MGM Resorts International (MGM) — Q1 2022 Earnings Call Transcript

Good afternoon and welcome to the MGM Resorts International first quarter 2022 earnings call. This call is being broadcast live on the internet at investors.mgmresorts.com. We've also furnished our press release on Form 8-K to the SEC. On this call, we will make forward-looking statements under the Safe Harbor provisions of the federal securities laws. Actual results may differ materially from those contemplated in these statements. Additional information concerning factors that could cause actual results to differ from these forward-looking statements is contained in today's press release and in our periodic filings with the SEC. Except as required by law, we undertake no obligation to update these statements as a result of new information or otherwise. During this call, we will also discuss non-GAAP financial measures in talking about our performance. You can find the reconciliation of the GAAP financial measures in our press release and investor presentation which are available on our website. Finally, this presentation is being recorded. I will now turn it over to Bill Hornbuckle.

Thank you, Andrew and good afternoon and thank you all for joining us today. I'd like to begin today's call by once again thanking our employees at MGM Resorts for their determination, agility, perseverance, and commitment to assets that helped fuel another strong quarter for our company. We were challenged in January by the Omicron variant, but pivoted quickly into recovery mode, leading to multiple all-time EBITDAR records at several of our Las Vegas and digital properties in March. These results showcased the strength of our talented team across the country, our focus on operational efficiency, and the continued strong demand for the services and experience we provide at MGM Resorts. Today, I want to acknowledge and thank our employees again for all that they do every day to take care of our guests and each other. As a company, we remain laser-focused on our strategic plan and our long-term vision: to be the world's premier gaming entertainment company. As a reminder, our strategic plan consists of the following four priorities; investing in our people and our planet; providing unique experiences to our guests by leveraging data-driven customer insights and digital capabilities; delivering operational excellence at every level; and allocating our capital responsibly to yield the highest return for our shareholders. Over the last several quarters, we've discussed the meaningful steps we've taken to simplify our corporate structure and monetize the real estate assets to meaningfully bolster our domestic cash condition. We reached another important milestone in this journey on Friday, April 29th, when we closed the strategic transaction with MGM Growth Properties and Vici. I'd like to thank James Stewart, Andy Chan, and the Board and employees of MGP for all their support and for the great relationship we have built over the years. Our transaction with Vici allowed us to fully deconsolidate MGP from our financial reporting and also netted us approximately $4.4 billion in cash, which we will use to invest in our core business while also continuing to assume meaningful growth opportunities. One such opportunity is our announcement today of the tender for LeoVegas; our success with BetMGM in the United States gives us more conviction than ever about the potential for digital gaming and our ability to grow share in this exciting new marketplace. With this conviction, we are expanding internationally with the team at LeoVegas. Its strong technology platform and pipeline for growth present a compelling opportunity for our business to grow online. We'd like to thank the management team at LeoVegas for their professionalism and support throughout the process, and we look forward to working with that team when the deal closes in the second half of this year. Another opportunity that we're quite excited about is the pursuit of a commercial gaming license in New York. The recently enacted fiscal year 2023 budget includes provisions that will allow the issuance of up to three new licenses in the state. We'd like to thank Governor Hochul and the New York legislature for getting this important issue across the finish line. We're eager to begin the RFA process and share our vision for the future of the property in Yonkers, where if we receive a license, we plan to replace the existing VLTs with slot machines and have table games throughout our existing casino floor and construct new amenities on portions of our 97-acre site. Again, we're excited by this opportunity and look forward to investing in New York to create new jobs and foster economic growth in the region. Turning to our Las Vegas growth strategy, we made solid progress towards our acquisition of operations of The Cosmopolitan of Las Vegas and are on track to close this quarter. The Cosmopolitan is an iconic brand with a loyal and complementary customer base that will further enhance our Las Vegas Strip portfolio. We've met with key leaders at the Cosmopolitan over the last weeks and months, and are impressed by the quality of their team, as well as the culture and the brand that they have built. We look forward to welcoming all the