Core Insights - The Zacks Gaming industry is facing challenges due to strained consumer spending, rising regulatory complexity, and compliance costs, but is benefiting from increased gaming revenues in Macau and strong demand for sports betting [1][3][4][5][6] Industry Overview - The Zacks Gaming industry encompasses companies that operate integrated casinos, hotels, and entertainment resorts, as well as those providing technology products and services in lotteries, electronic gaming, and sports betting [2] Key Themes - **Consumer Spending Pressure**: The U.S. gaming industry is experiencing reduced discretionary spending due to persistent inflation and rising costs, leading to more conservative spending habits among consumers [3] - **Regulatory Complexity**: The expansion of sports betting and iGaming is creating a fragmented regulatory environment, increasing compliance costs and compressing margins for operators [4] - **Macau Gaming Revenues**: Macau's gaming revenues rose 14.4% year-over-year to approximately MOP21.09 billion ($2.63 billion), indicating a steady recovery in the mass-market segment [5] - **Sports Betting Growth**: The legalization of sports betting across multiple states has significantly contributed to industry growth, with various digital platforms facilitating wagers [6] Industry Performance - The Zacks Gaming industry has underperformed the S&P 500 Index, rising 7.2% over the past year compared to the S&P 500's 15.7% growth [10] - The industry's current trailing EV/EBITDA ratio is 18.64, consistent with the S&P 500, with historical trading ranges between 14.16X and 28.46X over the past three years [13] Notable Companies - **Las Vegas Sands (LVS)**: Benefiting from strong travel demand and improved conditions in Macau and Singapore, with a 22% share price increase over the past year and a 10.1% rise in 2026 earnings estimates [16][17] - **Rush Street Interactive (RSI)**: Achieved record revenues with a 20% year-over-year increase, supported by a 46% surge in North American online casino monthly active users, and a 38.3% share price increase [20][21] - **Brightstar Lottery (BRSL)**: Strengthened its balance sheet post-IGT Gaming divestiture, with a 5% increase in 2026 earnings estimates despite a 19.9% decline in share price over the past year [24]

Core Viewpoint - MGM Resorts International has shown resilience despite challenges in the Las Vegas tourism sector, with potential for a strong performance in 2026 [1][2]. Financial Performance - For the nine-month period ending September 30, 2025, MGM reported essentially zero revenue growth compared to the same period in 2024, reflecting weak results from Las Vegas Strip operations [5]. - The company experienced a 4.9% drop in adjusted EBITDA for the same nine-month period, while Caesars Entertainment reported a 4.2% decline [6]. Market Position - MGM's stock has underperformed compared to the S&P 500, but it is currently up 2.57% year-to-date [2]. - MGM trades at a forward P/E ratio of 15, significantly lower than Caesars' 29, indicating potential for valuation expansion [8]. Future Outlook - Analysts have a wide range of earnings forecasts for MGM in 2026, with estimates ranging from $0.30 to $3.31 per share [8]. - Positive developments, such as improved Las Vegas Strip results and growth in BetMGM and MGM China, could drive a rebound in stock valuation [9][10].

Core Insights - MGM Resorts International has remained profitable, but long-term investors have not seen favorable returns compared to the S&P 500 [1] - Over the past one, three, and five years, MGM Resorts has significantly underperformed the S&P 500, suggesting that investors would have been better off with an index fund [2][5] - Despite past underperformance, there may still be potential for MGM Resorts to outperform in the future [3][7] Performance Comparison - MGM Resorts' performance over different timeframes compared to the S&P 500: - 1 Year: MGM -17.4%, S&P 500 +13.9% (Difference: -31.3 percentage points) [5] - 3 Years: MGM -15.3%, S&P 500 +72.4% (Difference: -87.7 percentage points) [5] - 5 Years: MGM +17.4%, S&P 500 +83.8% (Difference: -66.4 percentage points) [7] - The lack of dividends since 2022 exacerbates the total return difference when compared to the S&P 500 [5] Factors Behind Underperformance - Initial excitement around BetMGM, the online casino and sportsbook joint venture, drove stock prices up during the pandemic despite poor performance in land-based casinos [6] - As the market recognized that online gaming companies were far from profitability, enthusiasm waned, leading to a decline in MGM's stock price from 2022 onward [8] Recent Developments - MGM Resorts' revenue returned to pre-pandemic levels in 2022, aided by "revenge travel" trends, but concerns about future prospects have emerged for 2024 [9]

