MGM Resorts International (NYSE:MGM) stands poised to reap rewards from promising sports betting and iGaming prospects, as well as its strategic partnerships and expansion endeavors. The company’s robust performance in the Macau business sector also adds to its positive outlook.
MGM Resorts shares have demonstrated an impressive ascent of 24.3% over the previous year, outpacing the broader industry’s growth of 16.7%. Bolstering this price trajectory is a history of solid earnings surprises. MGM Resorts has exceeded the Zacks Consensus Estimate for earnings in three of the last four quarters. Over the past 60 days, earnings projections for both 2023 and 2024 have witnessed upward revisions of 19.3% and 21.7%, respectively. This upward trend reflects bullish sentiment among analysts and justifies its coveted Zacks Rank #1 (Strong Buy). Such a rank underscores the company’s robust fundamentals and forecasts of outperformance in the immediate future.
Catalysts for Continued Growth
The company’s growth is significantly propelled by the expanding sports betting and iGaming sector. In the first half of 2023, BetMGM recorded a remarkable $944 million in net revenues from operations, marking a substantial 55% surge compared to the previous year’s figures. With favorable market momentum and its unmatched range of online and offline offerings, MGM Resorts remains on course to achieve its long-term growth target, with revenue expectations ranging from $1.8 billion to $2 billion for 2023. The company is also optimistic about achieving positive EBITDA in the latter half of the same year. Confidence is high in the upgraded design and functionality of the BetMGM app launch (incorporating a single wallet) as well as the omnichannel growth prospects.
MGM is actively implementing a single account, single wallet system, bolstering its presence in Las Vegas and its overarching omnichannel strategy. This strategic move is set to enhance acquisition and engagement through the BetMGM app. The feature is planned to roll out across 14 markets, encompassing more than half of its customer base. The acquisition of Angstrom by its partners further amplifies BetMGM’s offerings and pricing tools, with the aim of enhancing customer satisfaction and profit margins.
A significant portion of MGM’s revenue originates from Macau, the world’s largest gaming destination. The company is implementing initiatives to enhance revenues and the productivity of junkets in Macau. In the second quarter of 2023, the Macau segment reported an adjusted property EBITDAR of $209 million, reflecting a substantial 21% increase from the second quarter of 2019, with a healthy 28% margin. Gross gaming revenues also surpassed figures from the same period in 2019, driven by a notable 37% surge in main floor winnings compared to 2019 levels. This momentum is expected to persist, supported by upgrades to the main gaming floor offerings and well-planned marketing strategies.
Recent Developments and International Expansion
MGM Resorts recently unveiled a strategic licensing agreement with Marriott, enabling reciprocal earning and redemption benefits for members of the Marriott Bonvoy and MGM Rewards loyalty programs. This collaboration has paved the way for the MGM Collection within Marriott Bonvoy. Effective from October onwards, this alliance will empower customers to earn and redeem points across 17 MGM resorts and over 8,500 properties within the Marriott Bonvoy network. This initiative enables members to make reservations through both Marriott’s digital platforms and MGM Resorts’ channels, while seamlessly linking their respective loyalty accounts. This agreement serves as an extension of the perks for loyalty members of both esteemed companies.
The company’s growth strategy is accentuated by its international expansion efforts. MGM Resorts is making notable strides in its development plans in Japan and Dubai, while also focusing on expanding its footprint in New York. Currently navigating the Request for Application (RFA) process, the company anticipates receiving a New York license in the first half of 2024. An investment of over $2 billion into its properties is also in the pipeline, aimed at elevating customer experiences, enhancing services, and fortifying the requisite technology platform and advanced analytics to augment guest engagement. This strategic push is expected to further solidify its market standing in key sectors.
Featured Image: Megapixl © Casimirokt
Author Faith Yakubu 