CoStars at the Cosmopolitan to MGM Resorts and adding this existing property to our portfolio. We've also made progress on the sale of the operations of the Mirage to Hard Rock International, which we announced last year. We are working closely with regulators to ensure a smooth transition and expect this transaction to close in the second half of this year. Shifting to our international growth strategy, last week, we submitted our area development plan to the government of Japan with our partners at ORIX and the City of Osaka. This is the final milestone before a license decision will be made, hopefully in October of this year. We continue to work closely with the national government to obtain a license that will hopefully be awarded later this year and bring a fully integrated resort to Japan. In the UAE, we continue to make progress in introducing the MGM brand family to Dubai, where we have a management agreement for an integrated resort being developed in partnership with wasl. The project has broken ground in the development process, and we remain diligent in seeking opportunities to bring the MGM brand to other locales around the world. Turning to BetMGM, we are now live in 23 markets with New York, Illinois, Louisiana, and Puerto Rico launching in the first quarter and Ontario launching in early April. In February, BetMGM commanded a 24% market share in active markets in both US sports betting and iGaming, which puts us in the number one position nationwide. BetMGM is the clear leader in iGaming, having reached a 28% market share in February. The BetMGM management team will be able to provide more color on results and the strategy at their investor meeting on Thursday, May 12. Finally, I'd like to spend a few minutes on our organic growth strategy. On February 1, we relaunched our loyalty program as MGM Rewards with a goal to target high-value non-gaming customers in addition to gaming customers, increase cross-property patronage and tier progression, while enhancing the benefits and further activating BetMGM customers at our properties. We've seen solid results since the launch of MGM Rewards in Q1, particularly as it relates to our omnichannel growth strategy with BetMGM. In the first quarter, 57% of our MGM Rewards enrollments came via BetMGM driven by the Super Bowl, compared to 39% for the full year in 2021. We've committed to our strategy of building loyalty between our different channels and ultimately creating a seamless experience for our customers to play both online and in person. Before I turn this over to Jonathan, I'd like to highlight a few key trends and our future outlook. In Las Vegas, we maintained strong margins in the first quarter, reflecting the sustainable operating lessons implemented from the pandemic. Strong weekend occupancies and ADR were driven by a robust event calendar, and we see that trend continuing into the second quarter. For the mid-week, our occupancy is still behind 2019, but an improving mix of business and a growing group base will allow us to ramp up in the remainder of the year. We continue to expect our convention room nights to reach 90% of 2019 levels in the back half of 2022. Importantly, we are seeing increased spend levels for our groups year-to-date, including catering and banquets, and to spotlight our international leisure trends, we are beginning to see positive indicators of the return of international flight capacity. In fact, by this summer, the LVCVA expects international flight capacity to return to 80% of pre-pandemic levels. Further highlighting events in Las Vegas, we were honored to host the Grammys at MGM Grand Garden. We welcomed the BTS army to our properties for four sold-out shows at Allegiant Stadium. This past weekend, we also hosted the NFL Draft, which activated the entire Las Vegas Strip. We also have big sporting events coming up with the NCAA Men's Basketball Regionals on tap for March of next year, along with the first-of-a-kind Formula 1 Race on the Las Vegas Strip in November of 2023. And, of course, we will host the Super Bowl in February of 2024. All of these significant events show the incredible progress the city has made as an entertainment and sports destination. Looking to our regional properties, we had a very strong first quarter with competitive margins to 2021, and we are focused on driving strong rated gaming revenues by yielding our database with the highest-value players. Finally, I want to touch briefly on our operations in Macau. We continue to see headwinds in the short-term with public health policies impacting the ability for customers to enter Macau. Despite this, our 13% market share is higher than we have seen historically, and our properties are well-positioned to capture premium mass business as volumes begin to return. The concession renewal process is underway, and we remain confident in the government's judicious and fair approach to this process. Macau is an important part of our future, and we will continue to work with the government to ultimately get our license renewed. We look forward to further promoting the long-term development of Macau's gaming industry and supporting the government's tourism and diversification goals for the region. With that, I'll turn it over to Jonathan to discuss the details of the quarter.