Core Insights - MGM Resorts International reported third-quarter 2025 results with earnings missing estimates but revenues slightly exceeding expectations, leading to a 3.8% decline in shares after hours [1][4][8] Financial Performance - Earnings per share (EPS) for the quarter was 24 cents, below the Zacks Consensus Estimate of 37 cents, and down from 54 cents in the prior-year quarter [4][8] - Quarterly revenues reached $4.25 billion, surpassing the consensus mark of $4.22 billion by 0.8%, and increased by 1.6% year over year [4][8] - Consolidated adjusted EBITDA decreased by 12% year over year to $505.8 million [5] Segment Performance - MGM China's net revenues rose 17% year over year to $1.1 billion, driven by higher casino revenues, which increased by 18% to $947 million [6][7] - Adjusted property EBITDAR for MGM China was $284 million, up from $237.4 million in the prior-year quarter [7] - Domestic operations on the Las Vegas Strip saw net revenues of $2 billion, down 7% year over year due to room remodels and declines in RevPAR, table games win percentage, and food and beverage revenues [9][10] - Regional Operations reported net revenues of $956.9 million, slightly up from $952.1 million in the prior-year quarter, with adjusted property EBITDAR at approximately $295.5 million [10] - MGM Digital's net revenues increased to $174 million from $141.2 million in the prior-year quarter, although adjusted property EBITDAR loss was approximately $23.2 million [11] Strategic Developments - The company's performance was supported by portfolio diversification, strategic partnerships, and strong contributions from the BetMGM venture and regional operations [2] - MGM Resorts remains optimistic about future growth opportunities in Brazil and Dubai despite challenges in Las Vegas [3] - The company took a loan of $300 million at an interest rate of approximately 2.5% to support the MGM Osaka project [13] Balance Sheet - MGM Resorts ended the quarter with cash and cash equivalents of $2.13 billion, down from $2.42 billion at the end of 2024, while long-term debt decreased to $6.16 billion from $6.36 billion [12]

Financial Data and Key Metrics Changes - MGM Resorts reported a consolidated net revenue growth this quarter, despite challenges in Las Vegas, indicating the benefits of geographic and channel diversity [5][6] - The Las Vegas segment reported $601 million in EBITDA, down $130 million year over year, attributed to decreased business interruption proceeds and operational impacts [12][13] - Net revenue in Las Vegas declined by 7%, while expenses were managed down accordingly, including a 7% decrease in full-time employees [14] Business Line Data and Key Metrics Changes - Regional operations achieved record total revenue and EBITDA, with Borgata posting all-time high table games drop and slot win [9][15] - MGM China achieved record Q3 EBITDA despite a $12 million impact from a typhoon, ending the quarter with a market share of 15.5% [15] - MGM Digital reported a revenue growth of 23% during the quarter, although segment EBITDA was a loss of $23 million due to increased investment in Brazil [16] Market Data and Key Metrics Changes - Las Vegas is expected to receive over 40 million visitors in 2025, with signs of stabilization in the luxury market segment [7][8] - In Macau, visitation increased by 11% during the Golden Week holiday period, with total win up 20% [15] - The BetMGM North American venture reported outstanding results and is expected to begin distributing cash back to MGM Resorts [15][20] Company Strategy and Development Direction - The company remains focused on premium, market-leading integrated resort operations and optimizing its portfolio for value opportunities [5][4] - MGM is committed to diversifying its business, with significant investments in Japan and digital channels, aiming for a high teens return upon opening [11][12] - The company is also exploring share buybacks as a means to enhance shareholder value, given the current undervaluation of its stock [18][50] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the fourth quarter and 2026, citing strong group demand and improvements in room rates [14][23] - The company acknowledged challenges in the Las Vegas market but emphasized proactive measures to enhance customer experience and value [6][42] - Management highlighted the importance of maintaining high standards in the gaming industry and the need for continued investment in customer understanding [21][62] Other Important Information - The company announced the sale of Northfield Park for $546 million, reflecting a significant premium to MGM's current share price [5][18] - A $300 million yen-denominated credit facility was entered to support funding commitments for MGM Osaka [12] - The retirement of COO Corey Sanders was acknowledged, marking a significant transition for the company [21][22] Q&A Session Summary Question: Decision to exit New York - Management explained that the decision was influenced by high tax hurdles and competitive pressures, leading to a reassessment of capital allocation [24][25] Question: Return hurdles for investment - Current return thresholds are high due to the share price, with a focus on projects like Japan that have favorable supply-demand dynamics [26] Question: Digital growth and investment balance - Digital investments are currently cash generative, with a focus on growing existing businesses rather than pursuing inorganic growth [31] Question: Las Vegas stabilization outlook - Management indicated sequential improvement in Las Vegas, with expectations for better performance in Q4 driven by group demand [33] Question: Strategy in Macau amidst competition - MGM China focuses on quality products and customer understanding to maintain market share, with ongoing CapEx projects to enhance offerings [36][38] Question: Capital projects in Las Vegas - Management confirmed that the disruption from renovations is expected to ease, leading to improved ADR and occupancy over time [78] Question: Outlook for 2026 group events - The company anticipates a strong convention mix in the first half of 2026, which will support room occupancy and rate increases [70]

