MGM at J.P. Morgan Forum: Digital Growth and Strategic Renovations

On Thursday, 13 March 2025, MGM Resorts International (NYSE: MGM) presented its strategic vision at the J.P. Morgan Gaming, Lodging, Restaurant and Leisure Management Access Forum. The focus was on the burgeoning digital business, with BetMGM projected to generate $2.5 billion in revenue. MGM also highlighted robust demand in Las Vegas and ongoing investments in infrastructure, while addressing operational efficiencies and market expansion plans.

Key Takeaways

• BetMGM is expected to reach $2.5 billion in revenue, bolstered by product improvements and a shift from macro marketing.
• The interactive group aims for $500 million in revenue, with Brazil identified as a key growth market.
• MGM is investing $300 million in MGM Grand room renovations, with strategic repurposing of furniture.
• Operational efficiencies of $200 million are targeted, with $150 million anticipated this year.
• Expansion opportunities in Japan and Thailand are actively being pursued.

Financial Results

• BetMGM is projected to achieve $2.5 billion in revenue.
• The interactive group targets approximately $500 million in revenue, driven by the Brazilian market launch.
• MGM identified $200 million in operational efficiencies, with $150 million expected in 2025.
• MGM China contributed around $200 million to MGM Resorts last year through dividends.
• Over $2 billion in stock buybacks were executed in 2023, with similar activity in 2024.
• Maintenance CapEx remains at 4% to 4.5% of net revenue in Las Vegas.

Operational Updates

• Focus on digital business inflection, particularly BetMGM, with New York launch imminent.
• Strong Las Vegas demand driven by gaming, rates, and group business.
• $300 million investment in MGM Grand renovations; 600 rooms completed.
• Repurposing of Bellagio furniture at Luxor and MGM Grand furniture at Excalibur.
• Implementation of "front desk of the future" with technology like kiosks and mobile check-in.
• Increased resort, parking, and ATM fees.
• Unique single wallet system in Nevada.
• Licensing of Push Gaming products for BetMGM in the US.
• Use of Tipico sports betting software in Finland, Netherlands, and Brazil.
• Macau maintains a mid-teens market share.

Future Outlook

• Brazil launch is a key growth driver for the digital business.
• BetMGM aims for a 70% flow-through.
• iGaming expansion expected in Maryland, New York, Illinois, and Alberta.
• Brazil projected to surpass Ontario in market size.
• Thailand considered for MGM China expansion.
• Macau property margins expected in the mid-20s.
• Japan construction to begin in April, with completion by mid-2025.

Q&A Highlights

• Continued strong Las Vegas demand, driven by sports and non-gaming attractions.
• BetMGM’s success linked to product improvements and reduced macro marketing.
• Opportunities in single game parlay and live betting to boost engagement.
• Brazil anticipated as a significant growth market for digital business.
• Ongoing share repurchases at current valuations.
• Relatively under-leveraged balance sheet compared to Macau.
• MGM China entity to be leveraged for Thailand expansion.

For a detailed account, readers are encouraged to refer to the full transcript.

Full transcript - J.P. Morgan Gaming, Lodging, Restaurant and Leisure Management Access Forum:

Unidentified speaker: Okay. So moving right along, we’re happy to have the team from MGM here. We have CEO Bill Hornbuckle on my left, and then on his left, we have Jonathan Halkyard, CFO. Thank you guys for being here.

Bill Hornbuckle, CEO, MGM: My pleasure.

Unidentified speaker: Wanted to start off a little bit more high level and just kind of talk about what you’re thinking in terms of your strategic priorities for this year and going forward.

Bill Hornbuckle, CEO, MGM: Sure. Obviously, you’ve all seen the investment and the push we’ve made into digital. And so I think if there’s any single thing this year that will stand out, make a difference, and I think where the company is highly focused is in our digital presence and the inflection in that business. I mean, I think you’ll see our BetMGM business hit $2,500,000,000 give or take. And I think you’ll see our Internet, interactive group go to about $500,000,000 with Brazil on the horizon.

And so the inflection of that business is kind of priority one. Obviously, continuing to stay focused on Las Vegas, all that it offers. I think where the market has gone bodes to our strength in terms of youth of customer, average spend, millennial. When you think about our assets between Bellagio Cosmopolitan and ultimately, Aria, and I think that leans into our strength and we’ll continue to do that. We feel our regionals are solid as Iraq irrespective of what’s happening in Washington, D.