Thanks very much, Bill, and good afternoon, everyone. I'd like to echo Bill's words by thanking the entire MGM Resorts team for their professionalism and resiliency in the face of an ever-changing operating environment. I'd also like to thank the Cosmopolitan of Las Vegas team for their support as we plan for the closing, and I look forward to welcoming the CoStars into the MGM Resorts family this quarter. Now let's spend a few minutes on our first-quarter results in some detail. Our consolidated first-quarter net revenues were $2.9 billion, and our net loss attributable to MGM Resorts was $18 million, a significant improvement when compared to net revenues of $1.6 billion and a net loss of $332 million in the first quarter of 2021. Our first-quarter Las Vegas Strip net revenues were $1.7 billion, and adjusted property EBITDAR for the Strip was $594 million. Net revenues were down 1% on a same-store basis due to 343,000 fewer occupied rooms, nearly all in January. However, same-store adjusted property EBITDAR of $472 million was up 21% versus the first quarter of 2019, demonstrating our broad-based margin improvement. First-quarter occupancy was 78%, but it was a different story each month of the quarter. The Omicron impact was significant in January, during which occupancy was 65%. We recovered to an occupancy of 78% in February and finished the quarter with an occupancy of 90% in March. The strength continued into April, where we saw an occupancy of 92% on the Strip. Despite the pandemic impact, ADR in the first quarter was $197 or $184 on a same-store basis, which was $1 above the first quarter of 2019. And same-store excludes ARIA and Vdara in 2022. Again, a different story each month for ADR. ADR had a similar cadence as occupancy, down 11% versus the first quarter of '19 in January, then up 4% in February and up 9% in March, driven by strong weekend demand. Simultaneous increases in volume and pricing improved our financial performance dramatically as we progressed through the quarter. Las Vegas Strip margins were 36% for the quarter and 35% on a same-store basis, an improvement of over 600 basis points versus 2019 on a same-store basis. We have the blueprint in place to sustain margins well above 2019 levels through our cost efficiency efforts and operating leverage. As Bill mentioned, together with robust group demand, there is exciting programming in the second quarter that will drive increased leisure business in Las Vegas and support occupancies in the low 90s. Our first-quarter regional net revenues were $891 million, an increase of 11% versus the first quarter of 2019. We delivered regional adjusted property EBITDAR of $313 million, which was 48% above 2019. Our regional casino business was quite strong despite the typical seasonality in the business during the first quarter. Our casino revenues improved 23% versus the first quarter of 2019. Our first-quarter regional margin of 35% grew 882 basis points versus 2019. The promotional expenses in the regional markets are stable and a few points below 2019 levels. Room nights were down in the first quarter due in part to staffing challenges, but that situation is improving nicely this quarter. Moving to Macau. Net revenues of $268 million in the first quarter represent a 9% decrease compared to the first quarter of 2021. Adjusted property EBITDAR was a loss of $26 million in the first quarter versus a positive $5 million in the prior year quarter. The current quarter also included a charge of $18 million related to litigation reserves. We're confident in Macau and our product offering, and we believe that once demand returns, we're very well positioned to grow, particularly in our premium mass and mass segments. Turning to BetMGM. Our 50% of BetMGM's losses in the first quarter amounted to $92 million, which is reported as part of the unconsolidated affiliates line of our adjusted EBITDA calculation. This was driven largely by the initial investment in New York, but we expect these losses to narrow in the upcoming quarters. The growth story for BetMGM is a key pillar in our long-term strategic plan. Connecting BetMGM with MGM Rewards allows us to develop a strong omni-channel link with our customers that will optimize our guest experience, both online and in person. Our first-quarter corporate expense, including share-based compensation, was $111 million, which included $9 million of transaction costs. We're strategically investing our corporate expense in growth areas, including improvements to our IT infrastructure, enhancing our digital offerings and our IR efforts in Japan. Before we wrap up our prepared remarks, I would like once again to reiterate our approach to capital allocation. First, we'll maintain a strong balance sheet with adequate liquidity. Second, we'll invest where we have clear advantages exercising prudence and measuring prospective returns for our shareholders. Finally, we'll return cash to shareholders. I think our actions thus far this year amply demonstrate our priorities in allocating capital. We have the closure on Friday of our strategic transactions with VICI and realized $4.4 billion in proceeds for MGM, bolstering our liquidity and strengthening our balance sheet. This quarter, we announced or will close two strategic growth investments to augment our digital and Las Vegas market position, LeoVegas and The Cosmopolitan of Las Vegas. Finally, during the first quarter, we repurchased 23.3 million shares for $1 billion. In April, we repurchased another 6.2 million shares. So since the beginning of 2021, we've repurchased 72.7 million shares for approximately $3 billion or 19% of our market capitalization. This activity brings our share count down to about 425 million shares. With that, I'll turn it back to Bill for his closing remarks.