Core Viewpoint - MGM Resorts International is set to report its third-quarter 2025 results on October 29, with expectations of a decline in earnings per share (EPS) compared to the previous year, despite a slight revenue increase [1][2][8]. Estimate Revision - The Zacks Consensus Estimate for third-quarter EPS has decreased to 37 cents from 41 cents, reflecting a 31.5% decline from 54 cents in the same quarter last year [2]. - Revenue estimates are pegged at approximately $4.2 billion, indicating a 0.8% increase from the prior-year quarter [2]. Factors Influencing Quarterly Results - MGM's performance is expected to benefit from strong international and digital segments, with MGM China being a key growth driver, projected to generate $1.06 billion in revenues compared to $929.5 million in the prior-year quarter [3][4]. - The digital segment, particularly BetMGM, is anticipated to enhance top-line performance through profitable player acquisition and operational efficiency [4]. - Regional operations are expected to maintain strong cash generation, with revenue estimates at $953.7 million, slightly up from $952.1 million in the previous year [5]. Challenges Impacting Profitability - Ongoing room renovations at MGM Grand and softer midweek trends at value-oriented resorts may negatively impact profitability [6]. - Increased marketing and integration expenses related to MGM Digital's global expansion, along with elevated pre-opening costs, could pressure margins [6]. Earnings Prediction Model - The current model does not predict an earnings beat for MGM, as it lacks a positive Earnings ESP despite having a +6.92% Earnings ESP [7][9].

Core Viewpoint - MGM Resorts International's unexpected decision to withdraw from the New York City casino license competition may present long-term benefits for investors, allowing the company to redirect significant financial resources [1][5]. Financial Implications - The company was prepared to invest $2.3 billion in revamping Empire City Casino if awarded a license, with each license expected to cost $500 million [5][6]. - By not pursuing the New York license, MGM is estimated to save at least $2.8 billion, which could be utilized for debt reduction or share buybacks [7]. Market Context - Analysts had previously viewed New York as a major opportunity for the casino industry, with potential revenues surpassing those of Las Vegas [4][9]. - Despite the allure of the New York market, MGM has other growth avenues, including the $10.24 billion MGM Osaka integrated resort, where it is responsible for about one-third of the increased costs [10]. Strategic Growth Opportunities - MGM is also exploring opportunities in Dubai, where it has a non-gaming hotel and is positioned to capitalize on potential future gaming licenses [11][12]. - Interest in Thailand as a potential casino market is noted, contingent on legislative approval [12]. Investor Perspective - Investors who anticipated a positive impact from the New York license may feel disappointed, but the current situation could provide a chance to reassess MGM's value based on other growth initiatives and capital deployment strategies [13].

Core Insights - BetMGM, co-owned by Entain plc and MGM Resorts International, reported a strong third-quarter 2025 business update and raised its full-year guidance, leading to a 2.8% increase in MGM's shares during trading hours and an additional 0.2% in after-hours trading [2][4] Financial Performance - BetMGM's net revenues for Q3 reached $667 million, marking a 23% year-over-year increase, with iGaming revenues growing by 21% and Online Sports revenues by 36% [3][8] - Adjusted EBITDA for BetMGM was $41 million, a significant turnaround of $57 million compared to the same period last year [3][4] Growth Outlook - MGM now anticipates full-year net revenues of at least $2.75 billion, an increase from the previous estimate of $2.7 billion, and expects EBITDA to be approximately $200 million, up from $150 million [4][8] - The growth momentum is supported by a diversified portfolio including Las Vegas Strip resorts, regional operations, MGM China, and MGM Digital, with near-term catalysts in BetMGM and Las Vegas operations [5] User Engagement and Platform Enhancements - BetMGM reported strong growth in monthly active users and player engagement, focusing on targeted player acquisition and retention of high-value players, aided by recent platform enhancements [6][8] Market Position and Share Performance - MGM's shares have increased by 14.5% over the past six months, compared to a 34.5% growth in the Zacks Gaming industry, indicating a solid position for sustainable earnings growth in the global hospitality and gaming sector [7]

Core Insights - MGM Resorts is beginning to see positive financial impacts from its online gaming operations, specifically through its subsidiary BetMGM [1] Financial Performance - BetMGM announced it will distribute $200 million to its owners, MGM Resorts and Entain, from the cash generated by its online gaming business, marking a significant turnaround from previous losses [1]

Core Insights - Corey Sanders, the Chief Operating Officer of MGM Resorts International, will retire after over 30 years of service, remaining in the role until December 31, 2025, and serving as an advisor until December 31, 2026 [1][2] - Bill Hornbuckle, President & CEO of MGM Resorts, highlighted Sanders' significant contributions to the company, including leadership during key acquisitions and property expansions, and emphasized his impact on company culture and employee relations [2] Company Overview - MGM Resorts International is a global gaming and entertainment company listed on the S&P 500, featuring a portfolio of 31 hotel and gaming destinations worldwide, including renowned resort brands [3] - The company operates BetMGM, a joint venture offering sports betting and online gaming in North America, and is expanding its presence in Asia with a resort development in Japan [3] - MGM Resorts is committed to sustainability and community impact, recognized as one of FORTUNE® Magazine's World's Most Admired Companies [3]