Table of Contents
MGM Resorts International is one of the largest hospitality and entertainment corporations in the entire world. MGM experienced a tremendous dip both in revenue and stock value during the pandemic. They have since rebounded to levels higher than ever in the past 10 years. Much due to the US’s new COVID policies, its domestic casinos are doing better than the biggest international resorts.
MGM properties aren’t limited to its native US. There are two major facilities already operating in Macau, as well as in mainland China. They have also recently sold off minor casinos in Australia and Vietnam. Now, they have their eyes set on building new resorts grander than anything we’ve ever seen. In this article, we will reveal their ambitious plans and what they mean for the industry.
MGM Have Serious Plans For Osaka, Japan
For many years, all forms of gambling were illegal in Japan. Now, that has changed. The government released new regulations in December 2020. That was the first step that allowed 9 gambling games to be legally available to the public. They include all-time casino favorites such as poker, slots, and roulette. There are many more regulations to come, and they will certainly propel the industry forward. The most important thing is that the gates for casinos in the country are now open.
In response to this, the Governor of Osaka Prefecture, Yoshimura, expressed his intention to push a new local implementation policy in January 2021. Due to the spread of the pandemic, the Integrated Resort (IR) plan of Osaka Prefecture has been delayed considerably. After some uncertainty, the local government and MGM finally made an agreement in September this year.
MGM was one of the first corporations to express an immediate strong interest in entering the Japanese market. According to Keita M, the editor of a local blog casinosnavi.com, MGM casino in Osaka aims to be the best IR facility. It’s a perfect opportunity for an overseas expansion for the ambitious corporation. Japan is an excellent choice when it comes to launching a new facility.
Casinos In Chicago
The State of Illinois has joined the ranks of the few in the country that now legally allow casinos to operate in the United States. As soon as that happened, Chicago Mayor Lori E. Lightfoot took the first steps to make sure the first casino open in the city as quickly as possible. The rationale behind it is of course financial. A new casino in town will quickly make up for any budget deficits accrued during the pandemic, and they aren’t small by any means.
Not only will a casino bring substantial tax revenue to the state, but it will also boost the city’s economy in a lot of ways. Thousands of jobs while building the facilities, thousands more when they are operating. Increased tourism will bring a lot of money on its own, and the city’s businesses will have plenty of room for expansion.
It will still take years down the road for the casino to be built. Chicago is still at the proposals stage, with multiple competitors, including MGM, bidding for the city’s first casino. However, the most recent news we have regarding MGM here is negative. Supposedly, they are reluctant to proceed because of the high 40% tax rate on casino revenue in the state.
They still have time to reconsider and make some sort of agreement before September 2022. It’s a good opportunity for whoever gets the project, but the personal economics are up to MGM to decide. Online casinos are outlawed in the state, so there won’t be much competition. People can play in them, easily bypassing geo-blocking, but it doesn’t make them any more legal. Thus, the majority of the money will concentrate in the newly built land-based casino,
Domestic Opportunities
MGM National Harbor is the first casino in Maryland that now features sports betting . It’s also first by total gaming revenue, and unsurprisingly so. Of all the 15 land-based casinos in the state, it’s the most popular one. Opened up in 2016, it has had a good run so far. The corporation is planning a major expansion for this one, and it will undoubtedly bring them even more profits.
In the United States, MGM is without a doubt the biggest player in the casino industry. They operate nine casinos on the Las Vegas Strip. More than two of the other main competitors, Caesars Entertainment and Las Vegas Sands, combined. While Sands have a bigger worldwide market capitalization, due to their immense success in Asia, MGM were able to maintain profits better during the pandemic.
MGM are now finalizing their sale of the famous Bellagio casino in the Strip. The speculation is that they are doing this to diversify their casino portfolio, as they now have many more lucrative opportunities both in-country and worldwide. Considering their total domination in Las Vegas, one less property won’t hurt revenue much but it will provide the necessary funds for new avenues for growth.
Closing Thoughts
While MGM is fifth by market cap worldwide and second in the United States, they were first in revenue both in 2020 and 2021. When the pandemic hit, MGM was the company that persevered and thrived the most compared to the competition. The now fertile ground of gambling is theirs to take, and we are certain that they will succeed.
The past two years have been incredibly difficult for international casinos, especially the ones in Europe and Asia. Since the United States were nowhere near as restricted, MGM made much more money than it’s competition. With that forward momentum, they can begin their expansions domestically and internationally at the same time.