Thanks, Jonathan. We've made solid progress in the company coming out of the pandemic, and our operating models are stronger than they have ever been. I'd like to again thank all of our team members for their commitment and dedication to MGM Resorts. We wouldn't be in the position we are today without all of their hard work. Obviously, we are looking forward to the rest of 2022 and beyond with confidence and feel our best days are yet to come. With that, operator, I'll turn it over and take questions.

Good afternoon. Everybody, hope you’re well. Bill, Jonathan, I want to ask you from where you sit, how you view your typical consumer and how they're maybe behaving both in Las Vegas and regionals. Are you starting to see any slowdown, given obviously what's out there in terms of higher gas prices, higher interest rates, and an equity market that hasn't really done well this year? And is that translating at all into any kind of pushback on hotel pricing, food and beverage pricing, particularly on the Strip? Any pushback on maybe on your kind of group bookings? And then are you rethinking maybe how you're pricing hotel and F&B product?

Thanks Joe. Look, I think generally, the answer is we have not seen any of that yet. We've seen obviously a tremendous amount of strength in March. April has continued. I think maybe Corey is probably best suited to answer some of this, and maybe Jonathan can finish it up. But Corey, if you want to—

Sure, Joe. We're not seeing any change in customer behavior. Pricing power is still strong, and our betting revenues are breaking records, so we're not seeing it.

Great. And then I know it's relatively small or very small, LeoVegas. Can you talk about how that fits with your joint venture? And then can you just talk about that company's exposure maybe to presently gray markets? And would you expect that business to maybe see a trend change in revenue trajectory as some of those gray market markets tend to transition into legitimate, more developed markets?

Sure Joe. Let me take that one. The first thing I want to start by just stressing our partnership with Entain as it relates particularly to BetMGM and what we've accomplished has never been better. I think we've finally really caught stride. You can see that in some of our numbers and our market shares; we're excited for the next launch that the guys will go through and define some of the product that's becoming our way. You'll hear a whole lot more about that on Investor Day on May 12th. As it relates to Entain specifically, we tried a year ago, as you know, to buy them. I don't think a whole lot has changed. You've probably watched the basis of their shares and our shares kind of go hand-in-hand. We said then, and I'm going to repeat now, we need and want to diversify the revenues in this company. We absolutely thought the space was the right space when we did the BetMGM deal. It's now been double validated by that, particularly the iGaming segment, which LeoVegas is extremely strong in. And so we made our move. To your point, it's not the world's largest acquisition; it's bite-sized. It does, though, give us exposure to nine global markets that we don’t currently have. We love that team, and what they've been able to accomplish over the last 11 years. They've had over the last five years, 16% compounded growth year-over-year. The Texas rate, the platform is down on the cloud. All of the technology we looked at, and I can assure you, we look at it a lot. It's first-class. We're going to get about 850 employees. Several hundred of them are technologists, something our company can desperately use and need, not only obviously for this effort, but potentially for other things long term in the company. So for us, all good things. As it relates to markets, about 75% of their current markets are in regulated markets. There are a few and only a few that are single-digit that we will close down because of our BetMGM, New Jersey being one of them. I think they—I don't think, I know they had 1% share in New Jersey's market last month. I don't see any of it as a real hurdle to get through. They have demonstrated, and we know because we have growth potential within that organization, that there are other things to capture. I think this last quarter would demonstrate when others potentially have struggled, they again had a great quarter. I think they just reported this morning, €14 million EBITDA, which is about a 35% gain over the first quarter of last year. I couldn't be more excited by the transition, even more so by the team and the ultimate technology and just the opportunity, I think, it provides us longer-term. It's pretty exciting for us.

Great. Thank you.

Hey, guys. Thank you for taking my question. Jonathan, maybe this one is best suited for you. But as you think about the current outlook for Las Vegas and you guys provided some color on the group stuff. Clearly, Las Vegas has had seasonality over the years. But as you think about the balance of 2022, and obviously, the challenging January with the variant spike and everything else that came with it, with group business coming back, do you get the sense that maybe the market could just build quarter by quarter as we move through the year? Secondly, I did just want to revert back to something you guys said a couple of quarters ago, that when the group business returned, it would be a slight hindrance to margins, but greater EBITDAR dollars. As the cost structure sits today, I'm assuming you still feel pretty confident that, that's what you'll see?

Yes. Thanks. Let me take those two questions in turn. First of all, as the year unfolds, we do see the group business continue to build. In particular, the second quarter will be very strong for our group business because our team was able to rebook many of the group customers that canceled back in January into the second quarter. All that being said, our business, as we've grown it, we've diversified our revenue streams, is not as seasonal as you might think. Through our event strategy and through our marketing strategy, we've been able to really drive levels of business across the year that keep our properties running at an optimal level. The group business, of course, was down in the early part of the year, but we're seeing it continue to grow and will exit the year at about 90% of 2019 levels. As for the margin dynamic you described, yes, clearly, as we bring back that important segment of the business, it's going to drive additional EBITDAR. Depending on the types of groups that we get, it may have a slight diminishing effect on the margins. The margins this quarter are a really interesting story. In Las Vegas, we reported about 36% EBITDAR margins for the quarter. Those started out in the low 30s and ended in the low 40s as we drove that additional occupancy. Generally speaking, occupancy is really good for margins in our business.

Understood. Thank you very much.

Afternoon, everyone. Thanks for taking my question. I wanted to ask about LeoVegas a little bit, just having sat on it through the day. It looks as though it has an inherent CAGR growth rate the way it is. But are you able to change the brand? Does MGM sort of wind up on the shingle in some way? What do you need to accelerate that from? I think it's a 16% CAGR that's in some of the information out there. And what's the ceiling for this? What's the long-term vision for it?

