In line with the recovery of MGM’s Macau operations in Q2, the business’ costs also rose to $3.55bn.

Casino costs increased 65.5% to $1.03bn year-on-year. Rooms, food and beverage, reimbursed costs and general costs all experienced more modest rises. Meanwhile, MGM’s entertainment and corporate expenses fell slightly.

For the six-month period ending 30 June, the company reported $3.83bn, up 21% from the previous year. From this, the company achieved an operating income of $1.10bn and a net income of $667.6m.

New York licence on track for 2024

During the company’s earnings call, Hornbuckle was positive about the prospects of MGM’s New York licence application.

The operator has been bidding for one of the city’s upcoming casinos licences and is often considered among the leading applicants.

While some operators have voiced frustration at the sluggish process, such as Ray Pineault in his interview with iGB, Hornbuckle said he was confident progress would be made soon.  

“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,” said Hornbuckle.

“We’ve not got any specific indication, but we do believe it will happen shortly and are hopeful to that,” he added. “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.”

Marriott deal opportunities for BetMGM

In July, MGM announced it would be entering into a new partnership with the Marriott International hotel chain.

While the terms of the deal involved digital integrations between the business’ booking platforms and Marriott Bonvoy loyalty programme, Hornbuckle highlighted the potential to cross sell BetMGM to the hotel chain’s customers.   

“Ultimately, it’s our ability to market to their customers and then their customers having an opportunity to see BetMGM and it’s context,” said Hornbuckle.

“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.

“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.”