C. That business continues to perform. And so we like our regional position, and Macau continues to perform well. We’ve continued to hold share in the mid teens, and that hasn’t stopped. And so we’ll continue to do the kinds of things that we do there.

But I think singularly this year, it’s inflection in the interactive business and with BetMGM, and then obviously our development cycle. New York is just around the corner this year. I’m heading to Japan next week to begin to put some ultimate pins in that program and pushing that forward. And so we’re excited by all of it. But I think that’s the biggest inflection point.

Unidentified speaker: And if we think about kind of the demand you’re seeing in Las Vegas in the first quarter on your fourth quarter earnings, Scott, you talked about strong trends domestically in the first quarter. What do you think is kind of underlying that What do you think is kind of underlying that demand and driving that strong demand in the first

Jonathan Halkyard, CFO, MGM: quarter? Yes. We talked about it a bit on our earnings call in early February. We started out the year with an exceptionally strong January, really coming from all quarters. And the gaming business was strong.

Rates were strong not only from the FIT and transient business, but also groups. February and March are playing out just as we expected they would. You know, we’ve talked at length about the impact the Super Bowl had on our results back in 2024. Super Bowl, that event was very successful here in Las Vegas, but it’s never the same as having it in Las Vegas, at least from a room perspective. But the first quarter is playing out, exactly as we anticipated, strength from all sectors.

The groups are performing well in particular, you know, toward the February into March, which are very strong group months across the system. So, you know, all in all, I think a pretty good start to the year. And as we look out to the balance of the year, our results as a company and here in Las Vegas, I think will get a little bit less choppy than they’ve been in the past couple of quarters because we won’t have some of these comps year on year. And as Bill mentioned in his opening remarks, we expect to see this inflection in the results of our digital businesses, which we’ve improved our disclosures, a little bit more transparency to really show how those businesses are playing out.

Unidentified speaker: And so you’ve identified $200,000,000 of operational efficiencies. I think you’ve called out $150,000,000 you would expect to realize this year. Can you remind us kind of where that’s coming from, where you’re most excited about?

Bill Hornbuckle, CEO, MGM: Sure. When we use the word efficiency and excitement in one sentence, I don’t know if that’s exactly the right combination, but we are on track to do that. We’ve seen it already. About 35% of that is what we’re charging folks to do various things. I’ll go through a couple of those.

And the other 65 is mostly efficiencies tied to labor and some other things that we’ve done throughout the organization. It wouldn’t surprise you to know that our resort fees have gone up. It wouldn’t surprise you to know that some of our parking fees have gone up. If you’ve bellied up to an ATM machine lately, it wouldn’t surprise you to know that those fees have gone up. And so some of it’s fee based, based on general volumes, and we were under market in a couple of instances.

So I think we’ve positioned ourselves well, and we’re already seeing a return on that. And then a lot of it is just general best practice between the deployment of technology. This device, particularly on the front end, we went through something last year at New York, New York where, we push what we call the front desk of the future. If any of you have been over to the property, we used to have this massive desk with about 24 wickets. We’re down to five around the corner.

That desk has become a bar with slot machines in it, literally. We have kiosks. We have people checking in on this device now. We now have it on Internet for desktop. And so we continue to begin to push those functions.

A couple of mornings ago, I ran into a robot roaming around the floor of Bellagio cleaning carpets. And so we continue to do those kinds of things with automation. And I nothing’s ever a layup, but I think the $150,000,000 is well within our sight.

Unidentified speaker: Got it. And then you have the MGM Grand renovation this year. You know, what’s the overarching strategy behind, you know, positioning the property, repositioning the property, and then what’s next on the horizon?

Bill Hornbuckle, CEO, MGM: Look, we we hadn’t touched those rooms in about twelve or twelve years, right? Twelve plus. By the way, the vast majority of that furniture is ending its way over at the Excalibur. So while we’re redoing the MGM, those rooms are getting repurposed at the Excalibur as we speak. And so it’s an ongoing evolution, if you will.

