MGM expands Macau suites, sees growth opportunities in Japan

As part of a push into premium mass gaming that has doubled the company’s market share since pre-COVID levels, MGM Resorts International plans to launch 124 new “workhorse suites” at its MGM Cotai property in Macau next month, MGM executives said.

The session, held March 12, at the J.P. Morgan Gaming, Lodging, Restaurant, and Leisure Management Access Forum, featured MGM president and CEO William Hornbuckle and chief financial officer Jonathan Halkyard fielding questions from J.P. Morgan analyst Daniel Politzer.

During the session, Hornbuckle highlighted strong post-Chinese New Year performance despite softer luck compared to last year’s first quarter. “Volumes are great and continue to grow,” he said. “I think the expectations we’ve set for the market for the year, particularly, are on track and then some. […] At the top line, we’re all outperforming that.”

Hornbuckle described Macau’s gross gaming revenue as having fallen from a peak near USD45 billion to the low $30 billion range, but he anticipates controlled growth under government oversight.

He also noted that MGM Resorts is blending VIP and premium mass gaming to capture a diverse customer mix in Macau. “It’s both,” Hornbuckle told Politzer.

While highlighting that MGM is converting old junket spaces into VIP and mass premium areas, Hornbuckle remarked that Macau’s gaming market remains a “dog fight,” with steady competition not expected to change soon.

“Premium mass […] has really made a difference,” Hornbuckle said. “We’ve enjoyed a 15% or so share, and I think over time we’ll continue to do that.”

“I think Macau is on a pretty steady path now for the next year or two in the context of the shape of the market,” he added. “I think the market share we see in the mid-teens is fair, and I see that continuing to grow.”

This shift is further bolstered by mid-2025 launches like the Alpha Club and villas converted from three floors of suites targeting premium mass players. “Of our 10 biggest customers there, 6 or 7 of them are considered in mass premium, and the other 3 or 4 are VIP,” Hornbuckle revealed.

Regarding non-gaming projects, Hornbuckle said, “We’ve brought on a show and a theater, a black box, a museum, which has been highly successful,” and indicated that future spending will focus on efficiency as regulatory pressures push to diversify beyond gaming.

“We all are under the obligation to put more money into these non-gaming assets. And so, it will be interesting to see how that gets manifested over the next couple of years. But I don’t think the dynamic of how we’re doing the marketing, casino marketing of note, is going to change,” said the MGM CEO.

Halkyard added, “I think it’s also important to point out that while the competitive landscape for our properties in Macau is really important […] what’s equally important is our relationship, MGM Resorts with that company,” emphasizing MGM’s 56% stake in MGM China.

The CFO highlighted a “rock-solid balance sheet” at MGM China – with low leverage and strong free cash flow. Branding fees there also recently rose to market rates, bolstering parent company cash flows.

“Those roughly $250 million a year […] are very solid cash flows for our shareholders,” said Halkyard.

Shifting to Asia expansion, executives touted Japan as a career-defining bet. Hornbuckle compared Japan’s 120 million population to Macau’s 6 million, noting its proximity, just 1.5 hours from Shanghai and Beijing. He also noted that Japan’s pachinko industry exceeds $30 billion annually, signaling demand.

MGM allocates $450 million in equity this year to its Osaka integrated resort, outpacing prior pledges and rivaling Singapore’s Marina Bay Sands. “If it just manifests itself what’s going on today in Singapore, if we start with a $2 billion cash flow business, we’re going to net about $800 million given our stake,” the CFO said.

Opening by 2030, the project prioritizes upfront bank funding, with construction wrapping by late 2028.