MGM Resorts Faces Serious Losses Due to Closure of Macau Casinos

MGM Resorts is struggling with significant declines. The operator has completed the previous year with decreasing results and coronavirus issues threaten to devastate the operator’s performance even further. The generated revenue in Q1 2020 will be affected by regular shutdowns of Macau casinos, making casino officials even more concerned..

Recent Figures

MGM Resorts has just unveiled the report for the final quarter of 2019. The operator recorded $3.2b in revenues or 4% more money compared to the Q4 2018. Most profits came from the recently completed Bellagio real estate deal ($2.7b).

The provider’s Las Vegas Strip properties marked an increase of 4% compared to last year, reaching $1.4b. The growth appeared despite table game turnover declining 14% and table win falling to 21.1%. Slots revenues, on the other hand, climbed 2% while slot win remained the same. Regarding US generated revenues, local properties marked an increase of 15% to $900m, with the biggest part of profit coming from casino acquisitions in New York and Ohio, boosting the slot revenues up to 14%.

Macau Results

If we take a look at MGM’s result in Macau, we can see an increasing trend as well. MGM China’s joint venture income was up 6% to $727m thanks to the table games which increased by 31%. MGM Macau, on the other side, recorded 1/3 decline in VIP turnover, causing the total VIP win down by 1/5. The overall performance for 2019 sees MGM rising 10% to $12.9b....

Murren’s Announcement

MGM Resorts has just disclosed more shocking information. Its chairman/CEO will leave the company prior to the expiration of his contract. After the company offered the separation deal, Murren remained reserved but he hopes to obtain some role in MGM plans for Japan. Commenting on the MGM chances to get Japanese integrated resort license, Murren said:

“I will accompany other MGM execs to Osaka in May to pitch the locals on why MGM is their best casino bet. I’m absolutely sure I’m going to be involved in the Japan project. In fact, I’ll probably be even more involved in the Japan project as time goes by.”

Coronavirus Problems

MGM casinos in Macau are now closed, as part of shutdown measures introduced by the local government. If the coronavirus issues continue, it could lead to the extended closure of the operator’s venues and additional losses. According to MGM calculations, it currently loses $1.5m per day due to Macau shutdown, which is $1m better than rival Wynn Resorts announced. Despite all these problems, MGM officials believe that the financial effect will be minimal.

Meanwhile, China’s Hubei province disclosed new statistics and 15,152 new infections, increasing up to 52,526 cases. It has also revealed 254 new deaths, resulting in a total number of 1,367. If the infection continues to spread all over the country, not only MGM would be affected but also other casino operators....

Source:

„MGM Resorts losing $1.5m per day due to Macau virus shutdown“, Steven Stradbrooke, calvinayre.com, February 13, 2020.