MGM Resorts International (NYSE:MGM) CEO Bill Hornbuckle says the Las Vegas recovery trajectory is solid, and the gaming company is taking steps to rejuvenate vital convention business that suffered at the hands of the coronavirus pandemic.
Earlier this week, the largest operator on the Strip revealed enhancements to its “Convene With Confidence” program, aimed at getting business groups back to in-person events and meetings. Additions include on-site rapid, molecular COVID-19 testing with delivery of “highly accurate results for events large and small.”
We’re back, is the bottom line here,” said Hornbuckle in an interview today with CNBC. “Things are returning with a velocity we haven’t seen in a very long time.”
Following the initial wave of coronavirus closures and subsequent reopenings last year, Wall Street was broadly more bullish on gaming operators with heavier Macau and regional portfolios over those, such as MGM, with heavy Sin City footprints.
Amid the combination of government stimulus checks, declining COVID-19 case counts, and increased accessibility to vaccines, the tide is turning in favor of Las Vegas-heavy names. Just this week, shares of the Mandalay Bay operator are up nearly 11 percent. Year-to-date, the stock is higher by 33.74 percent, good for one of the best showings among large-cap gaming equities.
Horbuckle Talks New York Sports Betting
The MGM CEO also discussed the sports wagering opportunity in New York, where it runs Empire City Casino in Yonkers.
Earlier this week, policymakers in the fourth-largest US state reached an agreement with Gov. Andrew Cuomo (D) to authorize mobile sports betting. Although MGM operates a land-based casino in the state, analysts didn’t immediately mention the company as one of the obvious winners under New York’s sports betting framework.
Rather, DraftKings (NASDAQ:DKNG), FanDuel, and Rush Street Interactive (NYSE:RSI) were highlighted as beneficiaries of the state’s setup for online sports betting. In the interview, Hornbuckle notes sports betting in New York is going to take some time, and that MGM is “trying to vector” its way through the proposal.
“We’re not sure we understand it completely yet,” said Hornbuckle of New York’s sports betting plans. But he adds the company is bullish on the state.
The operator’s BetMGM unit — a 50/50 joint venture with Entain Plc — is the third-largest mobile sports betting platform in the US behind FanDuel and DraftKings.
Hornbuckle also highlighted the opportunity set with internet casinos, which fall under the BetMGM business.
He called iGaming “the secret to this business,” and that it will eventually be two-thirds of the bottom line in the space.
That jibes with comments made by Goldman Sachs late last month. The investment bank said online casinos in the US today represent a $1.5 billion market. But that will surge to $14 billion in 2033 while delivering a compound annual growth rate (CAGR) of 27 percent for more than a decade.
BetMGM currently offers iGaming in four states.
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