And we’ve continued to do that kind of thing, particularly for Luxor and Excalibur. We took Bellagio, and if you walk into a Luxor room, you’ll see Bellagio furniture from a day gone by. As it relates to MGM, it is a significant step up. We’ve put $300,000,000 into those rooms. We were getting noise from our conference business and rightfully so.

And so you’ll see a good step up. And we’ve taken out the tubs in literally every and we had literally from the original MGM tubs in all the restrooms. And so a lot of its infrastructure isn’t pleasant. It’s noisier than most of our deals only because we’re impacting plumbing, but we’re attacking the infrastructure, the look. And if you see it, it’s highly sophisticated, orientated towards group and leisure customers.

And we’re down how many we’ve got about 600 rooms done already or something of that effect?

Jonathan Halkyard, CFO, MGM: Yeah, more than that now.

Bill Hornbuckle, CEO, MGM: And it’s I would clearly invite you all to go see it because it is a marked difference from where the MGM has been. Far more sophisticated, far more elegant, and we think a great product.

Jonathan Halkyard, CFO, MGM: And this is a this is a step. I mean, it’s a big step because of the magnitude of the property, but a step in a process the company’s been, taking on since 2020, with the systematic renovation of all of our rooms here in Las Vegas. Very important because there wasn’t much capital invested, in the last decade in the rooms, but now we’ve gotten through basically all of the rooms of the at the Bellagio, all of New York, New York. Bill mentioned Luxor, Excalibur. Next year, we’ll take on ARIA and then in ’twenty seven, ’twenty eight, Mandalay Bay and have done this really with very little disruption at all to our revenues.

And this is important. We’re going to reduce the average age of our rooms from about nine since remodel from about nine years a few years ago to four or five years now. And that will enable us to sustain growth in ADR and retention and growth of this, high value group business among other among other things. So really important capital program, but not crazy in terms of maintenance CapEx. We’re still spending only about 4%, four point five % of net revenue on maintenance CapEx in this market.

And I think doing things responsibly, like Bill mentioned with Luxor and Excalibur, pretty skinny expense, but still improving that room product, while we’re at it.

Unidentified speaker: And you presumably have enough space around the Strip that minimal to zero disruption to any type of group activity.

Jonathan Halkyard, CFO, MGM: Yes. Not to certainly not to groups. The MGM Grand, that will have a bit of an impact on revenues this year just because it’s, you know, at any time we have eight fifty rooms out as we go through it. So that will be probably a $65,000,000 impact for the year, one that will, you know, that we’ll be able to cover with some of the efforts that Bill mentioned around our efficiency programs in the past. So I mean, we got through New York, New York, renovating that entire hotel with virtually zero disruption to revenues.

Unidentified speaker: And then in terms of your positioning in the Las Vegas overall market and kind of some of the non gaming stuff that’s been added like the Sphere, and we’re talking about, you know, the Tropicana potential spot for the Oakland A’s, how does that benefit, overall visitation and kind of your business?

Bill Hornbuckle, CEO, MGM: Well, and I know you’ve all seen and some of you, I’m sure, have experienced by now the transformation to sports. I mean, what happened to T Mobile in the heart, obviously, ultimately, what led to Allegiant. And if anyone’s been to a game there, I’m sure many of you have. If you go to a Kansas City game and San Francisco can pick a team, there are as many visitors as there are homebound, which is, I sit not far from Mark Davis. He’s not happy and I’m loving it.

And, and so, you know, it’s a a market increase. Look, we always fill the town. This has always been about, and frankly, will continue to be about yield and what you bring in and what RevPOR is during any particular event activity. Sports has been and will continue to be a key driver. I had an opportunity to meet with John Fisher last week.

Baseball is coming. It will happen. What is around it? What ultimately Bally’s decides to do? Time to tell.

But he shared with and I think you probably saw last week, they announced the park, they announced the final design, they announced sponsorship, which is interesting. The first of its kind, for baseball anyways, with Las Vegas and the city of Las Vegas. So every time someone comes up to the bat on the on the left shoulder is a patch that says Las Vegas. If you’re left handed, I think they get you put it on the right. And so all of that activity case is meaningful.

And if you think about us, I I call it the Golden Triangle, but we’ve got T Mobile, Allegiant, and now baseball. And within that group, our 36,000 rooms are literally no more than 700, eight hundred yards away. And so it’s meaningful to us. Sometimes we don’t and I’ll give you a good example. Shakira, I just saw on the billboard as I was coming over here for Allegiant.

