The operator introduces the MGM Resorts International Third Quarter 2023 Earnings Conference Call and announces the company's CEO, COO, CFO, President and COO of MGM China, and Director of Investor Relations as participants. The call will be recorded and can be accessed online. The company will make forward-looking statements and discuss non-GAAP financial measures. The CEO thanks everyone for joining and highlights the company's record consolidated net revenues in the third quarter.

Despite facing disruptions and a cybersecurity issue affecting certain systems, the company achieved record same-store revenues in Las Vegas and regional net revenues in the third quarter. The issue has been resolved and the company expects insurance to cover the losses incurred. The company's employees showed resilience and professionalism during this time and the company is focused on maintaining a culture of exceptional service. The company is also negotiating with unions in Las Vegas and Detroit for new contracts.

Caesars Entertainment is currently in negotiations for a collective bargain agreement in Las Vegas and expects to reach a deal today that will include a significant pay increase for employees. The company is also preparing for the inaugural Formula One race next week, which is expected to be a successful event. Looking ahead, Caesars is seeing strength in future bookings and group pace, with various tailwinds such as the launch of Marriott's direct bookings and the return of international players. The company is also investing in updates and enhancements at its existing resorts.

MGM is seeing strong growth in its domestic operations, is well-positioned to obtain a gaming license in New York, and is experiencing record revenues and market share in Macau. The company remains focused on optimizing its casino floor and catering to mass and premium mass customers, and is making progress with its BetMGM sports betting platform in the U.S. and digital efforts in the U.K.

MGM is launching in the U.K. market and initial results are positive. They will utilize their recent acquisition of Push gaming to bring innovative games to the U.K. and other international markets. In Japan, they have received the green light to begin their project in Osaka, with an expected equity contribution of $2 billion. In New York, they are preparing to submit their application for a gaming license and believe they are a strong contender. In Dubai, their partner is constructing a luxury development with MGM brand hotels, and they see potential for gaming legalization in the future.

The company believes they have the best gaming hospitality brands and location in Dubai, and their existing project may include a world-class gaming component. They expect to launch a strategic relationship with Marriott in 2024 and have launched a landing page for it. The stability of their domestic business and focus on margins will be supplemented by BetMGM's profitability and opportunities in Macau. They also have long-term drivers for cash flow generation, a strong balance sheet, and a share buyback authorization. The company's CFO commends the efforts of their employees during a recent cyber security issue and mentions an estimated impact of $100 million on their adjusted property EBITDAR in September.

In the third quarter, MGM Resorts experienced a significant impact on revenue due to room cancellations in Las Vegas and efforts to recover from the cybersecurity issue. However, they expect the impact to be limited in the fourth quarter. The company generated $4 billion in net revenues, with significant contribution from MGM China. Net revenues in Las Vegas were down 8%, but saw a recovery in October. The company is still negotiating a new collective bargaining agreement with the Culinary union.

The paragraph discusses the impact of a cybersecurity event on the company's financial results and negotiations to offset potential labor costs. It also provides an update on the company's performance in different regions, including a 23% increase in adjusted property EBITDAR in Macau. The company's BetMGM division is also expected to achieve its forecasted revenues for the year. The paragraph also mentions an anticipated increase in corporate expenses for the fourth quarter due to various factors such as incentive fees, IT and cybersecurity expenses, and integration costs.

The company plans to commit approximately $2 billion over the next five years for development in Japan and for a new project in New York. They expect to fund these projects through free cash flow and are focused on growing EBITDAR and margins. The company also plans to buy back shares and is seeing positive changes in the market, with strong performance in Macau and upcoming events in Las Vegas.

In this paragraph, the speaker discusses the company's market share and plans for future growth. They mention their success in the suite product market and their plans to continue improving it. They also highlight the potential for development in Japan and New York, as well as the potential of their 180 million Bonvoy members. The speaker also mentions their strong balance sheet and the opportunities it provides for future investments. They then address a question about the Mandalay Bay Convention Center and its potential impact on group bookings for the upcoming year. The speaker also briefly mentions the company's involvement in F1 racing.

The Red Rock guys have lowered their expectations for F1, but Caesars estimates it will bring in an incremental 5% of quarterly EBITDAR. Caesars has sold over 10,000 tickets and expects to make $60 million in hotel revenue for the weekend. There have been challenges, but long term, F1 will be a big winner for the company and the city. Caesars and their properties are fully prepared for the luxury event.

The speaker is confident about the company's upcoming event and future business opportunities. They mention the Super Bowl, Formula One, and an NFL team as key factors for success. They also mention that the company has learned a lot during COVID and has seen an increase in market share and mix. They believe that the partnership with Marriott will be beneficial. The speaker is also aware of challenges such as wage and insurance pressures but is confident they can overcome them.

