MGM Digital to “continue on path to profitability” despite Brazilian challenges

Leadership figures at MGM Resorts International have affirmed that the bleak situation it faces in Brazil “will not drag on forever” for the multi-market operator. The business reported revenue of $4.2bn (£3.1bn) as it cut its year-on-year net loss by $268m to $17m and made consolidated adjusted EBITDA of $403m. In the company’s investor call, however, there was definite focus on BetMGM Brasil – its joint venture with media giant Grupo Globo. “MGM Digital will continue on its path to profitability regardless of the outcome in Brazil,” said Bill Hornbuckle, President and Chief Executive Officer of MGM Resorts. Gary Fritz, Chief Commercial Officer and President of MGM Digital, added: “Certainly, the election result caught us by surprise – I think it caught everybody by surprise. “That being said, when the provisional measure was put into place last month, we certainly began the contingency plan in Brazil. We were able to reduce some of our fixed costs in Brazil accordingly. “I do want to thank our team in Sao Paulo for continuing to remain with the business, and for their perseverance during what is a challenging set of circumstances.” BetMGM Brasil was the 36th-largest operator in Brazil, according to the Blask Index, before the market was curtailed last month by President Luiz Inácio Lula da Silva. However, despite its growing presence there being brought to an abrupt halt, the business maintains that it has plans regardless of what the future holds. Fritz expressed gratitude towards the knowhow of Grupo Globo in the region. “As much as anybody else, we are watching what the Brazilian Congress is going to do, what the Brazilian courts are going to do,” he continued. “We feel blessed to have our partner down there who can help navigate through some of the noise perhaps better than anybody else in the country can, so we feel privileged to have them as partners. “And we will just see what and how the regulation shapes out, and we are planning for a variety of different scenarios.” MGM outside of Brazil In Europe, MGM Digital made “great strides” in Q3 as the BetMGM brand drove 8% top line B2C growth following a particularly strong performance in Spain, the Netherlands and the UK. For the entirety of MGM Digital’s operations, revenue grew 6% YoY from $174m to $184m, while it cut its segment adjusted EBITDAR loss to $4m from $23m. Meanwhile, in the US, the business continued to stand firm on its position regarding prediction markets. Hornbuckle directly addressed the sector, highlighting the Ninth Circuit Court’s ruling against Kalshi that classified sports event contracts as sports bets rather than federally regulated swaps. “They are sports bets. The judge’s opinion is that it is disingenuous to deny that the contracts are sports bets under a reasonable person’s understanding and that everyone knows a sports bet when they see it,” he affirmed. “We could not agree more and are hopeful that the Supreme Court will review the case sooner rather than later.”