I could argue that Shakira should be at T Mobile all day every day for economic reasons and otherwise. She wants to be there. God bless her. But it’s our neighborhood. So people walk over the bridge and they come back, not the end of the day for any of us.

I feel the same way about baseball. I wouldn’t be surprised to see that ultimately the stadium there becomes the home of NFR at some point and other activity that will really solidify not only it and baseball in that location, but it’s literally in our front yard. And so we’re pretty excited by all of that, and it continues to drive yield more than anything else.

Unidentified speaker: Got it. Switching over to the digital side of things and maybe starting with BetMGM. The guidance that the team at BetMGM gave assumes $250,000,000 of incremental EBITDA. I think the flow through is a little bit higher than peers. Like what are you seeing from that perspective?

I think if we look at the state reports, you know, handle GGR share has all accelerated since some of these product improvements, but kind of talk about what you’re seeing there.

Bill Hornbuckle, CEO, MGM: Yeah. Well, it it it pins itself to product improvement, full stop. Well, there’s two sides. There’s product improvement, and I’ll give you a simple example like last year during the Super Bowl, not the Super Bowl, the one a year ago, we had a commercial. The commercial cost this was all said and done $13,000,000 Probably in retrospect wasn’t the greatest idea.

Frankly, nor was it a great commercial, to be honest. So other than that, it was fine. But our ability to pull back on macro, people know what BetMGM is now, particularly in the 28 states it’s in for sports, our ability to pull back on marketing and really pump the product, Single game parlay, omnichannel, a single wallet now, people can come here and take the money home with them and they do speed, just some of the simple things. We’re not the fastest, but we’re twice as fast as we were. And so I think we’ve stopped losing I don’t think I know we’ve stopped losing share.

I think we see a lot of green shoots, particularly in February January, February, and March, so far. And so everything we have seen would suggest that the projection we’ve given is real and that we think we can hit that target. The flow through is about 70%, so you’d go, well, that’s interesting. I would suggest historically, maybe we did some things that we’ve learned from marketing wise and expense wise.

Unidentified speaker: Makes sense. And then you recently launched the Nevada single wallet. And can you kind of talk about the benefits that you’re seeing there? I would imagine that it’s pretty great considering

Bill Hornbuckle, CEO, MGM: Yes, it is. Look, we’re the only one that has it here. It’s early days. And so to the extent I can come here and take my money home and continue in Colorado or any one of these other states that allow this, is compelling. It speaks to omnichannel.

We have a ways to go in tying the back end out from a rewards and a and a recognition perspective, but particularly for premium customers. We host at BetMGM, just like you host any one of our brick and mortar casinos, players. They have a host assigned to them. They look after them. They take they take them here to the Super Bowl.

We had a whole contingent come out for the Super Bowl that were just from BetMGM. And so after four years, we’re dialing all of that in and beginning to make it, I think, more and more meaningful and starting to show.

Unidentified speaker: And if we kind of look at what both you’ve said and what we can see from like the Illinois State data reports in terms of parlay mix, you’ve obviously done a lot there in terms of improving the product and getting your handle mix and bet mix up there. But how do you think about the live betting opportunity as a way to continue driving engagement?

Bill Hornbuckle, CEO, MGM: I think it’s real. We were part of and we bet MGM underwrite the purchase of Angstrom, which was a big quant house that basically sits in London. There’s about 50 folks in a room who sit there all day every day looking at odds, playing with odds, giving us real product and comfort around that product. So our single game parlay cards, our live card, is, you know, it’s as a percentage of our business has continued to increase like double digit every quarter. And so we’re getting more and more excited by that.

It is margin. You can appreciate at some point the top line is going to begin to plateau or slow. So for our business, it’s can we get to 11%, twelve %, thirteen % margin, particularly on some of those products. And I think the answer is yes. As we hopefully wait for and we think there’s a couple more states left for iGaming in the near future.

I won’t say the immediate future. But I think for us, it is about margin and it’s about product. And that is the key differentiator between where we were versus where I think we’ll ultimately get to.

