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MGM Resorts International Chief Financial Officer Jonathan Halkyard gave company shareholders an early holiday gift, given that official gaming revenue totals and tourism figures surrounding last month’s Formula One Las Vegas Grand Prix won’t be released until after Christmas.
Speaking at a Bank of America investment conference last week, Halkyard said MGM’s efforts in hosting guests for the Nov. 16-18 racing event produced “the highest-grossing weekend for hotel revenue” in the company’s history.
He said MGM “invested pretty heavily” into the inaugural Grand Prix, including building and operating the ultraluxury trackside Bellagio Fountain Club, which combined high-end dining, grandstand seating and a rooftop viewing space the length of three football fields.
Halkyard said the company’s record weekend came during what is normally the slowest weekend of the year on the Strip, falling just ahead of the Thanksgiving holiday.
“It met our expectations in terms of casino volume and food and beverage,” Halkyard said. “Most importantly, the guests and our employees had a very good experience during the long weekend.”
MGM did not say how much the company spent to build the temporary three-level venue adjacent to the Bellagio lake and fronting the longest straight-away stretch of the race.
Many of the club’s guests were invited casino customers from MGM’s Strip resorts. Other visitors paid a reported $11,000 for a three-day ticket to watch the races and dine on meals prepared by MGM’s star chefs at tables in space that could easily be mistaken for any of the company’s high-end restaurants. A staff of some 500 MGM employees worked long hours at the venue.
The Gaming Control Board will release official statewide gaming totals that cover nearly two dozen reporting markets, including the Strip, during the last week of December.
The Las Vegas Convention and Visitors Authority will release the month’s tourism numbers for November on the same day. Both reports will include totals from Formula One. Race officials said the event drew 315,000 ticket holders over the three days.
Halkyard was bullish on the event despite the “friction” it brought in the preceding months due to the construction of the 3.8-mile racing circuit that included resurfacing nearly 2 miles of the Strip. He said subsequent races during the next 10 years won’t have the same upheaval.
He said MGM will bring back the Bellagio Fountain Club in subsequent years.
“I’m very optimistic that this is going to be a fantastic event in the years to come,” Halkyard said.
CBRE Equity Research analyst John DeCree said in a research note that MGM properties most likely saw the largest benefit along with casinos operated by Caesars Entertainment, Wynn Resorts and The Venetian.
“Anecdotes point to a successful event,” DeCree wrote. “As expected, the race skewed to the high end and to center Strip properties towards the heart of the race.”
MGM Resorts CEO Bill Hornbuckle has said business drawn by F1 will translate into a record revenue month in November for the Strip. He said credit extended to high-end customers was larger than credit offered during the 2015 Floyd Mayweather Jr. vs. Manny Pacquiao fight at the MGM Grand Garden.
MGM will report fourth-quarter results in either February or March, which will help determine if the race was good for the company’s bottom line.
Adelson, Cuban pairing is about legalizing casinos in Texas
If the acquisition of a majority stake in the NBA’s Dallas Mavericks by Las Vegas Sands controlling stockholder Miriam Adelson leads to Texas lawmakers approving casinos, gaming analysts said the $2 billion will be worth the cost.
During the past decade, the company spent millions out of its corporate coffers and by the Adelson family in a futile effort to convince Texas lawmakers to legalize casinos in the Lone Star State.
Texas, one of the largest states in the U.S. that has shied away from legalizing widespread gaming, has been the white whale to Sands’ Captain Ahab.
Gaming insiders expect the company and other proponents in the state to push casino and sports betting legalization efforts again when state lawmakers meet in 2025.
For Adelson and Sands, majority ownership in the Mavericks, a team valued at $3.5 billion, is the newest weapon in the arsenal.
Earlier this year, Sands backed a legislative effort that would have landed a single Las Vegas-style casino resort in each of Texas’ four largest cities.
The measure failed even after Sands, according to the Dallas Morning News, spent almost $6 million on more than 60 lobbyists to push through the legislation. Two years earlier, the company spent $6.7 million on 76 lobbyists.
Sands also formed a political action committee, almost entirely funded by Adelson, that contributed $2.2 million to statewide officials and dozens of lawmakers from both parties during the 2022 campaign. Republican Gov. Greg Abbott’s campaign received $200,000 from the PAC and an additional $1 million donation from Adelson personally.
The roadblock in Austin has been Texas Lt. Gov. Dan Patrick, a conservative Republican and a staunch anti-gaming opponent, who serves as the president of the state senate and controls the legislation in the upper house.
Enter Mark Cuban, a technology billionaire who purchased the Mavericks from H. Ross Perot Jr. in 2000 for $285 million and turned the franchise into a perennial contender that won the NBA title in 2011. The Mavericks have the NBA’s second-highest winning percentage (59.6 percent) since Cuban bought the team.
Cuban, who will retain a stake in the team and full control of basketball operations, has been a proponent of legalizing gambling in Texas. According to The Associated Press, he was interested in partnering with Sands on a hotel-casino complex in Dallas that would include a new arena for the Mavericks.
The Texas Legislature meets for 140 days every two years. The next session is in 2025. If the NBA Board of Governors approves Adelson’s purchase of the Mavericks, expect to see casino legislation bandied about throughout the 2024 campaign season.
Adelson sold more than 46.2 million shares at $44 per share, but she still retains a nearly 52 percent majority ownership in the company. Las Vegas Sands repurchased 5.8 million of Adelson’s shares for $250 million.
In connection with the stock sale. Adelson and several family trusts entered into lock-up agreements with Sands over the next year, restricting them from buying and selling the company’s stock.
News, notes and quotes
Groundbreaking for M Resort expansion scheduled for Monday
More than a year after first announcing plans to double the size of M Resort in Henderson, Penn Entertainment will get to work on the $206 million project. The company will host a groundbreaking event Monday with corporate executives, property leaders, Henderson officials and designers of the development.
The construction will add 384 rooms to M Resort through a second hotel tower. The project will also include expanded meeting space and other amenities.
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MGM unveils plans for New York City-area casino
MGM Resorts International released details for MGM Empire City, a full-scale casino redevelopment for its Yonkers, New York, racetrack location. The company is seeking one of three New York City-area casino licenses the state is expected to award next year.
The company is considered one of two favorites, along with Resorts World, for a license. The companies operate slot machine-like video lottery terminal casinos attached to an operating racetrack. Yonkers is 15 miles north of Manhattan.
MGM said the casino would be redeveloped and enlarged to include table games, a BetMGM sportsbook, new restaurants and bars, meeting space and a 5,000-seat entertainment venue.
