On its second-quarter earnings call late Wednesday afternoon, the head of MGM Resorts International said he was pleased to see the MGM Grand Detroit casino return to its former glory after a trying 2023.
“Our regions continue to hold top line and operating efficiency and it’s great seeing Detroit finally returned to its earlier prowess in that marketplace post-strike, post cyber [attack] last year,” said Bill Hornbuckle, MGM’s President and Chief Executive Officer.
In the latter half of last year, the leading Detroit casino suffered a workers’ strike that lasted 47 days — two weeks longer than strikes that shuttered Detroit’s MotorCity Casino and the Hollywood Casino at Greektown.
Just prior to the strike, MGM was the only Detroit casino that was a victim of a cyber attack.
This year, the numbers have rebounded for all three casinos. Through June, the trio are, collectively, having their best year since 2019.
“We also have seen a full recovery at MGM Detroit, which we all know faced headwinds since midway through last year,” said MGM’s Chief Financial Officer Jonathan Halkyard.
Last year was a tough one for MGM Grand Detroit, losing more than $30 million
In 2023, the company’s regional operations were down 12% in Q4, with the company attributing a large share of those losses to the strike.
Prior to workers walking off the job, the MGM Grand Detroit was averaging $49.5 million in monthly revenue from slots and table games in 2023. The strike began in October and the casino made just $37.3 million in gambling revenue. That was followed by just $30.6 million in November. Altogether, the loss from the 47 days totaled about $31.1 million below average.
Due to that financial hit, the MGM Grand Detroit finished 2023 with $564 million in revenue from slots and table games. That was down 6% from 2022’s total of just under $600 million.
BetMGM also has rebounded to regain Michigan online casino crown
Things are also looking up for MGM’s online platform, BetMGM, in Michigan.
Earlier this year, BetMGM faced new challenges to its long-held throne as the leading Michigan online casino operator by revenue.
In March, FanDuel surpassed BetMGM for the first time. Prior to that, BetMGM had been top dog in the Great Lakes State for 39 straight months. FanDuel also beat BetMGM in April, but the latter took back its crown in both May and June.
In terms on online sports betting, BetMGM has long been a solid third in Michigan revenue behind FanDuel and DraftKings.
Whereas FanDuel and DraftKings tend to dominate the online space, BetMGM does particularly well in Michigan, making it a key market for the company.
MGM committed to online product, for now, after $1.5 billion investment
On its first quarter earnings call, MGM was more bullish on its online future. It was slightly less so on the Q2 call.
Asked if MGM was considering placing more emphasis on its retail casinos and less on the online product, Hornbuckle said:
“I think what changed in the outlook [from Q1 to Q2] to the extent it was understood is what it would take to get with the right product back in front of people and begin to gain back share for sports… Frankly, if it’s not working, we’re going to pull back. It’s not just, ‘Here is the bucket of money and go, guys.’
“And so we’re going to watch that very closely and very diligently each and every day and make sure those investments are paying off. So I sense and I understand the concern, we all share it, and it’s a key time for the business and for the company in the next six or seven months to see BetMGM begin to perform into that space.”
Later on the call Hornbuckle estimated MGM has invested some $650 million in BetMGM. Adding in the acquisition of LeoVegas and other online-connected companies has pushed that invested about “$1.5 billion all in.”
The goal, said MGM Interactive President Gary Fritz, is for BetMGM to operate its own tech stack.
“Beginning a couple of years ago, we embarked on a journey with the vision of creating our own proprietary iGaming and sports betting platforms,” he said.
That investment requires patience, Hornbuckle said.
“We’re not giving up on digital by any stretch,” he said. “We still believe, it’s a key component of growth, not only within our company, but within the industry. And I think it’s been proven out in several different places.
“We are going to be patient with it for a while.”
Despite record quarterly revenue, MGM stock trading down this morning
Overall, MGM’s Q2 financial report was solid. The company reported record second-quarter consolidated revenue of $4.3 billion — driven by a partnership with Marriott International, a recovery in Macau and continued strength of its Las Vegas properties. Though, the company is not seeing as many bookings in Vegas for the upcoming F1 race as it had hoped.
The earnings call was held after stock markets closed on Wednesday. MGM stock began trading Thursday morning above $40 per share, but was slipping during the morning. It was down 14.5% by 11:30 a.m. to just under $37 — its lowest point since November of 2023.