Gambling in the USA
MGM RESORTS INTERNATIONAL REPORTS SECOND QUARTER 2021 FINANCIAL AND OPERATING RESULTS
MGM Resorts International reported financial results for the quarter ended June 30, 2021.
“We delivered a strong second quarter, driven by robust demand and productivity efforts across our domestic portfolio. Our Las Vegas Strip and Regional Operations Adjusted Property EBITDAR margins reached all-time records and our Regional Operations also delivered an all-time quarterly record in Adjusted Property EBITDAR. Our U.S. sports betting and iGaming venture, BetMGM, continues to outperform as the number two operator nationwide,” said Bill Hornbuckle, Chief Executive Officer and President of MGM Resorts International. “We also recently announced several strategic transactions that furthered our goal of becoming a more streamlined, focused organization with stronger liquidity. We continued to advance that goal today with our announced agreement with VICI and MGM Growth Properties to monetize our MGP Operating Partnership units for $4.4 billion in cash. I’m grateful for the tremendous work that our MGM Resorts teams continue to put into positioning this Company for future growth and success.”
“Our robust liquidity position provides us with significant flexibility as our business continues to improve and stabilize. As such, we have returned capital to shareholders through share repurchases during the second quarter and expect to remain programmatic in our approach through the rest of the year,” said Jonathan Halkyard, Chief Financial Officer and Treasurer of MGM Resorts. “As we navigate future uses of our capital, we will remain disciplined in maintaining a strong balance sheet, pursuing targeted growth opportunities and returning cash to shareholders.”
Second Quarter 2021 Financial Highlights:
Consolidated Results
- Consolidated net revenues of $2.3 billion, an increase of 683% compared to the prior year quarter. While the current quarter benefited from the easing of operational and capacity restrictions and an increase in travel, the prior year quarter was negatively affected by temporary closures at our properties due to the COVID-19 pandemic;
- Consolidated operating income was $264 million compared to consolidated operating loss of $1.0 billion in the prior year quarter;
- Net income attributable to MGM Resorts of $105 million compared to net loss attributable to MGM Resorts of $857 million in the prior year quarter;
- Diluted earnings per share of $0.14 in the current quarter compared to diluted loss per share of $1.67 in the prior year quarter;
- Adjusted diluted earnings per share (“Adjusted EPS”)(1)Â was a loss per share of $0.13 in the current quarter compared to an Adjusted EPS loss per share of $1.52 in the prior year quarter; and
- Consolidated Adjusted EBITDAR(2)Â of $617 million in the current quarter.
Financial Position   & Liquidity
- Cash and cash equivalents balance as of June 30, 2021 was $5.6 billion, which included $298 million at the MGP Operating Partnership and $331 million at MGM China;
- Total liquidity at June 30, 2021 was $9.9 billion, which included $1.6 billion at the MGP Operating Partnership and $1.8 billion at MGM China, which was comprised of cash and cash equivalents and capacity under the revolving credit facilities at the Company, MGP Operating Partnership and MGM China; and
- At June 30, 2021, principal amount of indebtedness was $12.7 billion, including $4.2 billion at the MGP Operating Partnership and $3.0 billion at MGM China.
Las Vegas Strip Resorts
- Net revenues of $1.0 billion, an increase of 566% compared to the prior year quarter and a decrease of 31% compared to the second quarter of 2019. While the current quarter benefited from the easing of operational and capacity restrictions and an increase in travel, the prior year quarter was negatively affected by temporary property closures;
- Table Games Hold Adjusted Las Vegas Strip Resorts Net Revenues(3)Â of $1 billion, an increase of 613% compared to the prior year quarter and a decrease of 32% compared to the second quarter of 2019;
- Adjusted Property EBITDAR(2) Â of $397 million compared to a loss of $104 million in the prior year quarter, and a decrease of 5% compared to the second quarter of 2019;
- Adjusted Property EBITDAR margin(2)Â of 39.5% in the current quarter, an increase of 1,097 basis points compared to the second quarter of 2019 due primarily to realized benefits of the Company’s cost savings initiatives; and
- Table Games Hold Adjusted Las Vegas Strip Resorts Adjusted Property EBITDAR(2)Â of $403 million compared to a loss of $112 million in the prior year quarter, and a decrease of 6% compared to the second quarter of 2019.
