MGM says strong October in Macau follows record quarterly market share

Casino operator MGM China Holdings Ltd has seen strong trading in October following record quarterly revenue and market share in the three months to September, said Bill Hornbuckle, chief executive and president of its parent, MGM Resorts International. Speaking on Wednesday during the United States-based group’s call to discuss third-quarter earnings, Mr Hornbuckle said MGM China’s Macau gaming market share reached 19.2 percent in September, taking its third-quarter share to a record 17.1 percent. “These trends have continued into the fourth quarter with strong October performance thus far,” he stated. “While the [Macau] market remains competitive, we are focused on our operations, and the execution is paying off.” In Macau, the MGM group runs the MGM Macau resort (pictured) on Macau peninsula, and MGM Cotai in the city’s Cotai district. Jonathan Halkyard, MGM Resorts’ chief financial officer, said visitor volumes to MGM China’s two properties during October’s Golden Week holiday period increased by 10 percent year-on-year. “Premium mass continues to drive growth,” he said, adding that customers had responded positively to refurbished products and premium spaces. Mr Hornbuckle said the renovated Supreme Club at MGM Cotai had resulted in “longer playing times and higher playing levels” among high-end customers. A high-limit slot area at the property, opened in July, was “attracting more rated players and driving higher slot volumes,” he added. Asked about suggestions that the highest-end players had been less active across several gaming markets during the third quarter, Mr Hornbuckle said that did not reflect the MGM group’s experience, citing high-end play in Macau. MGM China management also addressed questions about the impact of competition and promotional spending on profitability. It cited a quarterly margin of approximately 26.9 percent and reiterated its expected margin range of the mid- to high-20s of percent. Management said its approach to attracting premium mass customers involved products, service, innovation and operational efficiency, rather than being determined solely by spending levels. Mr Halkyard said MGM China’s quarterly revenue grew by 5 percent year-on-year, while reported earnings before interest, taxation, depreciation and amortisation (EBITDA) declined by US$20 million. The brand fee payable to MGM Resorts increased by US$22 million over the same period. “Margins were consistent when taking this brand fee into account,” he stated. On Japan, Mr Hornbuckle said MGM Osaka was approximately 11 percent complete and “remained on schedule and on budget” for a 2030 opening. Approximately 70 percent of foundation piles had been completed, while concrete and steel fabrication work was progressing, he added. MGM Resorts International and Japan’s Orix Corp are the main partners in the JPY1.51-trillion (US$9.56 billion) MGM Osaka project, Japan’s first integrated resort (IR) with casino, alongside other Japanese businesses as minority investors. Mr Halkyard said MGM Resorts had spent approximately JPY114 billion on the project to date. The group expected to contribute a further JPY150 billion to JPY160 billion – approximately US$1 billion – in each of 2027 and 2028, completing its funding commitments, he added. Those contributions would mainly be financed through cash on hand and free cash flow, although MGM Resorts would consider further Japanese yen borrowing following a facility arranged with relationship banks, the CFO said. Mr Halkyard described MGM Osaka as fully funded through the commitments of MGM Resorts and Orix, together with a senior credit facility in Japan. He suggested the project could open with leverage of approximately 2.0 times, creating scope for refinancing before opening or shortly afterwards and potentially returning funds to the partners. The planned Japan contributions would somewhat affect MGM Resorts’ capacity for share repurchases over the next two years, Mr Halkyard acknowledged. He nonetheless identified Japan investment and share buybacks as the group’s two main capital-allocation priorities.