MGM Resort International Excutive Summary2 - MGM Resort International Executive Summary 2 MGM Resort International Yanbin Lu BUSA 499-02 Dr Kory Brown

MGM Resort International Excutive Summary2 - MGM Resort...

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MGM Resort International Executive Summary 2 MGM Resort International Yanbin Lu BUSA 499-02 Dr. Kory Brown
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MGM Resort International Executive Summary 2 MGM Resort International is a reputable Fortune 500 global hospitality company, operating a diverse portfolio of resort brands, which divided into two segments: Wholly Owned Domestic Resorts and MGM China. Its Wholly Owned Domestic Resorts owns and manages 15 resorts in Mississippi, Nevada and Michigan in the United States. Mainly, MGM Resorts provide leading entertainment service through its famous casino resorts on the Las Vegas Strip. Meanwhile, MGM also have the exclusive rights of Cirque du Soleil shows. In the international segment, MGM owns 51% of MGM China Holding,
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MGM Resort International Executive Summary 2 which operates MGM Macau. MGM also operates MGM Grand Sanya on Hainan Island in China and MGM Grand HoTram in Vienam through MGM Hospitality. The primary business of MGM is the ownership and operation of casino resorts, which includes gaming, hotel, convention, dining, and entertainment. MGM’ revenue is heavily based on the cash that customer spend in gaming service and non-gaming entertainment. In the Wholly Domestic Owned segments, Casino revenue slightly increases 1% in 2015 compared 2014. Room revenue increased 6% in 2015 compared to 2014. In the MGM China segment, net revenue decreased 33% in 2015 compared to 2014 due to the decrease in VIP table games revenue of 44%. As a result, the total net revenues for 2015 decreased 9% compared to 2014 because the decrease in casino revenue at MGM China. Chinese government’ anti corruption campaign has a big impact on the decrease of the casino revenue in Macau. Just a year ago, Macau gambling revenue increase to $4.76 billion, which is about 3 quarters of the Las Vegas Strip made in entire year. Now, the 2015 gambling revenue in Macau decreased 49% compared to 2014 because of Xi’s anti corruption plan. As casino revenue in Macau contributes as a key factor to the total net revenues of MGM, MGM needs to diverse its self into online gaming industry. Casino gaming industry is heavily based on the land using and location to attract the customers. MGM faces the intense competition of its rivalry Las Vegas Sand and Wynn’s in Strips. Meanwhile, MGM also is competing with the tribal casinos, which has 489 casinos in 28 states. Despites the luxury services provided by casinos in Las Vegas, gamblers are also willing to go to tribal casinos because tribal casinos are easier to get to. In Washington State, there are 39 Indian casinos located in 16 counties. Customers don’t
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MGM Resort International Executive Summary 2 have to travel to Las Vegas or Atlantic City to enjoy their time. Especially in the Las Vegas’ low travel season, gamblers are more willing to go to local casinos. Tribal gaming makes $28.10 billion in 2015. The return on MGM’s biggest international investment in Macau also seems not promised due to Chinese’s anti corruption campaign’s negative impact on Macau market. In 2014, online gaming is legalized in Nevada, New Jersey and Delaware. Global online gambling is growing at 11% a year with the currently market
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  • Spring '15
  • CatherinePratt
  • Las Vegas Strip, MGM, MGM Resort International

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