MGM Resorts “Not Overly Keen” on Chicago Casino Bid, Talks Up Japan and Vegas Instead

  • CFO Jonathan Halkyard said Chicago was “just complicated” and that the tax doesn’t “marry up”
  • A bid from MGM Resorts for the downtown Chicago IRC was seemingly in the cards
  • CEO Bill Hornbuckle said MGM is “still very focused” on pursuing its Osaka casino resort license
  • Q1 2021 saw MGM’s best quarterly operating results in Vegas since reopening post-COVID-19
flag of Japan next to a US flag on masts
MGM Resorts appears to have little interest in bidding for the downtown Chicago IRC, focusing instead on Japan and Las Vegas. [Image: Shutterstock.com]

Comments made during Q1 earnings call

MGM Resorts International chief financial officer Jonathan Halkyard this week appeared to pour ice water on his firm’s bidding for an Integrated Resort Casino (IRC) in Chicago. In a Q1 2021 earnings call Wednesday, he told analysts: “We’re just not overly keen or focused on it at this time.”

Texas was “of interest” but Chicago “is just complicated”

Responding to a question from Truist Securities gaming analyst Barry Jonas about US land-based development opportunities, Halkyard said Texas was “of interest” but Chicago “is just complicated”. He added that, for Chicago, “tax and the notion of integrated resort at scale don’t necessarily marry up.”

The proposed downtown Chicago IRC will include a casino, a hotel with up to 500 rooms, restaurants, bars, entertainment venues, and convention space. Aside from this, the operator that wins the bid will have carte blanche to provide its vision for the IRC’s location and facilities through the request for proposals process.

A bid from MGM Resorts for the downtown Chicago resort was seemingly in the cards, as it was one of three casino operators – along with Wynn Resorts and Hard Rock International – to contribute to the city’s request for information on the process last year.

MGM focusing on Vegas, Japan

According to CDC Gaming Reports, MGM Resorts CEO Bill Hornbuckle said the Sin City-based casino operator’s focus is on getting Las Vegas “back to 100%”.

A transcript of the Wednesday earnings call cites Hornbuckle as stating that MGM was “still very focused” on pursuing its license for a casino resort in Japan. In April 2021, government officials in the Japanese city of Osaka confirmed that a consortium fronted by MGM Resorts is the sole contender for its casino resort license.

MGM first tabled its interest in securing an Osaka casino resort license in May 2019. Despite facing stiff competition from other big players including Wynn Resorts and Las Vegas Sands, MGM Resorts had a strategic advantage. It had established an office in Osaka in January 2019 and also partnered with ORIX, a Japanese diversified financial services group.

Osaka officials, however, have launched an additional request for proposals (RFP) because of a revision made to the Honshu Island city’s Integrated Resort Implementation Policy. On Wednesday, Hornbuckle said MGM-ORIX intends to submit its RFP by the submission deadline in July 2020. He also admitted that the process is “tenuous in some respects” considering Japan’s current COVID-19 lockdown.

Nevada on the comeback trail

During the Q1 2020 earnings call, MGM Resorts noted its best quarterly operating results in Las Vegas since reopening.

MGM Resorts posted consolidated net revenues of $1.6 billion, down 27% on the prior 2020 quarter. The earnings call flagged up that Q1 was negatively impacted by “midweek property and hotel closures, lower business volume and travel activity and ongoing operational restrictions due to the pandemic primarily at its Las Vegas Strip Resort properties.”

we now have a tangible path to bring conventions and entertainment back at scale”

Hornbuckle nevertheless highlighted how “Las Vegas operating results improved sequentially, leisure demand is improving, and we now have a tangible path to bring conventions and entertainment back at scale.”

The CEO’s optimism indicates the uptick in business for casinos in the state. For March, Nevada gaming revenue topped $1bn for the first time since the outbreak of COVID-19 – a 73% year-on-year increase.