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MGM Resorts continues winning streak in Las Vegas

| By Richard Mulligan
MGM Resorts International reported a fifth consecutive record-breaking quarter in Las Vegas during the final three months of 2022.

In a trading update for the period ending 31 December 2022, the gaming group said it generated consolidated net revenues of $3.6bn (€3.35bn/£2.98bn), an increase of 18% compared to the prior year quarter. This featured net revenues of $2.3bn from its Las Vegas Strip properties, which was up 27%. The increase was in part due to the addition of income from The Cosmopolitan of Las Vegas, which was acquired in May 2022, and partially offset by the disposition of The Mirage in December 2022.

MGM Resorts said results improved over the prior year quarter due to an increase in business volume and travel activity primarily at the Las Vegas Strip Resorts and Regional Operations, which includes the group’s properties outside Las Vegas. Regional Operations net revenues of $991m were up 10% on Q4 2021.

In Las Vegas, slots handle was up 26% to $6.7bn, with table games up 14% to $1.6bn and casino revenue up 2% to $554.0m. Rooms revenue increased 46% to $813.0m, with occupancy at 91% compared to 86% in Q4 2021.

MGM China’s net revenues of $175m in Q4 were compared to $315m in the prior year quarter, a decrease of 44%. MGM Resorts said takings during the quarter were negatively affected by a three-day Covid-19 related property closure at MGM Cotai as well as travel and entry restrictions in Macau.

For the full year, MGM Resorts posted consolidated net revenues of $13.1bn compared to $9.7bn in the prior year, an increase of 36%. Las Vegas’ figure was up 77% for the full year, with Regional Operations up 12% and MGM China down 44%.

The group’s operating loss for Q4 was $2.0m compared to operating income of $369.0m in the prior year quarter due primarily to a $1.2bn increase in non-cash amortisation expense relating to the MGM Grand Paradise gaming subconcession and an increase of $338m of rent expense recorded within general and administrative expense related to the VICI and The Cosmopolitan leases, which commenced in April 2022 and May 2022. These were partially offset by a $1.1bn gain on the disposition of The Mirage.

General and administration costs were up 62% to $1.2bn, with expenditure rising across casino, rooms, entertainment and food and beverage. During the quarter, MGM spent $352.0m on repurchasing approximately 11 million shares of its common stock, pursuant to plans outlined in March 2022.

MGM Resorts’ net income during the quarter was $284.0m, which was up on the $131.0m reported in the prior year quarter.

The group posted consolidated adjusted EBITDAR of $957.0 during the current quarter, with $877.0m of that coming from Las Vegas, which was up 26%. Table games win was up 13% to $375.0m with slots win up 29% to $625.0m.

Regional Operations was up 3%, with MGM China posting a loss of $55.0m compared to a positive $5.0m in Q4 2021.

For the full year, operating income was $1.4bn compared to $2.3bn in the prior year due to the costs attributed to MGM Grand Paradise and increased rent expenses.

Bill Hornbuckle, chief executive officer and president of MGM Resorts, said: “What we accomplished in 2022 is nothing short of remarkable, and is a testament to our strategic plan, scale, brand strength, talented team, loyalty programme and the diverse geographies and channels in which we operate.

“We believe that there is strong momentum in our business and our 2023 outlook remains bright, driven by a robust events calendar domestically, MGM China’s rapid year-to-date return to profitability and BetMGM’s ongoing improvement in 2023.”

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