Regional Operations
- Net revenues of $856 million, an increase of 859% compared to the prior year quarter and a decrease of 6% compared to the second quarter of 2019. While the current quarter benefited from the easing of operational and capacity restrictions and an increase in travel, the prior year quarter was negatively affected by temporary property closures;
- Adjusted Property EBITDAR of $318 million compared to a loss of $112 million in the prior year quarter, and an increase of 22% compared to the second quarter of 2019; and
- Adjusted Property EBITDAR margin of 37% in the current quarter, an increase of 855 basis points compared to the second quarter of 2019 due primarily to realized benefits of the Company’s costs savings initiatives.
MGM China
- Net revenues of  $311 million, an increase of 836% compared to the prior year quarter and a decrease of 56% compared to the second quarter of 2019. The prior year quarter was more significantly impacted by travel and entry restrictions in Macau as well as other operational restrictions related to the pandemic than in the current quarter;
- VIP Table Games Hold Adjusted MGM China Net Revenues(3)Â of $317 million, an increase of 895% compared to the prior year quarter and a decrease of 57% compared to the second quarter of 2019;
- Adjusted Property EBITDAR of $9 million compared to a loss of $116 million in the prior year quarter, and a decrease of 95% compared to the second quarter of 2019; and
- VIP Table Games Hold Adjusted MGM China Adjusted Property EBITDAR(2)Â of $13 million compared to a loss of $118 million in the prior year quarter, and a decrease of 93% compared to the second quarter of 2019.
Recent Developments
In August 2021, the Company entered into an agreement with VICI Properties, Inc. (“VICI”) and MGP whereby VICI will acquire MGP. Pursuant to the agreement, MGP Class A shareholders will receive 1.366x shares of newly issued VICI stock in exchange for each Class A share of MGP. The fixed exchange ratio represents an agreed upon price of $43 per share of MGP Class A share to the five-day volume weighted average price of VICI stock as of the close of business on July 30, 2021. A majority of the Company’s Operating Partnership units will be redeemed for $43 per unit, for cash consideration of approximately $4.4 billion, and the Company will retain an approximate $370 million ownership interest in the VICI operating partnership. As part of the transaction, the Company will enter into an amended and restated master lease with VICI. The new master lease will have an initial term of 25 years, with three ten-year renewals, and initial annual rent of $860 million, escalating at a rate of 2.0% per annum for the first 10 years and thereafter at the greater of 2.0% per annum or the consumer price index, subject to a 3.0% cap. The other terms are largely consistent with the existing master lease. The transaction is expected to close in the first half of 2022, subject to regulatory approvals and approval by VICI stockholders.
In June 2021, the Company entered into an agreement pursuant to which the Company will purchase the 50% ownership interest in CityCenter held by Infinity World Development Corp for cash consideration of $2.125 billion. The transaction is expected to close in the third quarter of 2021, subject to certain closing conditions. Upon close of the transaction, the Company will own 100% of CityCenter and, accordingly, will consolidate CityCenter in its financial statements. The Company also entered into an agreement pursuant to which a fund managed by Blackstone Group Inc. will acquire the real estate assets of Aria and Vdara from the Company for cash consideration of $3.89 billion and lease it back to a subsidiary of the Company pursuant to a lease agreement. The Aria and Vdara lease will have an initial term of 30 years and initial annual base cash rent of $215 million. The transaction is expected to close in the third quarter of 2021, subject to certain closing conditions, which include the requisite closing of the equity interest purchase of CityCenter, discussed above.
In May 2021, the Company entered into an agreement with MGP whereby MGP will acquire the real estate assets of MGM Springfield from the Company for $400 million of cash consideration. MGM Springfield will be added to the master lease between the Company and MGP. Following the closing of the transaction, the annual rent payment to MGP will increase by $30 million. The transaction is expected to close in the fourth quarter of 2021, upon receipt of interim regulatory approvals from the Massachusetts Gaming Commission and the satisfaction of other customary closing conditions.