Unidentified speaker: In terms of iGaming, legislation, we’ve seen a lot of it proposed since Ontario, went live in 2022. What do you think is the reason that it hasn’t gotten passed? Or what do you think, you know, needs to happen in order for some of these states to get over the finish line?

Bill Hornbuckle, CEO, MGM: Well, I think it’s somewhat, when a state has a need for tax. And so we tend to look at the blue states if you think about who actually allows it today, just by the way they’re governed, the programs they put in play, and the need for tax dollars, it wouldn’t surprise me to see Maryland, New York, Illinois, hopefully, and ultimately, Alberta this year, consider and and put in play iGaming just for that very reason. You know, it’s not the panacea we had hoped. I think you all know this in our business and I think in just about our competitors. IGaming in six states, but arguably in three, is two thirds of our top line and a vast majority of the bottom line in terms of contribution.

What happens in Michigan, Pennsylvania, and New Jersey are meaningful. And so to the extent a single state comes on board, there are big numbers to be had there.

Unidentified speaker: Yes. Makes sense. When we think about your wholly owned digital business, how do you think of growth there? I think you got it to similar loss this year to last year, obviously, contemplating the launch in Brazil. How do you think about same state growth there from a revenue perspective and also next states on the horizon?

Bill Hornbuckle, CEO, MGM: Look, well, remember, that business is not U. S.

Unidentified speaker: Sorry, next countries.

Bill Hornbuckle, CEO, MGM: I think there’s two things we’re trying to do. There’s three things we’re trying to do. Tipico, which was the sports betting software we bought, just went and played this week excuse me, last week in Finland, operating slick and fast, which is great. Now Finland is not exactly the world’s largest market, but it’s up and it’s operating. We’re going to take that to The Netherlands.

We’re ultimately going to take it to Brazil this summer. And so the idea of converting off of Cambie to our own system, that’s just a margin game. I mean, you know, we’re paying 10%, eleven %, twelve % for typical for Cambie, and now we’re not going to be doing that. And it’s a good product. As a matter of fact, it’s a very good product.

So we’re excited for that. We got Push Gaming, the other acquisition we made with inside that business, to now BetMGM. It’s gotten licensed in The US, so BetMGM can begin to carry its products. And so that’s a big deal and a big differentiator year over year. We’re excited for them.

Brazil though is the is the push. Brazil is really where it’s all going to be about. We think initially it’s an $8,000,000,000 market. We have an amazing park partner in global. I mean, think about CBS, ABC, and Disney combined in the context of media and eyeballs.

And so as we begin to dial that up, and we will begin to do so soon, there there everyone is struggling within Brazil right now, getting people online. You have to have facial recognition and there’s you know, to get through a sign up process is extensive. We think we’ve found something very specific and special to us in Global because of the way they sign up people for movie subscriptions and anything else and all their other products. We think there’s leverage off of that database and off of those people, which I think ultimately will uniquely position us to really excel there. Because if you’re not online already, it’s laborious.

And so we’re excited by where that goes. We have to really begin to dial that up within the next four to six weeks. But that’s I think Brazil will be that story. I think that business as is, BetMGM in a couple more markets, U. K.

Is stabilizing, Brazil goes from a $500,000,000 to $1,000,000,000 top line business.

Jonathan Halkyard, CFO, MGM: Those who follow our company’s financial results closely, I’m sure most of you do, just this past quarter, we began breaking out MGM Digital, along with our other main reportable segments, Las Vegas, the regions and MGM China. So, so we’re doing that purposefully so that our shareholders and potential shareholders can see the progress that we’re making in these digital businesses.

Unidentified speaker: And when we think about Brazil, obviously, there’s not a ton of information on kind of how the market is trending so far. But I think if you think about it from your perspective and what you’ve seen, is it similar to an Ontario because we had kind of a gray market here before, you know, it officially went legal or it sounds like you’re saying that, you know, it’s going to be much better, it could be much better.

Bill Hornbuckle, CEO, MGM: It will be bigger for sure. For sure. I believe it will be bigger. You can put for sure and take it for granted. But it will be bigger.

Yeah. Look, as you know, it was a great market. So the, Betano and a lot of these other brands had been there and continued to go forward. Unlike in some markets, they didn’t make them reset, so they could just keep going, which was is what it is. So we’ve got catch up to do, particularly all the new legit licensed brands have catch up to do.

