MGM CEO Bill Hornbuckle Bullish on Las Vegas, Japan, Eyes UAE

MGM CEO Bill Hornback bullish on Las Vegas, Japan, United Arab Emirates

MGM Resorts International (NYSE: MGM ) CEO Bill Hornback is optimistic about the company's positioning in Las Vegas, noting that the operator will benefit from local arenas and The stadium will benefit from a series of major upcoming events.

In comments Thursday at the Bank of America Gaming & Lodging Conference, Hornback told analyst Sean Kelly that MGM's presence on the Southern Strip allows the operator to take advantage of the Las Vegas jackpot in November. Benefit from events such as the Super Bowl and others following the Super Bowl in February.

Two weeks ago, we set a record for the highest average booking week in our history. They're leaning toward the fourth quarter and Formula 1," Hornback said. "People are starting to look forward to the Super Bowl. We captured the NBA Championship taking place the first week of December (on T-Mobile). The signs we are seeing are encouraging. "

Specific to the F1 race - the first to be held in Las Vegas in more than four decades - the event, scheduled for Nov. 18, is expected to be a boon for the Las Vegas Strip casino resorts. The topic is already hot, with Hornback noting that race weekend room rates at the MGM venue are four times the normal rate and organizers are offering record credits to VIP bettors who come to town this weekend.

In other words, the F1 race is expected to attract many high-end tourists to Las Vegas, underscoring MGM's focus on wealthy customers. Hornbuckle pointed out at the Bank of America conference that 70% of operators' revenue comes from 30% of their customers. This highlights the benefits of improving the Bellagio and buying the Cosmopolitan in 2022 - allowing MGM to better cater to wealthy customers.

Hornbuckle talks Japan and New York

While MGM is the largest operator on the Las Vegas Strip, analysts believe efforts to obtain casino licenses in the New York metropolitan area and a planned integrated resort project in Osaka, Japan, are Potential long-term catalyst for May stock.

Last week, the New York State Gaming Commission (NYSGC) and the Gaming Facility Locating Board (GFLB) provided answers to a series of preliminary questions submitted by gaming companies vying for the state’s three licenses. Hornback noted that MGM, which operates the Empire City Casino in Yonkers, plans to submit the necessary paperwork by the end of the year. He hopes operators will be able to obtain one of the three licenses within a year.

As for Osaka, the project, in which MGM has a 40% stake, is facing some minor delays and cost overruns. But its location and possible long-term monopoly made it attractive to MGM.

"If you think about the market, we'll probably be the only casino in Japan for a long time," Hornback told Kelly. "There are 100 million people in Japan, 19 million in Osaka alone. It's closer to Shanghai, Beijing and northern Chinese cities than Macau."

MGM pays close attention to UAE

MGM's international expansion plans may include multiple markets besides Japan. However, the United Arab Emirates (UAE) is widely regarded as arguably the most attractive emerging gaming nation.

This situation has been further exacerbated by the recent establishment of the UAE’s first gaming regulator, the General Commercial Gambling Regulatory Authority (GCGRA). The appointment of former MGM CEO Jim Murren as chairman of the GCGRA board only added to the curiosity.

The first gaming license in the UAE could go to MGM rival Wynn Resorts (NASDAQ: WYNN ). But Hornback noted that MGM is setting aside 150,000 square feet of space at its non-gaming hotels in the United Arab Emirates in case broader casino gambling regulations are adopted there.