Adjusted Diluted Earnings Per Share
The following table reconciles diluted earnings (loss) per share (“EPS”) to Adjusted EPS (approximate EPS impact shown, per share; positive adjustments represent charges to income):
|
Three Months Ended June 30, |
2021 |
2020 |
||||||||
|
Diluted earnings (loss) per share |
$ |
0.14 |
$ |
(1.67) |
||||||
|
Property transactions, net |
(0.06) |
0.05 |
||||||||
|
October 1 litigation settlement |
â |
0.10 |
||||||||
|
Restructuring |
â |
0.04 |
||||||||
|
Non-operating items: |
||||||||||
|
Gain related to equity instrument |
(0.17) |
â |
||||||||
|
Change in fair value of MGP swaps |
0.01 |
â |
||||||||
|
Unconsolidated affiliate items: |
||||||||||
|
Gain related to sale of Harmon land |
(0.10) |
â |
||||||||
|
Income tax impact on net income adjustments (1) |
0.05 |
(0.04) |
||||||||
|
Adjusted diluted loss per share |
$ |
(0.13) |
$ |
(1.52) |
||||||
|
(1) |
The income tax impact includes current and deferred income tax expense based upon the nature of the adjustment and the jurisdiction in which it occurs. |
Las Vegas Strip Resorts
Casino revenue was $353 million for the second quarter of 2021 compared to $63 million in the prior year quarter, an increase of 461%, due primarily to the impact of COVID-19 in the prior year period.
The following table shows key gaming statistics for Las Vegas Strip Resorts:
|
Three Months Ended June 30, |
2021 |
2020 |
||||
|
(Dollars in millions) |
||||||
|
Table Games Drop |
$ |
777 |
$ |
149 |
||
|
Table Games Win |
$ |
173 |
$ |
48 |
||
|
Table Games Win % |
22.3% |
32.5% |
||||
|
Slots Handle |
$ |
3,641 |
$ |
524 |
||
|
Slots Win |
$ |
351 |
$ |
49 |
||
|
Slots Win % |
9.6% |
9.3% |
||||
Rooms revenue was $299 million for the second quarter of 2021 compared to $26 million in the prior year quarter, an increase of 1,044% due primarily to an increase in REVPAR(4)Â as a result of increased occupancy at our properties due to the easing of capacity restrictions and increased travel in the current quarter.
The following table shows key hotel statistics for Las Vegas Strip Resorts:
|
Three Months Ended June 30, |
2021 |
2020 |
||||
|
Occupancy %(1) |
77% |
43% |
||||
|
Average Daily Rate (ADR) |
$ |
149 |
$ |
154 |
||
|
Revenue per Available Room (REVPAR)(1) |
$ |
115 |
$ |
66 |
||
|
(1) |
Rooms that were out of service during the three months ended June 30, 2020 due to the COVID-19 pandemic were excluded from the available room count when calculating hotel occupancy and REVPAR. |
Regional Operations
Casino revenue was $708 million compared to $77 million in the prior year quarter, an increase of 817% due primarily to the impact of COVID-19 in the prior year period.
The following table shows key gaming statistics for Regional Operations:
|
Three Months Ended June 30, |
2021 |
2020 |
||||
|
(Dollars in millions) |
||||||
|
Table Games Drop |
$ |
972 |
$ |
58 |
||
|
Table Games Win |
$ |
203 |
$ |
13 |
||
|
Table Games Win % |
20.9% |
21.9% |
||||
|
Slots Handle |
$ |
6,514 |
$ |
485 |
||
|
Slots Win |
$ |
622 |
$ |
48 |
||
|
Slots Win % |
9.6% |
10.0% |
||||
MGM China
Key second quarter results for MGM China include:
- Net revenues of  $311 million, an increase of 836% compared to the prior year quarter and a decrease of 56% compared to the second quarter of 2019;
- Main floor table games win of $252 million compared to $12 million, an increase of 2,093% compared to the prior year quarter;
- VIP table games win of $71 million compared to $12 million, an increase of 505% compared to the prior year quarter; and
- Adjusted Property EBITDAR of $9 million compared to a loss of $116 million in the prior year quarter. License fee expense was $5 million in the current quarter and $1 million in the prior year quarter.
The following table shows key gaming statistics for MGM China:
|
Three Months Ended June 30, |
2021 |
2020 |
||||
|
(Dollars in millions) |
||||||
|
VIP Table Games Turnover |
$ |
2,590 |
$ |
450 |
||
|
VIP Table Games Win |
$ |
71 |
$ |
12 |
||
|
VIP Table Games Win % |
2.7% |
2.6% |
||||
|
Main Floor Table Games Drop |
$ |
1,258 |
$ |
66 |
||
|
Main floor Table Games Win |
$ |
252 |
$ |
12 |
||
|
Main Floor Table Games Win % |
20.1% |
17.5% |
||||
Corporate Expense
Corporate expense, including share-based compensation for corporate employees, decreased to $97 million in the second quarter of 2021, from $143 million in the prior year quarter. The current quarter included $6 million in transaction costs, while the prior year quarter included $49 million in October 1 litigation settlement expense, $5 million in restructuring costs, and $9 million in corporate initiative costs.