But I think we will get there. When Globo has on television a betting odds show with the top guy, I’m trying to put an equivalent to it here in America. But just pick your favorite Fox Sports show, promoting the site, promoting gaming, promoting activity, promoting odds, promoting how he has a view on certain games. I mean, it is a big deal there. And we are everywhere there right now in terms of brand because of their exposure.

And so again, I mean, we’ll see, but I think it’s Ontario plus over the long haul.

Unidentified speaker: Got it. Moving on to to maybe talking a little bit about Macau. Yourselves as well as as well as peers kind of talked about a longer tail to to the Chinese New Year this year. You know, is there anything underlying that you think drove the the longer tail?

Bill Hornbuckle, CEO, MGM: I think there was an active understanding from the government in Beijing and the Xi administration to extend some spend and spending. And so I think they were promoting that in general, and Macau was a benefactor to that of note. And so the tail was long. And what we’ve seen is not new. I mean, we saw that last three year three two years ago last year and now this year, they have extended stay.

And it goes particularly last year and this year, the first three days are kind of at home family friends, and then they show up in a place like Macau and they’ll extend for a week. And so we saw, for lack of a better word, an additional week, from what historically you would call the Chinese New Year’s period. And so it was great. Macau has continued to perform well. You’ve all seen, I think, you all on top of these numbers, February, I think we almost pushed 18% share.

We’re holding our own in March. We held clearly hold 16 and change in January. So, you know, I hope and I believe after a couple of years now, we’re a mid teen share place full stop. And I believe that. I believe the things we’ve done there in terms of product offerings, incentives have worked well given our scale, remembering we’re the smallest keyed licensee there.

We have 2,002 keys, and then everyone else is well above us in some instances. And we’re holding real share. And so I’m proud and pleased with what they’ve done there. And they particularly understand their customers, the premium mass and how to cater to them. And I think it’s working.

Unidentified speaker: It’s something like high single digit room count share, correct?

Bill Hornbuckle, CEO, MGM: Yes.

Jonathan Halkyard, CFO, MGM: Yes. And about 12%, twelve point five % table game share. And we’re routinely doing 15%, sixteen % revenue share. I think it speaks to their focus on that segment and just some of the technology advantages that we have and the execution of the management team there. It’s exceptional.

And I’d also remind everybody that, what really matters also to MGM shareholders is, the dividend flow from MGM China to MGM Resorts last year between the dividends and our license fees around $200,000,000 and then just the equity value of MGM China, probably about $10 a share when it comes to MGM Resorts shareholders. So real value there that we don’t see entirely reflected in our share price, one of the reasons we’re such aggressive repurchasers of our own stock. I always try to get my commercial picture.

Bill Hornbuckle, CEO, MGM: It was. It was. It was.

Unidentified speaker: And from a market perspective, you know, I think a lot has been done outside of COVID to try to get people back into the market. But we’re still missing a certain percentage of visitation. What do you see the market doing in terms of being able to drive incremental visitation from here?

Bill Hornbuckle, CEO, MGM: Look, I believe it’s clearly stabilized. $30,000,000,000 is not a is a real number, and I think it’s only north of that from here. Obviously, China will continue to keep a watchful eye on the market and what it’s doing. The days of 45,000,000,000 plus in growth, you know, we may not see that for a while, frankly, or if ever. But they have willingly and openly let let it continue to grow.

And we have not seen any real concern around border crossings, visas, holdbacks for three years now. I mean, coming out of the pandemic, it was there was issues. We haven’t seen anything now for this is the third year, particularly through Chinese New Year’s where it was not a significant issue. You know, will it double? No.

But but will it continue to grow rationally? I think the answer is yes. And as long as it’s a rational growth, I think everyone, including most notably the government, will be happy and satisfied with where we are and where it’s going. And I know you all know this, but, it’s a good example. We’ve all been asked to push into, those things, both from capital and operating expense perspective, that motivate non gaming travel.

So we’ve done two things of note there. We have a world class museum and a partnership with with with a group called Pali. They’re the cultural museum institute of China, really the government. We just put a half a million people through, since the first of the year, our new museum. And so big deal.

