WEBVTT - MGM Resorts CEO  Talks Expansion Plans

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news, MGM President and CEO

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<v Speaker 1>Bill Hornbuckle Bill another thing that analysts had said, the

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<v Speaker 1>analyst at Susplhanna saying that if you buy MGM, you

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<v Speaker 1>better be right on Las Vegas. What is the promise

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<v Speaker 1>of Las Vegas in terms of how much you can

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<v Speaker 1>bring in this year and how booming the economy could

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<v Speaker 1>get this year.

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<v Speaker 2>Look for us, Las Vegas fundamentally is still at the

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<v Speaker 2>core of our business. We're in the luxury segment and

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<v Speaker 2>about eighty percent of our earnings come out of luxury.

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<v Speaker 2>So anything about the place I'm sitting in today, Blazio, Aria,

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<v Speaker 2>the Cosmopolitan, MGM, and to a certain extent even Mandalay.

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<v Speaker 2>In our core convention business, it is all doing well.

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<v Speaker 2>Occupancies are at all time high again average rate we

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<v Speaker 2>reported to the quarter, and I think it'll send in

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<v Speaker 2>this quarter up sixty seven percent. And so Las Vegas

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<v Speaker 2>continues to do well. I think the question will be

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<v Speaker 2>not if they come, but what the spend will be

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<v Speaker 2>around the perissery, round, entertainment, through beverage, and some of

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<v Speaker 2>the other answery things people spend money on here. But

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<v Speaker 2>our core fundamentals are solid, and Las Vegas is continuing

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<v Speaker 2>to drive that for us and I think ultimately for

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<v Speaker 2>the industry.

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<v Speaker 1>Bill, how do you feel about inflation at this point

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<v Speaker 1>in time? Are there any signs that the consumer is

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<v Speaker 1>feeling the sting of inflation that could impact that trajectory

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<v Speaker 1>in Las Vegas or anywhere else in the country.

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<v Speaker 3>We're not immune from any of it.

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<v Speaker 2>I think at the end of the day, people still

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<v Speaker 2>cherish this experience.

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<v Speaker 3>It's a getaway, it's an escape.

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<v Speaker 2>I'll reflect on something back during even the Great Recession,

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<v Speaker 2>the community ran.

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<v Speaker 3>Our company rund eighty two percent.

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<v Speaker 2>So if you think about nineteen two thousand and eight

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<v Speaker 2>and all that happened, that people come to Las Vegas,

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<v Speaker 2>what they do when they're here, what they spend money on, ultimately,

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<v Speaker 2>I think becomes that differential the barometer. We have not

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<v Speaker 2>seen a slowing down somewhat in the lower end of

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<v Speaker 2>our category, the legacy properties that we have, We've seen

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<v Speaker 2>some minor pullback, but you saw the results as it

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<v Speaker 2>relates to the overall mol totality of our business driven

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<v Speaker 2>by this particular quarter, super Bowl here in Las Vegas,

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<v Speaker 2>and other events that will continue to host here. You know,

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<v Speaker 2>We've become not only the entertainment capital of the world,

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<v Speaker 2>but one of the sports capitals. And so you think

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<v Speaker 2>about the entertainment drivers we have between Allegiant, T Mobile,

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<v Speaker 2>Ultimatellions and subsequently in a couple of years the A's

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<v Speaker 2>coming year, the long term view is pretty pretty strong.

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<v Speaker 4>Well, just to meditate a little bit longer on Las Vegas,

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<v Speaker 4>I mean you mentioned the super Bowl for example, some

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<v Speaker 4>of the other sporting events coming up, your Formula one

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<v Speaker 4>coming up as well. When you think about those events

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<v Speaker 4>and the benefit on Las Vegas properties, I mean, how tangible,

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<v Speaker 4>how meaningful has.

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<v Speaker 2>That been.

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<v Speaker 3>Substantively?

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<v Speaker 2>I mean if you look at if you go back

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<v Speaker 2>to nineteen, which was, you know, given the pandemic, was

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<v Speaker 2>the last real full year we could measure off of.

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<v Speaker 2>We have absolutely raised the bar when it comes to

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<v Speaker 2>rooms of note and pricing, and so you know, we're

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<v Speaker 2>looking at twenty five to thirty five percent more than

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<v Speaker 2>we were at that baseline, and that has been consistent

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<v Speaker 2>and continues to be consistent from last year twenty three,

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<v Speaker 2>which was a record year, now into this year. And

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<v Speaker 2>so we remain very optimistic and we have now enough

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<v Speaker 2>of those events, not like we have one, we consistently

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<v Speaker 2>pull them in and continue to continue to motivate that activity.

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<v Speaker 2>Our Legion Stadium was destined to have about two thousand

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<v Speaker 2>events a year.

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<v Speaker 3>Last year, it had forty two.