David, I think we see it as a vehicle to continue to grow globally, and it's a great starting spot because we, again, fundamentally like the foundation of the company, both in management and technology, particularly in iGaming. LeoVegas in Sweden, they have a dominant share. They're over 35% in the Nordics. We're fifth-gen in markets from the Nordics and in Sweden, in particular, they have a dominant share. That's of interest to us. They will use our—we ultimately, if we are able to get this through, we'll use our brands, MGM, Bellagio and others because it will be our company. One of the things that kept them restrained was capital. Given our balance sheet, our desires, and our ambitions in this space, they won't be capital constrained in the near term. This is something that we hope to have them lean into, and we're happy to help with that. We'll be cautious about it; we'll always want to understand growth and regulatory environments and all things that are out there. We've seen them demonstrate their ability to grow both organically and through acquisitions. We have a couple of targets in mind with them to continue to grow that we think makes us a larger piece of the pie for us and ultimately puts us on the map.

If I can add…?

Sure.

So, David, if I could add one thing to that as well is that, while we're very proud of the progress we've made on our share repurchases or just over a year, we've repurchased 19% of the market cap of the company, and that was an important part of the asset-light strategy. This allocation of capital to a company like LeoVegas, and possibly follow-on investment in that platform with other M&A opportunities, is exactly the type of allocation of capital that we had in mind when setting about this strategy to put it towards digital gaming, higher growth verticals, and a platform we could extend our brand internationally. So it really complements our capital allocation strategy.

Understood. And if I can just follow-up quickly regarding Vegas, and I think you touched on this from a few different perspectives. But as the mix rolls into April and the mix changes and we start getting more convention and midweek step backs, what happens to ADR as we roll through the year? Any thoughts about that would be helpful.

Yeah, David, it's Corey. What the convention business will do is help us in our midweek ADR; we've had a little bit less pricing power with that business, which will allow us to yield up those rates. Our casino base continues to be strong, and we don't see that business displacing that. To the contrary, we'll displace the lower-end package business before we do any of the casino business.

So up is the answer, more or less?

Yes.

Thank you very much.

Thank you very much. Jonathan, I just wanted to start with margins. You gave an interesting trajectory there, just how the quarter unfolded related to the growth and improvement in occupancy. Any reason that we should be more cautious as we move through the year relative to what you delivered in the March timeframe? I think one thing you've highlighted in the past is a little bit around the mix shift. But has gaming remained pretty strong so far? Just maybe help us think about puts and takes on Las Vegas margins.

Yes. I mean, performance—it's almost impossible to overstate just how strong our performance was in March. This company was firing on all cylinders and it was helped certainly by a very strong event calendar in the month. So, revenue levels to a property and margins in the Vegas market in the regions were very strong because of that. Going forward, there's no meaningful changes to the cost structure that we're going to see as we go through the year. The strength that we're seeing in group demand and what that means for rates, particularly in midweek will be healthy for margins. The casino business has been particularly strong. As we've said on prior calls, we do in our business planning expect some of that spend to normalize over the year. To the extent that happens, it could be a take on our margin levels. But like I said in the call, we're certainly comfortable with margins level being sustained in Las Vegas that are well above those that we delivered in 2019, and we certainly did that in the first quarter.

And Shaun, Bill here, maybe just a little added color because I can't help myself. So in January, in the midst of Omicron, we're in the low 60s; Las Vegas margin was still 31%. By the time March rolled around, we reacted to the business that improved 1,000 basis points in March. And this is another thing I'll brag on them because I'm proud of this for the team and the company particularly, Bellagio did—and I know we don't normally give these, but I can't help myself—Bellagio did $84.5 million in EBITDA in March. Don't go times 12 now. Having said that, it just shows the strength and it is a property 22 years into its history at an all-time month. A lot of it was helped by margin. When you're doing 41% margin, it just helps.

Thank you for that color. And then just as a follow-up, sort of a similar question, but on capital allocation this time. Obviously, I think the number given was 6.2 million shares repurchased in April. You kept a very strong pace as we look through Q1, and of course there was—I think, a little bit of a repurchase or a tender offer there by a single shareholder. So, can you just help us think about programmatic versus opportunistic as we think about the buyback pace going forward, obviously, a ton of cash in the door? So maybe just help investors think about the balance of the year and continuing some buyback in addition to all the other things you're able to invest in?

