Casino operator MGM Resorts said that a strong performance by its recently enhanced US operations overcame continued weakness at its Macau joint venture in the third quarter of 2016. As per the recent figures released by MGM on Monday reported a total revenue of 42.73 b in the three months ending September 30, which is 10.6% higher than the same period last year. Net income soared over 700% to $535.6m and all thanks to a $430m gain on the company’s recent acquisition of the remaining 50% stake of Atlantic City’s Borgata casino from former partner Boyd Gaming.
MGM CEO Jim Murren celebrated the “tremendously strong quarter” which generated the best net revenue earnings at MGM’s domestic properties since the pre-recession year of 2007.
MGM’s gaming revenue at its domestic resorts was up to 23% to $1.9b and thanks to the share offered by Borgata which generated $51m during the quarter. If this Borgata deal would have taken shape the total domestic revenue would have been up a more modest 7%. Domestic table game hold percentage gained 3.4 points to 23.7% and slots revenue jumped 19% although that latter number falls to just 3% absent the Borgata deal. Even room revenue was up 14% as Las Vegas occupancy was nudged up by one point 97%
MGM China CEO Grant Bowie said: “the in-development MGM Cotai property wouldn’t feature any junket-driven VIP rooms when it opens in spring 2017. Bowie said MGM was talking with some junket operators but felt it was prudent for MGM to build mass and premium mass momentum before enlisting junket assistance.”
Bowie further added: the company needed to be pragmatic about the fact that the junket business was stagnant. Bowie insisted that MGM would continue to collaborate with junkets at its peninsula property but didn’t see the wisdom in opening new junket VIP rooms that would only serve to further dilute the overall VIP market.
Finally, CEO JIM Murren threw some shade at Las Vegas Sands’ boss Sheldon Adelson for his recent claim that Sands had a leg up on its rivals in Japan because Osaka officials “think we’re the best company.” Without mentioning Adelson by name, Murren said that any operator who claimed to have an inside track “in Osaka, for example” was “wrong.”