Unconsolidated Affiliates
The following table summarizes information related to the Company’s share of operating income (loss) from unconsolidated affiliates:
|
Three Months Ended June 30, |
2021 |
2020 |
||||||
|
(In thousands) |
||||||||
|
CityCenter |
$ |
90,212 |
$ |
(39,113) |
||||
|
MGP BREIT Venture |
38,954 |
38,861 |
||||||
|
BetMGM |
(45,979) |
(5,241) |
||||||
|
Other |
151 |
(2,860) |
||||||
|
$ |
83,338 |
$ |
(8,353) |
|||||
On June 8, 2021, CityCenter Holdings, LLC (“CityCenter”) closed the sale of its Harmon land for $80 million on which it recorded a $30 million gain. MGM Resorts recorded a $50 million gain, which included $15 million representing its 50% share of the gain recorded by CityCenter and $35 million representing the reversal of certain basis differences.
For the three months ended June 30, 2021, CityCenter’s net income was $79 million and Adjusted EBITDA(5) was $120 million compared to net loss of  $112 million and Adjusted EBITDA loss of $37 million in the prior year quarter. While the current quarter benefited from the easing of operational and capacity restrictions and an increase in travel, the prior year quarter was negatively affected by temporary property closures.
MGM Growth Properties
During the second quarter of 2021, the Company made rent payments to MGM Growth Properties Operating Partnership LP (“MGP Operating Partnership”) in the amount of $211 million and received distributions of $55 million from the MGP Operating Partnership. In June 2021, the Board of Directors of MGM Growth Properties LLC (“MGP”) approved a quarterly dividend of $0.5150 per Class A share which represents a dividend of $2.06 per share on an annualized basis totaling $81 million, which was paid on July 15, 2021 to holders of record on June 30, 2021. The Company concurrently received a $57 million distribution attributable to its ownership of MGP Operating Partnership units.
MGM Resorts Dividend and Share Repurchases
On August 4, 2021, the Company’s Board of Directors approved a quarterly dividend of $0.0025 per share. The dividend will be payable on September 15, 2021 to holders of record on September 10, 2021.
During the second quarter of 2021, the Company repurchased approximately 5.6 million shares of its common stock at an average price of $39.48 per share for an aggregate amount of $220 million, pursuant to the February 2020 $3.0 billion stock repurchase plan. The remaining availability under the February 2020 $3.0 billion stock repurchase program was $2.7 billion as of June 30, 2021. All shares repurchased under the Company’s program have been retired.
Gambling in the USA
Snoqualmie Casino Announces Exciting Rebranding to Snoqualmie Casino & Hotel Ahead of Major Expansion
Snoqualmie Casino has announced its rebranding to Snoqualmie Casino & Hotel, reflecting an exciting new chapter in the venueâs history as it embarks on a much-anticipated expansion. Set for completion in mid-2025, this project promises to elevate the guest experience, making Snoqualmie Casino & Hotel a premier destination for entertainment, relaxation, and culinary excellence.
The cornerstone of the expansion is the construction of a luxurious hotel, which will offer guests unparalleled comfort and stunning views of the Snoqualmie Valley and Mount Si. With a focus on sustainability and modern design, the hotel will feature upscale accommodations, a full-service destination spa, and amenities that cater to both leisure and business travelers. Plus, there are architectural details inspired by Snoqualmie culture from a modern slant roof hotel design representing the original longhouses of the Snoqualmie Tribeâs ancestors to carefully chosen artwork placed throughout for guests to enjoy.
Snoqualmie Casino & Hotelâs destination spa will offer an immersive escape that blends relaxation with the healing power of nature. Nestled in the serene landscapes of the Pacific Northwest, the spa provides a range of rejuvenating treatments. Experience the perfect blend of wellness and nature where luxury, tradition and innovation come together for an incredibly transformative experience.