We’ve done just over $3 billion of share repurchases in just over a year. I think it's fair to say that this is a bit ahead of the pace that we might have predicted last year. It's because we've been opportunistic with opportunities the market presented in terms of the pricing of our shares, which we believe are undervalued. That being said, we now have largely come to the conclusion of the asset monetization strategy that we set out with the closure of the VICI-MGP transaction last week. We have before us a number of interesting M&A opportunities and other growth projects. Bill mentioned two of them, New York and, of course, LeoVegas in our prepared remarks. We're going to keep powder dry to be able to jump on those opportunities as they present themselves. So I think our pace of share repurchases might be lower as we go through the balance of the year. But again, a lot of it is driven by opportunities the market provides us.

Thank you very much.

Thanks.

Thank you. So one of your comments earlier piqued my interest that this LeoVegas acquisition was going to be potentially a platform for other deals. Can you just talk about that a little bit more? I mean, I think LeoVegas has the reputation of being really an iGaming-first platform. I know they use Kambi for the sports betting part of that business. Are you interested in Kambi as a sports betting platform? What other opportunities do you see in the digital space? Thank you.

Clearly, we will look as the industry continues to expand, whether you talk about Africa, South America, Brazil, and other places, we will continue to look at that through that vehicle. There are other like-minded acquisitions of scale in Europe that still exist, particularly Eastern Europe that potentially exist. Look, recognizing it's a bite-sized and mid-sized opportunity for us, the goal of buying it wasn't to keep it there. We've talked about diversifying revenue and ultimately cash flow; it's going to take some volume to do that. This is our start into that genre, and we like that team from an acquisition perspective. They've got the right mindset, and again we like the way that they think about the business. We like the way they market their business. Their margins have been good, and for reinvestment in the business, have never been great. We'll use that. I don't know about tomorrow, but I expect very soon once we get through this transition and transaction, we'll be back at looking how to grow that business, both organically and through acquisition.

If I can add one more point, I think you are right that Kambi operates at a regional level now. However, we've been very selective in doing due diligence regarding potential partnerships or opportunities for platforms as they emerge and continue to evolve. So we're very aware of what the industry is offering.

Perfect. And then on the BetMGM side, I think last quarter, you talked about having about $450 million of losses this year. Do you think that that's still a fair estimate? And then like what are your latest thoughts on the competitive environment on the revenue environment for the US sports betting item? Thanks.

Look, first answer is yes. Second one is I don't want to take Adam's thunder; if you tune in on May 12 at the Investor Day, they've got several hours of it, but generally good. From where we sit, we love what we see. We understand the noise around it all, but we're seeing through it, particularly with iGaming. I think Adam and that team, Madden Company will be digging into it in some great detail.

Thank you very much.

Great. Yes, I wonder if you could talk a little bit about what kind of returns you may be targeting in New York?

Well, look, arguably, as we know to date, the opening bid, and this is our—obviously, an RFP process is $500 million for license. We know that tax is currently set at an opening minimum of 10 and 25, which is favorable. It's kind of interesting; we're talking about a $0.5 billion license fee as favorable. It's the highest in the history of the industry by 5x. However, we like where the governor went with it; we like the opportunity it creates. We had hoped to invest up to a couple of billion in the first round, Phase 1, to put us into the table games business, to expand some amenities and put it a much-needed parking garage there to put an entertainment facility there and potentially some other things, we think will attract the kind of market available to us both in the neighborhoods and the surrounding areas. Like all of our stuff, we target mid-teens and beyond, and this wouldn't be any different. I think that's a good way to think about it.

Okay. Great. Thanks. And can you talk a little bit about LeoVegas, the tech capabilities and how that compares to what you have in the US?

Look, I would say the key differentiator there is it's cloud-based. Therefore, when you talk about expansion and scalability, and you talk about the ability to bifurcate the frontend from the backend, it presents that fairly easily. We’re not running around having to deal with a bunch of hardware. We’re not running around and having to deal with code that goes back a decade or so. It enables us to be quick, and scale is a principle of two differentiators. They’ve demonstrated the ability to have in-house game studios and others to have the casino business that is meaningful. Obviously, we’d like to think, and we’ve seen this through at MGM when we put our brand on things, it works. It works exceptionally well. Some of the best games on BetMGM are MGM-branded games, and so we intend to do the same and grow that business from there. The last thing worth noting here and there is live dealer; it’s a space in a place we want to continue to push into. This will give us one of the vehicles to do that. If you think about it, and you understand some of the valuations in the industry when it relates to live dealer providers, at our core, it’s our stores that represent what they do. If we can’t do this in a fun, compelling, and exciting way, then shame on us. So we think there’s a great opportunity to do that as well. Vegas’ backbone and background enables us to do exactly that kind of offering.

Okay, great. Thanks very much.

