MGM Resorts International CEO Bill Hornbuckle insisted that Las Vegas is far from peaking and his company has learned its lessons from last year’s cyberattack that crippled operations across the country.
Hornbuckle appeared onstage Tuesday at G2E with Contessa Brewer from CNBC to talk about a range of issues from F1 to online gaming. In August on MGM’s earnings call, Hornbuckle said F1 was softer this year and Brewer asked for an update.
“It’s soft in the early stage of the booking cycle, but what we’ve seen in terms of gaming revenue is on par and may actually exceed (2023),” Hornbuckle said. “Last year when it was announced, our rooms got gobbled up quickly, so our rates remained high. This year, it’s more of an inverted hockey stick, where we’re filling rooms later in the cycle. I think the town has learned a great deal. There’s less noise out there in the media. We have a football game at the south end of the Strip and the town is doing a bunch to activate. It’s a whole different feeling going into it.”
Hornbuckle told the audience that when the $1.5 billion Las Vegas A’s baseball stadium opens in 2028, the city will have two stadiums and an arena within close proximity of one another and MGM properties.
When the Cleveland Browns played in Las Vegas last month, more than half the crowd consisted of Browns fans who spent numerous days in the city, Hornbuckle said. “We get 16,000 people to show up for a Canadian hockey game on a Tuesday night. And we’re excited to be in the middle of it.”
As for the cyberattack in September 2023 that ended up with a price tag of $100 million, Hornbuckle joked that MGM’s insurance premiums are higher.
“Our carriers lined up and have been good partners,” Hornbuckle said. “We’re actually recouping some of those losses. That being said, originally, it was a people hack and not a system hack. It’s about making sure we have the right safeguards in place, but we’re in the stage where we’re architecting our environment. We’ve learned a lot in terms of frontline defense and worked intimately with the FBI, because we weren’t going to cave to giving money. It was devastating in the context of its scale, but we’re in a much better place.”
When asked about what keeps him up worrying at night, Hornbuckle cited geopolitical issues he has no control over, but he also mentioned issues in states that want to raise gaming taxes, upsetting when investments were made based on initial tax rates.
Hornbuckle said MGM is in great shape long term, with New York “right around the corner” and a casino in Japan under construction.
“I like our long-term future. The question people raise is whether Las Vegas has reached its peak. I’ve been hearing that since the 1980s. First it was the riverboats, then tribal, and on and on. Some years are better than others, but Las Vegas continues to grow and we keep giving people good reasons to come here.”
Brewer asked why Americans are more interested today in experiences over accumulating things. Hornbuckle responded that it’s driven by Millennials, who use Las Vegas as a place to escape to and can now say they’re coming for an event. “The more we make that event-driven activity a principal reason for a visit, the better off we’re going to be.”
Hornbuckle discussed what it’s doing internationally to bring experiences to guests. He cited the push by the government in Macau to drive non-gaming related play in terms of visitation. MGM spent $40 million on a museum with an exhibit of Chinese antiquities. It plans to launch a full production show by the end of the year.
“Each market has its own nuance. The design and development in Japan have that in mind, with boxing and mixed martial arts and large-scale showrooms. We’ll bring our version of Las Vegas to a unique culture and hopefully it translates.”
The CEO mentioned the launch of BetMGM in the UK and the Netherlands and that they have a couple of other markets in mind. He also said they’re heading to Brazil in January.
Brewer asked about the marriage between Entain, the technology provider, and MGM, the hospitality company, in their BetMGM joint venture.
According to Hornbuckle, at the beginning of the relationship started, Entain executives believed that their product worked around the world as it did in Europe and didn’t need to be modified.
“We all found out relatively quickly that baseball, football, and all the propositions and activities in America are completely different. In the early days, our brand went a long way in carrying the story.”
Hornbuckle said they’ve come a long way with products with Entain and noted single wallets, single accounts, speed, and other enhancements. With a change in management and mindset at Entain, he looks forward to a more productive relationship in product and performance.
MGM has other ventures as well.
At Bellagio and MGM Grand, four roulette games are televised for live gaming iin markets abroad. MGM recently recorded more than $1 million in handle in one day at Bellagio in broadcasts to the UK and other markets.
Digitally, MGM is performing with double-digit growth in igaming and reaching a broader audience.
“We’re the only integrated-resort operator at scale who’s at brick-and-mortar and digital on a global basis,” Hornbuckle said. “That’s a unique distinction and it’s not easy. It will take time. Digital gaming domestically is the most reachable thing to turn the lever. With BetMGM we’ve made our bet and put a great deal of cash into that business, and now it’s time to turn up the lever and flow some cash.”
