It would be difficult to paint any good news out of a $535M loss, however, the dawn and momentum for BetMGM have come to the rescue for MGM Casinos.
Quite understandably, Covid-19 has been the primary cause for MGM Resorts International to lose over a half-billion dollars in the third quarter. The casino giant continues efforts to revive and restart its gaming operations in Las Vegas and regional markets as the pandemic continues to permeate the retail-onsite gaming industry.
While Penn National reported strong Q3 earnings, MGM Resorts International did not have the same luck last Thursday. MGM reported revenue of $1.13 billion for Q3 that ended September of 2020. That missed the Zacks Consensus Estimate by 7.61%. It was the sixth consecutive negative quarter for the massive gaming conglomerate as MGM shares have dropped 39.6% since January while the S&P 500 has gained 1.3%.
MGM’s Q3 2019 red ink was blamed on a non-cash impairment related to the sale of real estate under some of its Vegas casinos. This year, no doubt it is COVID-19 receiving the total blame and though the balance sheet results are negative they are quite real.
In Las Vegas, MGM’s revenue was down 68% year-on-year to $481M and earnings. Those results were before paying rent to its REIT landlord and plunged 97% to only $15M as the casinos struggled under their new COVID-19 capacity limits. Table game drop and slots handle were both down 41%, while hotel occupancy slumped 48 percentage points to only 44%.
US regional operations fared slightly better, with revenue down a mere 40% to $557M while earnings fell 46% to $146M as table game drop and slots handle both dropped about 34%. All MGM’s US casino resort properties have now reopened following their total pandemic closure. However, only on a limited basis with several restrictions for the immediate future due to Covid-19.
MGM CEO Bill Hornbuckle helped explain some key metrics involving Q3 for the corporation last Thursday during a conference call with analysts.
MGM’s entire portfolio in six states is now operating, albeit under state-mandated health and safety programs and capacity limits set both by state regulatory bodies and through the company’s own pandemic remediation plans. MGM’s third quarter results were an improvement over its second quarter numbers, which reflected a time when many of its properties were still closed.
The third quarter offered signs of stability and recovery driven by strength at our US regional operations. We remain focused on responding to the pandemic with effective health and safety protocols. We have modified our operating model to adapt to the current environment, and we are executing on our long-term growth initiatives.
Echoing the meteoric rise of sports wagering within the US in 2020, BetMGM has evolved as a major player on the map joining UK gambling operator GVC Holdings.
In the four states that BetMGM’s sports betting app is currently available, MGM says it has boosted its combined market share from 4.5% in January to 8.7% as of September. BetMGM launched online wagering in Tennessee this past Sunday with Michigan also confirmed to come on board shortly before the end of the year. At last Wednesday’s meeting of the Pennsylvania Gaming Control Board (PGCB), BetMGM received approval for two operator licenses. One for interactive gaming and the other for sports wagering.
BetMGM has plans for New Mexico coming soon, while online casino/poker apps will be in three US states by year’s end. BetMGM claims to be the number one iGaming operator in New Jersey with a nearly 18% market share for the year-to-date (over 20% in Q3).
“BetMGM has gained significant momentum,” Hornbuckle said. “We’re now a top three operator in every market where it is live, and revenues are publicly reported.”
Hornbuckle also reported that BetMGM has increased its 2020 net revenue projection to between $150 million to $160 million, up from its original $130 million predictions. The company is acquiring customers through its 34 million-member player rewards program and through other relationships.
Super Bowl LVII in Arizona Where Sports Betting is Legal: New Trend?
Betting | 27 January - 06:17 | Mike Lukas
CO’s Ute Tribe Looking to Offer Mobile Sports Betting Statewide, Request Change
Betting | 26 January - 04:50 | Mike Lukas
Kentucky Rep. Preparing Sports Betting Bill: Online Poker Out, Problem Gambling In
Betting | 25 January - 08:59 | Mike Lukas
Larry Gibbs is both a seasoned journalist and a respected online gaming industry consultant. His wry commentary & sharp analysis have appeared in numerous top gaming and sports wagering publications. He has also served as Vice President of US Gaming Services, a marketing research organization with 15 years of experience in US online wagering. He has spoken at noted gaming industry conferences including G2E, GiGSE, and NCLGS.
Email: [email protected]
© Rebel Penguin ApS 2023 (a subsidiary of Gaming Innovation Group Inc.)
We support responsible gambling. If you feel like you're losing control over your gambling experience, call 1-800-GAMBLER (NJ, PA, WV), 1-800-9-WITH-IT (IN), 1-800-BETS-OFF (IA), 1-800-522-4700 (NV), 1-800-522-4700 (CO, TN), 1-855-2CALLGA (IL), 1-800-270-7117 (MI).
WSN.com is registered with the New Jersey Division of Gaming Enforcement (DGE) under affiliate vendor ID 89744, with the Indiana Gaming Commission (IGC) under certificate of registration number SWR-000148, approved by the Pennsylvania Gaming Control Board as a gaming service provider, under certificate registration number 117656-1, possesses a Vendor Minor sports betting license from the Colorado Limited Gaming Control Commission (account number 94414163), granted a vendor registration number VR007603-20-001 by the Michigan Gaming Control Board, an interim Sports Wagering Supplier license, under license number SWS 066, issued by the West Virginia Lottery Commission, a sports betting vendor registration, under registration number #100400, issued by the Director of Gaming Licensing and Investigations of the Virginia Lottery to operate in the State of Virginia, and a Vendor Registration issued by the Sports Wagering Committee of the Tennessee Education Lottery Corporation.
Advertising disclosure: WSN contains links to online retailers on its website. When people click on our affiliate links and make purchases, WSN earns a commission from our partners, including ESPN and various sportsbooks.