Hey, good afternoon everyone. Thanks for taking my questions. I just wanted to hit one more on Las Vegas. Can you talk maybe about the booking trends across the different properties in your portfolio in terms of luxury versus core? Is there any discernible differences in bookings, just given the volatility in the air fares and fuel prices?

Dan, this is Corey. We're not seeing anything different than we would have seen in the past. I mean, luxury properties obviously don't have any challenges. Midweek, when you don't have convention business, the legacy properties have probably a little bit more of a pricing challenge, but that's very similar to what we saw pre-COVID.

Got it. And then just actually on the regionals, I think in the deck, you mentioned that staffing is expected to continue to ramp, but the margins in this business have been remarkable in that mid-30s range. I mean, as we think about you continue to ramp, bringing back non-gaming amenities, maybe the labor and cost inflation that's out there, how should we think about the cadence of the margin structure for the regional business over time? Is this current rate a good enough level, or should we moderate our expectations over time?

I think we’re getting to the finer strokes in terms of the opening of nongaming amenities, ones that are important but are not financially material enough to meaningfully move the margins one way or another. So, what’s happened also is—in recent months, we’ve been able—due to the availability of labor improving, we’ve been able to open the capacity we really need in order to meet the demand. That obviously helps margins when we can have more customers in the hotel. So I think the impact going forward in the regional markets on the amenities on margins is going to be very small.

Got it. Thanks so much.

Okay.

Hi, Bill. Hi, Jonathan. Thanks for taking my question. I know the international and group business is really just starting to ramp up now. But curious—or maybe Corey, if you have any insights as to the spending patterns of those customers as they come back to Las Vegas. We saw that revenue spending of the US domestic leisure traveler, and I’m trying to get a sense of how well some of the other customer segments are spending when they’re actually getting back to Las Vegas?

Let me kick this off, John, quickly and turn it over to Corey. As for the international, one of the interesting things is, as I mentioned in my comments, the 80% return in international air. Despite the success we’ve seen so far, particularly in the last 90 days, Canada has not fully returned yet. That's good news. And why? Because we think there’s a substantial uptick to come when that finally opens up. We think Mexico is there; Europe’s been about half as well. And then, obviously, we have not seen much from the Far East—whether it's leisure or at the higher end of the business. Although the international marketplace is holding up from a casino perspective. The genesis of all of that between Canada, Europe, and ultimately whether it’s six months, a year, or God knows from now, the return of the balance of Asia will all be accretive and additive to where we are today.

Thanks, Bill. That’s helpful. Maybe one on Japan. I know you gave an update that hopefully towards the end of the year, licensing process and if you’re successful, could you give us a ballpark sense of what a timeline might look like from there, one of the most exciting projects you guys have on the horizon? I’m curious on a rough outline as to when you might be able to get a shovel in the ground and potentially get moving if the licensing process kind of goes under the current timeline?

Yes, thanks, John, for the question. I agree; to think we have a crack in this market at scale and to be one of the long-standing survivors, I think, will be pretty compelling for all of us. That said, I'd hope to be doing pylons by late 2023, early 2024. Given its scale, this is a four-and-a-half-year project to build, so this is a late 2028 into 2029 project is really the way to think about it, I think.

Got it. Thanks, Bill. Thanks, Jonathan.

Thanks, John.

Hi. Good afternoon. Thanks for taking my question. I wanted to dissect the casino segment. You noted in the slide deck that slot revenue on a two-year— or I guess, on a three-year stack basis was up 20% to 30% in the regionals in Vegas, where tables were flat to up 10%. I understand that Vegas is probably because of the higher-end baccarat hasn’t returned, that you just touched on, Bill. But what's the disconnect in the regional markets? Is this something that could be a structural change to the business, just a higher percentage of slots versus table revenue going forward? Thanks.

Hi Chad, it's Corey. In the regionals—particularly—and Jonathan touched on this a little bit with the room limitations, especially at properties like Borgata that had an impact on tables. We are starting to see some of that play come back. In Las Vegas, the typical game play is pretty solid, and you're doing that without any Asian player. To even be up there is a testament to the strength of that market. Chad, fundamentally, is there a change? I mean time to check, there might be, but we don't see one. I mean, we're seeing some of the same activity case, whether it's the extreme amount of cash business we see in Maryland. We just had a very successful tournament this weekend in Borgata, which proved once again, the marketplace is there for us on tables for Blackjack. We hope to see some of this as well.

Okay, great. And then regarding the Cosmopolitan and Las Vegas acquisition, how quickly after the close can the asset be implemented into your—I guess, your portfolio in Vegas and your loyalty system? Thank you.

