MGM Profit Beats Estimates on Sports Betting Strength

Digital Gaming Fuels Strong Quarter for MGM Resorts

MGM Resorts International reported a fourth-quarter adjusted profit of $1.60 per share, significantly surpassing the Wall Street consensus estimate of 57 cents. This strong performance was largely driven by the company's robust online sports-betting and digital gaming business.

A Mixed Performance Across Segments

The company's total revenue for the quarter rose to $4.6 billion, exceeding the LSEG analyst estimate of $4.44 billion. The MGM Digital division was a standout performer, with revenue growing 34.6% year-over-year to $188.24 million. However, this growth contrasted with performance in its physical resorts. Revenue from lodgings at its Las Vegas properties declined nearly 9% due to lower prices and occupancy, while retail and entertainment services saw a revenue drop of more than 4%.

Shift Towards Digital Revenue Streams

The results highlight a strategic pivot in the gaming industry, where the expansion of legalized online sports betting is creating significant growth opportunities. For MGM, the success of its digital arm helped offset the softness in non-gaming revenue from its Las Vegas operations, which traditionally accounts for over half of the net revenue in that segment.

Conclusion

MGM's fourth-quarter earnings demonstrate the increasing importance of the digital gaming market. While its traditional resort operations face challenges, the substantial growth in online betting provides a strong pillar for future profitability and indicates a key area for investor focus moving forward.

FAQ

Q: What was the main driver of MGM's Q4 profit beat?
A: A 34.6% year-over-year revenue increase from its MGM Digital portfolio, which includes online sports betting and iGaming.

Q: Did all of MGM's business segments perform well?
A: No, while the digital gaming segment surged, revenue from lodging, retail, and entertainment in its Las Vegas resorts declined.

Source: Investing.com