In further proof that the world’s gambling axis is moving, incontrovertibly, from bricks-and-mortar to iGaming, US betting and entertainment giant MGM Resorts has reported a US$1.03bn (£744m/€849m) loss for 2020, with its overall revenue plummeting by 60 per cent.
The negative posting further explains the strategy behind MGM’s bid to buy the UK’s FTSE 100-listed masters-of-online, the Entain Group in an all-share US$11bn (£7.94bn/€9.07bn) deal in January, which was rejected.
In the new normal Covid-19 marketplace of lockdown and non-contact protocols, MGM need “to change it up” and move fast if they are to remain a dominant international gambling power.
MGM Resorts CEO and President Bill Hornbuckle has conceded as much by revealing, according to reliable sources, that he is “entertaining” a renewed bid for Entain — when British law allows (six months after a lapsed bid).
Over half of MGM’s US$5.16bn (£3.72bn/€4.25bn) 2020 handle, some US$2.87bn (£2.07bn/€2.36bn), came from its traditional casino operations.
But everything was down: Overall casino earning were down 54.9 per cent; income from Rooms, Food and Beverage, Entertainment, Retail and Other(s), were all down by over 60 per cent each.
Revenue from MGM’s key resorts on the Las Vegas Strip also fell 61.5 per cent, to US$2.25bn (£1.62bn/€1.85bn) and its regional US market, while a tad stronger, still fell 44.6 per cent to US$1.97bn (£1.42bn/€1.62bn).
Meanwhile, MGM’s operations in Macau, hit by draconian Chinese government anti-virus travel restrictions, saw revenue plummet by over 77 per cent – in common with all gambling businesses in the enclave.
Perhaps the only positive from the year was MGM’s online business with Entain.
Revenue for the BetMGM-Entain joint venture was US$178m (£128.58m/€146.85m) – well up on its initial mooting of US$130m (£93.90m/€107.25m).
MGM’s final net loss, as reported above, was US$1.03bn — way down on its US$2.05bn (£1.48bn/€1.69bn) profit in 2019.
Nevertheless, Hornbuckle remains upbeat.
“We remain confident in the long-term recovery of our business,” affirmed the MGM Resorts International boss.
“We have strengthened our operational foundation through cost efficiencies that position us for sustainable growth, as solutions to the public health crisis accelerate and restrictions continue to ease.”
Both the BetMGM-Entain joint venture—and iGaming expansion–was mooted as key to the bounce back.
The US sportsbook and virtual vertical “gained significant market share throughout 2020, while successfully launching in seven new states,” stressed Hornbuckle.
“We expect to be in 20 markets by the end of the year, and are very pleased with the January launches in Iowa, Michigan, and Virginia.”
And using language, which has clearly sent a flutter through the market and stirred industry watchers, Hornbuckle underlined that iGaming is the market target.
“It is MGM’s intent to play in this space on a substantive and significant level on a global basis,” he said.
The UK’s Entain–formerly GVC Holdings, of Party Poker, Bwin and Sportingbet online fame, and owners of the iconic Ladbrokes and Coral brands–must be bracing itself for a hot July. Very hot indeed.