Shaun Kelley from Bank of America asked about the high table hold in Las Vegas, specifically in baccarat, and its impact on the company's EBITDA. He also asked if there were any changes in game math or theoretical numbers that could explain the consistently higher holds. William Hornbuckle mentioned the increase in domestic baccarat business and the popularity of certain bets with a high house advantage. He also noted a shift in the market from international to domestic players and a concentration of high-end customers. Jonathan Halkyard declined to give specific financial details related to the hold swings in the domestic business.

Shaun Kelley asks a question about the domestic margins of the company, specifically in regards to the impact of hold, cyber incident, and union accrual. Jonathan Halkyard agrees that the margins were affected but still performed well when adjusted for these factors. He also mentions that the impact in Las Vegas was about 200 basis points and less severe in the regions. Despite labor cost increases, the margins were still in the low 30s, which is a good performance. Shaun Kelley asks a follow-up question.

The speaker asks about promotional levels in Macau and how they are affecting the company's performance. The speaker also asks about the competitive climate and margin structure in the premium mass market. The company's representative responds by saying that the market remains rational and their own reinvestment stays stable. They also mention the impact of events and concerts on the market. The next question is about the company's thoughts on leverage and returning capital. The company's representative says they think about it a lot and currently their leverage is about three and a half times on a lease-adjusted basis.

The speaker discusses the company's leverage cap and potential for taking on additional financial leverage to enable further share repurchases. They also mention the Board's decision to prioritize returning cash to shareholders through share repurchases rather than dividends. In regards to the recent cyber-security incident, there may be investments in IT infrastructure and potential changes to the company's cost structure.

MGM Resorts' William Hornbuckle discusses potential costs for next year, including a $30-40 million capitalization for IT upgrades and a 10-20% increase in operating expenses due to wage increases and insurance costs. However, he believes these costs can be overcome, especially in Las Vegas. In the long term, there is uncertainty about the legalization of gambling in Dubai.

The speaker discusses the decline in Vegas and mentions that $80 million of the $91 million decrease in EBITDA was due to a cyber issue. The remaining $10 million decrease is attributed to other factors, but no specific details are provided.

The speaker discusses the factors that can affect gaming results, such as programming, and mentions that the third quarter of 2022 was an all-time high. They also mention the level of repurchase and clarify that their position on international iGaming opportunities has not changed. They are still looking to expand internationally, with a focus on the UK, Brazil, and other European countries, as well as the recent acquisition of a content business. Gary Fritz is leading this effort.

Robin Farley asked if MGM Resorts will invest equally with its partner in the BetMGM joint venture, and William Hornbuckle confirmed that they will. He also mentioned that they have made improvements to their sports product and are excited about the acquisition of Angstrom for odds and the upcoming launch of single wallet in Nevada. The amount they plan to invest will not be large, but they are aiming for long-term value by the end of 2025.

The company is confident in its investments in iGaming and will continue to protect its position as the top player in the industry. There has been strong demand for Super Bowl bookings, particularly from corporate America. The macro environment has not had a noticeable impact on the company's markets, but there may be potential concerns about margin for the regional market.

The speaker is confident that Macau's recovery will continue, as the government has forecasted a GGR of $27 billion for next year. While there may be some economic softness in China, Macau is not reflective of the overall spending patterns in the country. Macau caters to around 30 million visitations a year, with a unique visitation rate of less than half of that, making it a small portion of China's population.

The company caters to the middle and upper class in China and is positioned to capture the high-spending group. There may be inflationary impacts in the US, but the company has initiatives in place to minimize the impact and maintain margins.

The speaker is confident that they can hold the line on costs aside from labor costs. They discuss the potential impact of the Marriott strategic partnership and its expected launch in 2024. They believe that the partnership will bring in significant revenue, particularly in the third and fourth quarter of next year. They also mention the potential for increased revenue during Lunar New Year and Super Bowl in 2024.

The speaker discusses the potential impact of international box play on the company's upcoming event, which coincides with the Super Bowl. They mention an increase in international back play and the uncertainty of its impact due to the last-minute nature of bookings. They also mention plans to maximize both events and provide an update on a potential expansion on the south end of the strip.

The speaker discusses a petition in Nevada to slow down construction on a new project, and mentions a design he saw which he found impressive. He also mentions plans to invest in their legacy brand and make improvements to the intersection where it is located. He believes the project will be successful and expresses excitement for the upcoming racing event. He thanks the staff for handling a recent cyberattack and concludes the conference.

This summary was generated with AI and may contain some inaccuracies.