It will take depending on the system and the environment. Some stuff is pretty quickly and some of it will take ultimately out through a year. We want to do it properly; we want to integrate the property; we want to ensure for both employees and guests, particularly their rewards guests, that there are no takeaways. It just depends on what segment and what piece of that environment you're talking about. But again, it's anywhere from 90 days to a year depending on how we—what the particular subject matter is. We're in—I think we've said earlier, to make a mistake. That place has done exceptionally well. I think it's like if you look back trailing 12, like $450 million of cash flow or something around that number. We're going to go cautious and relatively slow.

Perfect. Thank you very much. Appreciate it.

Great. Thanks. I appreciate you're not seeing any impact to the consumer yet from inflation, but can you just talk about how long the booking window is in Vegas today? To what extent do you have forward visibility across your markets, given all the macro uncertainty out there?

Yeah. Barry, the booking window is similar to what it's been in the past, it's past 90 to 120 days, we have plenty of visibility there, and we're pretty comfortable with that. We're not seeing any slowdown in those areas.

Great. That's great to hear. And then just as a follow-up question, you noted in the deck, and I think in the remarks, how BetMGM will integrate seamlessly into MGM Rewards. But how are you thinking about cashless gaming, maybe the ability to allow players to use their BetMGM wallet to fund purchases and play at your physical casinos? Thanks.

I don't want to take Adam's thunder, but he'll go over that product offering come May 12th. But single wallet is literally in the making, and he'll talk more about that on Investor Day.

We'll talk about integrating that with your physical casinos?

Yes. Given the environment and given the state, there's a lot of regulatory nuances that goes along with that, but structurally and from a technology perspective, our ability to do that is coming soon.

Great. Looking forward to it. Thank you so much.

Thanks Barry.

Hey, how is it going? In Vegas you get some very helpful intra-quarter margin commentary. Could you give us some color on where we stand on a same-store sales basis on some of the non-gaming, non-hotel spend? So I guess, F&B, entertainment, etcetera, just ballpark versus '19?

Sure. Ben, it's Corey again. The food and beverage numbers are at '19 levels now, even with fewer covers, a little bit less covers, so as occupancy picks up, we come pretty close to there. The entertainment spend is pretty close to where it is in '19 also. There's a lot more supply out there. So, we're seeing our average ticket prices up in many of our venues with occupancy remaining fairly consistent. All in all we're pretty comfortable with what we're seeing in the spend in the other areas. Eventually the catering and banquet business will come back, and March was a great month for that. We have some properties that had record catering banquet business. Once again, that is a higher-margin business than just regular restaurant business. So we're pretty optimistic about that also.

That's really helpful. Thank you. And then on Downstate New York, if you do receive one of the licenses, you mentioned slots, tables, and some new amenities. Would it ever make sense to start on those new amenities now and then, I guess, dial up or back the project based on the outcome? I guess the thought process being to get a head start. At one point, there was discussion of netting out any spend at the property against the license fee. I'm not sure where we stand there, if that was just noise?

Yes. I don't know that given the competitive nature of this, the netting out piece will sustain. I suspect it won't. Look, we don't want to be presumptuous. We like where we stand. I think we've served that community well, and in turn, they're prepared to support us. We're going to go like hell to make sure that the day this happens that slot machines are ready to go into the building. We're going to flip out roughly 1,000 machines give or take, to bring in tables as soon as we possibly can within months. We will make an assessment on a parking facility and when to go on that master plan. We had to ultimately get our head around the master plan, which we're working on diligently now. I wouldn't mind that under any circumstance, parking needs to be a real piece of this. But it's a couple of billion dollars, and we're going to be thoughtful about how quickly we do go when it's all said and done.

Makes sense. Thank you.

Thank you. Thank you all for joining us today. Again, I just want to emphasize the resiliency of our team and the company, in fact, even the industry. Given how quickly we all came out of COVID and what we were able to do in particular examples like the one I mentioned in Bellagio in March, that was kind of unprecedented. I couldn't be more excited by it and thankful for everyone's effort on that. Our future has never been brighter. We're sitting on an extensive amount of liquidity. You saw us put it to work immediately with LeoVegas in a space that we're highly interested in and highly motivated by. Our balance sheet is a fortress. We're going to continue to look at proper ways to allocate capital, whether it's stock repurchase or most notably, I think, at this venture, ways to grow our cash flow. We've continued to enjoy the growth of Las Vegas in the context of being the event capital of the world. The events I mentioned earlier, particularly the Formula 1 race coming forward, every weekend that we had a game or an event downtown was a teens digit growth norm for those properties. All of this is inherently built into our future now. We’re excited by New York, of course. Ultimately, I think Jon put a point on it; long term, Japan is a very exciting thing for the company. It will help massively diversify our revenues more globally. With that, operator, I thank you, and I thank you all for joining us today.