We just opened a show last month, a month and a half ago now, with Johnny Mo. Johnny Mo was a guy who created the o eight Olympics, opening ceremony. He did a show called 02/1949, which is the year that Macau gets turned back over to China, by the way, if you’re wondering why 02/1949. And so, we continue to do those kinds of things that draw in additional visitors. Not necessarily tailored specifically towards gamers, but like Las Vegas, even though they say they don’t come to game, they do game.

Unidentified speaker: So what is some of these non gaming investments, what effect do they have on margins longer term?

Bill Hornbuckle, CEO, MGM: Well, I think you’ll see you’ve seen most. I think it’s appropriate to think of those properties in the mid-20s and continuing to do that. I don’t know that we’ll be over 30% with some of that overhead, but I think 25%, twenty six %, twenty seven % margins in those properties for the foreseeable future is very real and very obtainable.

Unidentified speaker: And let’s switch over to Japan. Could you give us an update on progress there?

Bill Hornbuckle, CEO, MGM: I’m literally heading there Sunday. We’re at a point where it’s time for finalization of construction contracts, pricing, and real green light. And I will come away from that with a better understanding this week. But it’s slated for April going in the ground with pylons, and the build cycle is through the middle of twenty twenty five. And so none of that has really changed.

And so we’ll be out next week sitting down with all the final contractors, understanding final pricing, etcetera.

Unidentified speaker: And as far as from where we are right now, you are the only operator in terms of a competitive market for the time being. Yes. What about some other areas of opportunity? There’s been a lot of talk about Thailand and regulations seem to be discussed quite frequently. What’s your latest take there?

Bill Hornbuckle, CEO, MGM: I think something happens there. I think it won’t go as fast as I would like to think it will. There’s just once you get into it, as you all know, there’s a lot to it. Now I don’t think it needs to take as long as it did in Japan, but there’s a lot to it. But I would like to think by first part of next year, first or second quarter, there’s real legislation and there’s a real process that’s been identified.

They’ve talked about five locations, two in Bangkok and three other locales. You know, we’ve stated publicly that if we did anything there, it’d be through our MGM China entity, and that’s still the plan and or the, you know, the point of access, if you will. In an amazing marketplace, I say nothing’s cheap to build anymore, but cheap to build, like it’s $0.35 to $0.4 on the dollar compared to anything here, and even cheaper to operate. And so if you were lucky enough to get a license and build something of substance, it’s a meaningful market. And I think the margin in that business would be pretty extensive.

Jonathan Halkyard, CFO, MGM: And the MGM China balance sheet is really under levered compared to the performance of that business, and we think it’s prospects. So that’s the appeal potentially of using that balance sheet as a vehicle to develop property in Thailand.

Unidentified speaker: And looking at the consolidated balance sheet, you guys have obviously purchased, I think, 40% of your float since 2021. What’s kind of the sustainability of the pace of share repurchases there? And what are your other capital priorities in terms of the balance sheet?

Jonathan Halkyard, CFO, MGM: Well, it really it does depend, in part on the trading value of the stock. I normally would have said that we would be coming to the end of that program. But at these levels, we feel as though it’s about as attractive an opportunity for capital allocation that we have is buying the company we know best at these valuations. So we bought over $2,000,000,000 of stock, I think, back in 2023 and almost that much in 2024. I don’t think that, you know, those amounts, are necessarily going to continue.

But, but at these levels, we think it’s a very attractive use of our capital. Other other priorities for capital allocation, will be investment in our properties, here in Las Vegas, not only maintenance, but some growth capital investments. Unfortunately, with as optimistic as we are about the the prospects for these digital businesses to inflect this year to profitability, they won’t require any additional capital investment. BetMGM has its own credit facility now, probably won’t even need to draw on that much. And in the wholly owned digital businesses, we think, are well capitalized and won’t require any additional capital to get to where they need to go.

Unidentified speaker: And then maybe one last one quickly. Is there anything that you would consider any type of asset that you would consider, you know, non

Bill Hornbuckle, CEO, MGM: core that you would

Unidentified speaker: consider selling

Bill Hornbuckle, CEO, MGM: at some point? Yes. All right. Thank you

Unidentified speaker: very much. Thank you.

Bill Hornbuckle, CEO, MGM: All

Jonathan Halkyard, CFO, MGM: right. Thanks, everybody.

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