Posted on: August 4, 2022, 07:22h.
Last updated on: August 4, 2022, 07:47h.
MGM Resorts International released its latest financial health report this week, reporting over $2.1 billion in revenue for its Las Vegas operations. In an earnings call on Wednesday, the gaming operator offered insight into its Asia Pacific future, which could hold several changes.
MGM is currently considering become the second US-based operator in Thailand. The country itself is in the process of considering whether or not opening a land-based casino market is viable.
MGM CEO and President Bill Hornbuckle highlighted the company’s interest in Thailand during the earnings call, according to Inside Asian Gaming. He also provided a hint about the company’s continued interest in maintaining casino operations in Macau.
MGM currently has a lot going on in the Asia Pacific theater. It has long been a part of Macau’s gaming market and hopes Japan will approve Osaka’s integrated resort (IR) proposal later this year.
Asia Pacific Gaming Future Bright
MGM knows it will have a huge financial commitment if the Osaka project moves forward. Along with its consortium partners, it will need to spend at least $2.5 billion to fund the IR. In addition, it has other financial obligations for the improvement of infrastructure in the area.
However, the company is optimistic about its financial stability. Its recent quarterly financial announcement supports this, as does the almost $6 billion in cash and cash assets it has on hand.
As a result, MGM knows that Japan can be “another cornerstone” for the company in Asia. The IR would be just one of several possibilities it undertakes in line with continued M&A activity in the global casino ecosystem.
Along with that activity is a consideration to enter Thailand. The country has yet to finalize whether it will develop a casino market. However, Hornbuckle indicated that the company will “watch what happens” in the country.
Still, he cautioned that Japan may consume most of its resources should its IR in Osaka move forward.
Macau’s Casino Future Raises Questions
In Macau, where MGM runs its MGM China subsidiary, the SAR’s casino future has several unanswered questions. There’s little doubt that the company wants to continue to be a part of the market. However, it will keep its options open as the industry changes.
Macau’s six licensed casino operators are now beginning to submit their applications for new concessions. Over the next five months or so, a committee will review the applications before the SAR issues new licenses at the end of the year.
Macau is making considerable changes to how it issues concessions, as well as the obligations of the operators. Notably, it wants upfront and continuous financial investments from the operators.
Hornbuckle stated in the earnings call that a “significant investment would have to be something” MGM China would have to “really understand and study.” The investments and the 10-year shelf life of the new concessions change the panorama of gaming in the SAR.
The executive’s comments on Macau don’t reflect any desire to exit the market. However, amid ongoing losses and continued COVID-19 issues in the city, expanding operations beyond current capacities in Macau might be off the table.
Still, there is much room within its current structure to fill in some gaps. With the move away from junkets, MGM has dead space where it can incorporate new options, such as activities related to sports and culture. Both are high on the priority list for Macau going into its new era under Chinese rule.