âIt is my honor and privilege to announce that Snoqualmie Casino has now become Snoqualmie Casino and Hotel. Over the past three years, the Snoqualmie Tribe and Casino have been diligently working to bring a one-of-a-kind, world-class hotel to the Snoqualmie Valley,â said Interim CEO Mary Lou Patterson.
In addition, Snoqualmie Casino & Hotel will expand its gaming floor, introducing an array of new options to enhance the entertainment experience for guests. This expansion will include the latest slots, electronic and traditional table games, as well as a dedicated high-limit gaming area for discerning players seeking a more exclusive gaming experience.
One of the highlights of the expansion is the development of a state-of-the-art 2000-seat entertainment and convention center. This versatile venue will host a variety of events, from concerts to conferences, positioning Snoqualmie Casino & Hotel as a key player in the regionâs entertainment landscape. With cutting-edge technology and a focus on guest comfort, the center will attract top-tier talent and events, making it a must-visit destination.
In addition to the award-winning Vista Prime Steaks & Seafood, 12 Moons, and Falls Buffet, a new sports bar and grill will be introduced to provide patrons with the ultimate game day experience. Other new dining options, set to open later, will showcase local ingredients and flavors, ensuring a memorable culinary experience for guests.
Snoqualmie Casino & Hotel recently launched a brand-new valet garage. The dual level indoor and outdoor structure, with 600 additional spaces, doubles the previous capacity for valet parking creating easier access into the casino. This is the first piece of new development at Snoqualmie Casino & Hotel that has opened for immediate use. The entire project anticipates creating numerous job opportunities for local residents, contributing to the economic growth of the Snoqualmie area.
Wind Creek Chicago Southland has announced that it will open to the public on November 11. The state-of-the-art casino represents the first step toward delivering a full-scale integrated resort experience, scheduled for completion in spring 2025.
Spanning an impressive 70,000 square feet, Wind Creek Chicago Southland features over 1400 slot machines, 56 table games, high-limit slot areas, a high-limit table games salon, a poker room, a dynamic sportsbook, and 4 âHidden Gemsâ throughout the casino floorâoffering visitors a unique and customizable private gaming and event microenvironment. Designed with an emphasis on curated entertainment spaces, this new offering aims to redefine leisure and hospitality for the entire region.
âThe opening of Wind Creek Chicago Southland underscores our dedication to making a positive economic impact in the communities we serve. Weâre committed to create opportunities that support the region, offer competitive benefits for Team Members, and further strengthen the vibrant Southland community,â said Jay Dorris, President and CEO of Wind Creek Hospitality.
Wind Creek Chicago Southland is expected to create more than 1000 full-time jobs in fields ranging from hospitality to technology. Roles will include security, gaming attendants, food service, IT technicians, and environmental services, reinforcing Wind Creekâs commitment to strengthening the local economy. Additionally, Homewood and East Hazel Crest will benefit from gambling revenue, along with 42 other south suburban communitiesâfunding essential local services within the immediate and surrounding communities.
âWind Creek Chicago Southland is more than a casinoâitâs a community-driven destination. The Tribe and Wind Creek will continue to prioritize the Villages of Homewood and East Hazel Crest as we are committed to uplifting our neighbors,â said Stephanie Bryan, Tribal Chair and CEO, Poarch Creek Indians.
On Nov. 6th and Nov. 7th, the Illinois Gaming Board visited the casino for two mandatory test days, which also included an extended invitation to family friends and local dignitaries. Wind Creek Hospitality received notice of approval on Nov. 8th to operate on Monday, Nov. 11th at approximately 11:00 a.m.
The Nov. 11th opening marks only the beginning of what will become a flagship destination. High-limit gaming rooms, a hotel, spa, poker room, a sportsbook and more will be available for Guests seeking diverse experiences. Wind Creekâs partnership with Fabio Viviani Hospitality Group will also introduce an exceptional range of signature restaurants and food & beverage offerings to the highly anticipated property.
âWhether youâre looking for elevated dining, quick-service eateries, or something in betweenâyou wonât be disappointed as weâre creating something truly unforgettable,â said Fabio Viviani.
âFrom the start, our mission has been to create jobs, spur economic growth, and offer the ultimate entertainment escape. Weâre thrilled to welcome our Guests on Nov. 11th to experience the excitement firsthand,â said Roger Kuehn, EVP and General Manager of Wind Creek Chicago Southland.
Gambling in the USA
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