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<v Speaker 2>This year it's going to have like thirty five or

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<v Speaker 2>thirty six, and so they're meaningful, and it literally that

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<v Speaker 2>stadium sits in our backyard, particularly at the south end

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<v Speaker 2>of the strip, and so the activity case is consistent,

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<v Speaker 2>and it's just raised the fatality to the bar for

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<v Speaker 2>all of us, but particularly us year with nine properties.

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<v Speaker 4>We let's talk a little bit about your portfolio of

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<v Speaker 4>casinos because Bloomberg News has reported that you're considering some

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<v Speaker 4>of your domestic casinos and you actually said earlier today

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<v Speaker 4>that your casinos must show quote real growth or risk sale.

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<v Speaker 4>So if you could define real growth and over what

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<v Speaker 4>timeline you're thinking about potential sales, that would definitely be helpful.

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<v Speaker 2>I think principally our regional properties, and when you think

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<v Speaker 2>about the marketplace, when you think about real growth over inslation,

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<v Speaker 2>when you think about capital requirements and where's best to

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<v Speaker 2>put our capital either, as you've seen, we've brought back

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<v Speaker 2>thirty six percent of the company over the last couple

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<v Speaker 2>of years or in assets that are both international or

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<v Speaker 2>well as well here in Las Vegas.

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<v Speaker 3>To a certain extent, what's the best use of our capital?

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<v Speaker 2>And so when you think about a couple of our markets,

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<v Speaker 2>you know, we question, we challenge, is there going to

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<v Speaker 2>be real growth there? What are the capital requirements coming up?

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<v Speaker 2>And how are we best in our shareholders best served?

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<v Speaker 2>And in a couple of instances, you know, we probably

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<v Speaker 2>will do something, but that's time to tell.

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<v Speaker 1>You know, when you look at the access cash that

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<v Speaker 1>you reported, I believe it's about one point two billion

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<v Speaker 1>dollars bill and it raises the question would you consider

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<v Speaker 1>acquisitions at this point, particularly when it comes to expanding

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<v Speaker 1>in your digital presence online sports betting.

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<v Speaker 3>What do you think brick and more? You know, I

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<v Speaker 3>think less.

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<v Speaker 2>So we are more interested in new jurisdictions that have

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<v Speaker 2>real growth. You know, we're building in Japan and then

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<v Speaker 2>I'll take a great deal of our cash over the

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<v Speaker 2>next couple of years. But when you think about digital,

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<v Speaker 2>we see that as the horizon. And I know, you know,

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<v Speaker 2>we have a partnership with n TAN and VETMGM here domestically,

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<v Speaker 2>but we've invested a great deal of time, energy, and money,

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<v Speaker 2>and we'll continue to do so internationally. Through our Leo

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<v Speaker 2>Vegas acquisition, we now have a content gaming company that

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<v Speaker 2>helps us provide content into that business. We're looking for

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<v Speaker 2>other bulletons that would make it make sense. Was very

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<v Speaker 2>interested in Live Dealer, a proposition we'd like to motivate

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<v Speaker 2>here from Las Vegas and broadcasts to the rest of

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<v Speaker 2>the world. We think it could be meaningful over time,

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<v Speaker 2>and so we're going to continue to invest into that

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<v Speaker 2>space and relatively aggressively, but realizing those are not massive

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<v Speaker 2>capital allocations or capital outlays. We're more structurally getting a

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<v Speaker 2>business right to long term growth and.

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<v Speaker 4>Bill We don't have much time left, but we haven't

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<v Speaker 4>even talked about China, and we have to talk about

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<v Speaker 4>what's going on in Macau, where you recently gained share.

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<v Speaker 4>I think a lot of people got excited to see

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<v Speaker 4>those details in the report this morning. What do you

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<v Speaker 4>attribute that game to? Is that just the overall pie growing?

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<v Speaker 4>Of course that recovery is still going on. Are you

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<v Speaker 4>actively taking share in that market?

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<v Speaker 3>Well, I think we're actively taking share.

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<v Speaker 2>Look, we came into the pandemic with about eight or

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<v Speaker 2>nine percent of the market.

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<v Speaker 3>We currently sit in the mid teens left. This last

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<v Speaker 3>quarter was seventeen percent.

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<v Speaker 2>We've been aggressive in the context of what we've done

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<v Speaker 2>to the properties, what we've done at the casino floor,

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<v Speaker 2>in the layout, how we've approached a new error without

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<v Speaker 2>junket operatives. We've had offices all over the globe, most

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<v Speaker 2>notably in the Far East for thirty years, and so

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<v Speaker 2>our ability to leverage into our own network and our

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<v Speaker 2>own systems to go get customers directly and understand their wants,

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<v Speaker 2>needs and desires, we think is somewhat unique and it's

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<v Speaker 2>paying off and.

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<v Speaker 3>You can see the results. Obviously, we just hit our

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<v Speaker 3>quarter over three

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<v Speaker 2>Hundred million cash flow, which was an all time record,

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<v Speaker 2>and we believe we can sustain this level