MGM Resorts International President and CEO Bill Hornbuckle has confirmed that the U.S.-based company may be interested in developing an integrated resort (IR) in Thailand if the kingdom legalizes casinos.
He is less bullish on Macau, which has begun the retendering process for its Big 6 casino concessionaires. Hornbuckle’s enthusiasm for the Chinese special administrative region (SAR), the only place in China where casinos are legal, has been squashed by the impact of Covid-19.
Macau, once the world’s most profitable gaming market, has been hobbled by the pandemic, with tourism almost at a standstill and gaming revenues in the tank.
Hornbuckle made his comments during MGM’s recent second quarter earnings call. The company announced a US$1.8 billion profit for the quarter, aided by record results in Las Vegas. This is in spite of a US$52 million EBITDA loss in Macau, reported GGRAsia.
“Obviously we have a keen interest and will invest several billion dollars in Japan if we are given the opportunity, and that will be another cornerstone for us in Asia,” he said. MGM has applied to develop an IR in Osaka with its Japanese partner, Orix Corp.
“Between that and Macau we feel pretty comfortable with what’s going on there. Obviously we will watch, like everyone, what happens in Thailand—or anywhere else for that matter—but we like where we are and we’d like to be in Japan at scale.”
As for Macau, Hornbuckle said MGM may be unwilling to invest in the market on a grand scale, in part due to China’s strict “zero-Covid” policy, and also because the concession terms have been cut in half, from 20 years to only 10.
“The 10-year window presents some challenges when you think we’re still in the midst of Covid, so the idea of a significant investment would have to be something we would really understand and study,” he said.
Despite orders from Beijing and Chinese President Xi Jinping that Macau reduce its reliance on gaming, Macau Chief Executive Ho Iat Seng recently said that gaming taxes should hold at about 40 percent of Macau’s total government revenue in the future—down from about 80 percent prior to Covid-19.
Ho made the remarks on August 9 at a meeting of the Legislative Assembly. He said the gaming and convention industries “are the main industries in Macau. The gaming tax revenue in the future should not be less than 40 percent of the government’s total revenue, because gaming tax revenue is very important to the government.”
