MGM Resorts to Focus on iGaming After Revenue Fall
Unsurprisingly, the casino operator MGM Resorts (NYSE: MGM) has been suffering during the Covid-19 pandemic and it has reported a 60% fall in revenue for 2020, down $1.03 billion to $5.16 billion year on year. In response, it says that it plans to expand its online gaming operations, which has become a very reliable revenue stream.
While the operator managed to reduce its expenses by 35.6% in 2020, they were still higher than revenue. Most of 2020’s revenue, $2.87 billion, came from the operator’s land-casino operations, but this was down 54.9% from 2019.
MGM Resorts said that its Las Vegas Strip properties were its main source of revenue; however, they brought in 61.5% less income than 2019, at $2.25 billion. Other operations in the US dropped 44.6% to $1.97 billion. The operator also suffered in China, where a number of travel restrictions are in place, and suffered a 77.4% drop in revenue.
Overall, this led to a $642.4 million operating loss in 2020, after a $3.94 billion operating profit in 2019. Furthermore, its iGaming joint venture with Entain (LON: ENT ) saw a $124 million operating loss, despite significant growth. With everything taken into account, MGM’s final net loss was $1.3 billion.
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However, the CEO and President of MGM, Bill Hornbuckle, has said that the group will continue its plan to expand online gaming activities and that he remains confident that the business will recover. He added that the company has “strengthened [its] operational foundation through cost efficiencies”, meaning that he believes they are well positioned for sustainable growth.
Hornbuckle went on to say that the online division, BetMGM, is set to expand. So far, it has launched in seven states, including in Michigan, Virginia and Iowa earlier this year. By the end of the year, he hopes that the service will be available in 20 markets. Hornbuckle also hinted that they are set to launch in the global iGaming market, despite the proposed takeover of Entain falling through.
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