Weakness in Vegas at MGM Resorts offset by strong second quarter from BetMGM

Despite continued difficulties in visitation on the Las Vegas Strip, MGM Resorts still managed to beat analysts’ expectations in the second quarter with help from solid performance by BetMGM and the company’s China properties.

For the three-month period ended 30 June, MGM generated net revenue of $4.4 billion, topping forecasts of $4.31 billion. On the quarter, MGM Resorts recorded the company’s highest-ever consolidated net revenues, buttressed by record output from regional operators.

Overall, MGM reported earnings per share of $0.79, exceeding consensus per-share estimates of $0.58. The company achieved the earnings beat in spite of a down period on the famed Strip thoroughfare. Visitation across the city plunged by 11% in June, the Las Vegas Convention and Visitors Authority reported on Wednesday.

MGM Resorts CEO Bill Hornbuckle blamed the subpar Las Vegas figures on continued renovations at MGM Grand, which is undergoing a $65 million facelift. Hornbuckle indicated that the company experienced a $40 million negative impact in the first half on restorations that will run through October. Among MGM’s Vegas properties, second-quarter EBITDAR came in at $711 million, down $72 million from the year-ago quarter.

“MGM Resorts’ operational scale and diversity delivered solid growth in the second quarter,” Hornbuckle said in Wednesday’s prepared remarks. “I want to take this opportunity to emphasise that Las Vegas remains fundamentally solid. MGM Grand accounted for over 80% of the decline, where results were impacted by a uniquely disruptive room remodel.”

Efficient player targeting at BetMGM

Hornbuckle highlighted a strong quarter for BetMGM, MGM Resorts’ online gaming venture with Entain. The executive described BetMGM as a “near-term catalyst” for the company, with solid growth in average monthly activity and in active player days in iGaming. In online sports betting, Hornbuckle pointed to retention of valuable players, efficient acquisition of new players and tighter management of lower-value players as drivers for first-half profitability.

BetMGM reported first-half EBITDA of $109 million, swinging to a profit after reporting a loss of $123 million in the first six months of 2024. Hornbuckle is confident the venture can reach its long-term target of $500 million in annual profitability.

Models from Citizens imply that BetMGM can achieve the target in 2028, assuming the venture delivers double-digit revenue growth the next two years and operating leverage in line with the rest of the industry.

Hornbuckle’s comments came one day after BetMGM held its 2025 first-half business update. In a conference call with equities analysts, BetMGM CEO Adam Greenblatt discussed the ancillary benefits of the venture’s refined approach to player targeting.

Right-sizing reinvestment rates

BetMGM pinpointed the impact of artificial intelligence and other analytical tools to identify bettor tendencies at an earlier stage of the customer life cycle. The tools have enabled its product team to identify the value of players in each cohort and “right-size the reinvestment” amounts more quickly, according to Greenblatt. Equally important, the new analytics have enabled BetMGM to avoid investment in unprofitable players.

“This improved capability and approach really started back last fall and we’ve been refining it all the way through 2025,” Greenblatt said. “The results, frankly, speak for themselves.”

BetMGM CFO Gary Deutsch echoed Greenblatt’s sentiments. The venture received a larger mix of high-margin bets with low staking, he noted, along with an uptick in VIP play. BetMGM, however, fell behind Fanatics in second-quarter market share. Based on data from 14 key states analysed by Citizens, BetMGM reported a quarterly share of 6.2%, trailing third-place Fanatics (market share of 7.6%).

Lobbying to repeal change in gambling deductions

Hornbuckle concluded the quarterly earnings call with an update on lobbying efforts to repeal a controversial tax change in US President Donald Trump’s “One Big Beautiful Bill”. The legislation will cap the amount of deductions gamblers can write off in a federal tax return to 90% of their annual losses. Several congressional members, led by Nevada Rep. Dina Titus, are pushing to remove the amendment on the grounds that it unfairly punishes professional gamblers.

Hornbuckle indicated that he met with the chairman of the House Ways and Means Committee last week in Las Vegas and was joined by Caesars Entertainment CEO Tom Reeg and Wynn Resorts CEO Craig Billings. The triumvirate attempted to make their case for the removal of the amendment before it takes effect in 2026.

For the quarter, MGM China reported record adjusted EBITDAR with a year-over-year increase of about 3%. MGM China COO Hubert Wang appears encouraged by trends among customers defined as the “premium mass”, a cohort of gamblers who are not VIPs but still wager considerably higher than the average bettor.

“Our focus on premium mass is not going to change,” Wang said.

As of noon ET Thursday, MGM Resorts traded around $36 a share, down about 4% in the day’s session. MGM is still up approximately 40% since falling to three-year lows in April at around $25 a share.