MGM Resorts International has released its third-quarter results, highlighting significant revenue growth in its BetMGM unit. The company also remains dedicated to repurchasing shares across its casinos and establishments.
The gaming giant reported a 5% year-over-year increase in revenue, reaching $4.2 billion, courtesy of a strong performance from its BetMGM China unit. However, adjusted earnings per share tanked slightly to 54 cents from last year's 64 cents.
MGM's magic wand also seems effective on the Las Vegas strip. While most competitors had a tough year-over-year comparison, the company's revenue grew a percent higher in 12 months, totaling $2.1 billion in the third quarter. Its adjusted earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs (EBITDAR) rose from $714 million to $731 million.
The company's regional performances were also great, as its casino sales moved from $925 million to $952 million. Their adjusted EBITDAR grew by 2%, rising from $293 million to $300 million. This growth helps alleviate concerns about weaknesses in certain regional areas.
BetMGM, a joint venture owned by MGM and Entain Plc, was one of the best-performing US casinos in the third quarter. While it trails bigger sports betting behemoths like FanDuel and DraftKings, its iGaming appeal has become a force to reckon with.
The gaming company confirmed its growth in a statement. “Accelerating growth at BetMGM with record 3Q net revenues increasing nearly 20% year-over-year, more than doubling the revenue growth achieved in 2Q”
BetMGM plans to focus heavily on its iGaming delivery to compete against FanDuel and DraftKings for a place in the industry. iGaming and online games have better profit margins than sports betting and will help the gaming company control a part of the US gambling market.
Only seven states, including Delaware, Connecticut, New Jersey, Rhode Island, Pennsylvania, West Virginia, and Michigan, allow iGaming. This number is sure to grow as many states are keen to increase their revenues.
No company has been as committed to purchasing its own shares as MGM in the past few years and it is not slowing down anytime soon.
Jonathan Halkyard, CFO of MGM confirmed the continuity of the trend in the third quarter. "During the quarter, we returned over $300 million to shareholders through share repurchases, bringing our year-to-date total to approximately $1.3 billion."
MGM has slashed its share count by 40% through repurchase since 2021. It closed the third quarter with $944 million in free cash flow, and its relatively low debt and strong liquidity position continue to support ongoing buybacks