MGM Resorts CEO Bill Hornbuckle recently provided a comprehensive outlook on the company’s strategic priorities and market conditions, covering topics from emerging prediction markets to the resilience of Las Vegas and the ambitious Japan integrated resort (IR) project. His remarks at a recent Jefferies Global Consumer Conference offered key insights into MGM’s vision, demonstrating strong confidence in the company’s future trajectory.
Embracing Prediction Markets as the “Second Leg”
MGM Resorts CEO Bill Hornbuckle expressed considerable enthusiasm for the potential of prediction markets. He sees these markets as a significant evolution, potentially becoming the “second leg” of the sports betting landscape. Hornbuckle highlighted their capacity to deeply engage audiences with live events.
He noted that prediction markets foster a “stickiness” that could enhance viewership and interaction. This interest suggests a strategic move by MGM to explore innovative avenues for customer engagement and revenue generation beyond traditional sports wagering.
Las Vegas: A Resilient and Thriving Market
Despite previous concerns, Hornbuckle emphatically stated that Las Vegas is far from “dead.” He pointed to a robust recovery, particularly driven by the resurgence of convention business and a gradual return of international visitors. The CEO shared optimistic projections for the second quarter of 2023, indicating strong performance.
While international visitation, especially from Asia, has not yet reached pre-pandemic levels, Hornbuckle confirmed that it is steadily improving. The convention sector, a critical component of the city’s economy, has shown remarkable strength. This recovery underscores Las Vegas’s enduring appeal as a premier destination for both business and leisure.
Formula 1 and Future Growth
A significant highlight for Las Vegas is the upcoming Formula 1 Grand Prix. Hornbuckle described the event as a monumental opportunity. He anticipates it will generate substantial revenue for the city and leave a lasting positive impact on its global image. MGM is actively participating, constructing a grandstand to accommodate spectators for this high-profile race.
The CEO’s comments reinforced the view that Las Vegas continues to innovate and attract world-class events, further solidifying its position as a leading entertainment hub.
Commitment to the Japan IR Project
MGM Resorts remains steadfast in its commitment to the Osaka Integrated Resort project in Japan. Hornbuckle framed it as a long-term investment, underscoring the 40-year lease agreement. The company aims to break ground on the ambitious $10 billion project by the first quarter of 2024.
Financing for the project appears solid, structured with a 60/40 debt-to-equity split. The completed resort is projected to attract an impressive 20 million visitors annually. Hornbuckle acknowledged the complexities inherent in the Japanese regulatory environment and noted a shift in initial demand expectations, with a greater emphasis now placed on domestic visitors rather than primarily international tourists.
Despite these challenges, the MGM Resorts CEO expressed confidence in the project’s long-term potential. He emphasized its strategic importance and the sustained efforts to navigate the unique aspects of developing a resort of this scale in Japan. The project represents a significant international expansion for MGM, reflecting its global growth ambitions.
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