When making difficult calls on investing in new properties, CEO Bill Hornbuckle believes that MGM Resorts is taking a disciplined approach to capital allocation with an eye on how to best position the company for the future.
During a third-quarter earnings call marked by similarly soft Las Vegas results seen by other operators , Hornbuckle cited MGM’s decision this month to withdraw from New York’s casino bidding war as one indicative of the strategy. A presumed frontrunner for a hotly contested downstate New York casino licence, MGM pulled out in a move unforeseen by many industry insiders. With New York in the rear view mirror, MGM is squarely focused on its new integrated resorts abroad, namely in Japan.
Hornbuckle made the comments on Wednesday evening in a call with Wall Street analysts. The CEO of MGM Resorts tried to remain optimistic after MGM shares fell sharply in the after-hours session amid continued struggles in Las Vegas. Hornbuckle pointed to several factors for the slowdown, including a dip in international visitation, Spirit Airlines’ bankruptcy and customer frustration over traffic from Southern California.
“While we don’t expect the dynamic to be changed overnight, we are proactively working to create initiatives and draw incremental visitation,” Hornbuckle told analysts.
Softness in Vegas drags MGM earnings
The sub-par Nevada figures did not surprise analysts, given similar trends on the Las Vegas Strip over the previous quarter. Las Vegas has seen declines in tourism for the majority of 2025, as macroeconomic uncertainty has led to a tightness in discretionary spending among customers.
In September, Strip visitation declined 8.8% year-over-year to approximately 3.1 million, the Las Vegas Convention and Visitors Authority said on Wednesday. It marked the ninth consecutive month that volume on the boulevard declined.
Earlier this week, Caesars expressed concerns on occupancy, which fell about 5% on the quarter to 92%. Caesars CEO Tom Reeg attributed the decline primarily to weakness in city-wide visitation. At the same time, Reeg cited the company’s poor table handle across the Strip for the depressed results. Hold percentage at Caesars’ Vegas properties sank to its lowest in more than three years, he said.
MGM experienced similar challenges throughout The Strip.
MGM Q3 by the numbers
- Across the Strip, MGM generated revenue of $2 billion, down from $2.1 billion in the year-ago quarter. MGM attributed the decline mostly to a room remodelling programme at the MGM Grand that concluded this month. MGM cited the renovations in July as a factor for reduced EBITDA in Las Vegas.
- MGM also attributed the lower third-quarter figures to a decline in food and beverage revenues, lower table hold and lower revenue per available room (RevPAR), a key industry metric. MGM’s table win percentage on The Strip fell from to 22.6%, down from 23.7% in the third quarter of 2024.
- As a result, the segment’s adjusted EBITDAR fell to $601 million, compared with $731 million in the same quarter in 2024.
- MGM also referenced a decrease in business interruption proceeds that amounted to $14 million, along with an an increase in general liability and workers’ compensation insurance expense of $13 million.
A New York state of mind no more
Predictably, analysts opened the question-and-answer portion of Wednesday’s call on MGM’s decision to exit the New York bidding process. Hornbuckle noted that MGM Empire City reached a tentative agreement with the City of Yonkers that would have resulted in a minimum tax contribution of at least $400 million. While MGM did not disclose its proposed tax rates, applicants were required to set a minimum rate of 25% for slot machines and 10% for table games.
Fellow bidder Resorts World NYC established floors of 56% for slots and 30% for table gambling. Hornbuckle indicated that newly issued state guidance on the duration of the licence prompted MGM to reconsider its bid. Based on the proposed tax rate submitted per applicant, the policy gave the New York Gaming Facility Location Board the latitude to award a bidder with a 15-year licence rather than the 30-year version that MGM originally expected.
“While we initially liked the return, it got tighter and tighter so much so that given overall market conditions, we think it’s capital best spent in some other location and some other opportunity.” – MGM Resorts CEO Bill Hornbuckle
The decision to withdraw its New York contributed to a non-cash goodwill impairment charge of $256 million, MGM said. The withdrawal also led to an expense of approximately $93 million in non-cash write-offs related to MGM Empire City, according to the company.
Company moves on to Japan project
MGM is turning to other endeavours, specifically its MGM Osaka resort, projected to open in 2030. The $8.9 billion project served as a hot topic at Expo 2025, a renowned conference that just concluded on the prefecture.
MGM noted that it has entered into a US$300 million denominated credit facility to support its funding of the resort. The facility, which has an interest rate of 2.5%, can be upsized to $450 million, said chief financial officer Jonathan Halkyard. MGM has already received incremental interest, he added.
MGM stock moves after earnings report
For the three-month period ended 30 September, MGM generated net revenue of $4.3 billion, slightly topping forecasts of $4.2 billion. MGM has eclipsed revenue estimates in each of its last four quarters. However, MGM reported earnings per share of $0.24, down considerably from $0.54 in the year-ago quarter. MGM fell short of per-share targets from Zack’s Consensus Estimate of $0.37.
In Wednesday’s after-hours session, MGM fell sharply by 8% to $28.70 per share. MGM pared some of the losses on Thursday, trading near $31 a share. However, MGM is down more than 10% year-to-date.
A popular subject on the call centred on a potential buying opportunity for investors since several MGM executives view its stock as undervalued. Hornbuckle pointed to BetMGM as a lever to unlock value, while Halkyard alluded to conditions in Las Vegas.
“We have a better cost structure than we’ve ever had in Las Vegas,” Hornbuckle said. “With the dynamism in this market, I think that that’s an unlock for the stock.”
Barry Jonas, an analyst with Truist Securities, lowered his price target on MGM slightly to $47 per share. Despite the hit from Las Vegas, MGM’s diversification from its digital, regional and China segments offer “support” to the stock, according to Jonas, who sees room for “material upside” should the Vegas segment inflect.
Macquarie analyst Chad Beynon reiterated an “outperform” rating on MGM in part because of its balance-sheet strength. Beynon also lowered his MGM price target on revised estimates, cutting to $45 a share.
The MGM Resorts CEO maintains steady focus as stock slumps in response to Vegas tourism woes and New York bid withdrawal.