Casino companies around the US continue to face difficulties bringing in players. It’s an ongoing issue that’s led to a major drop in revenue for almost an entire year. A new MGM Resorts revenue report has just surfaced showing the company experienced an astounding 53% dip in earnings during 2020’s fourth quarter.
It’s disappointing news for one of the country’s most powerful casino operators. Today, we’ll take a look at how much money MGM managed to bring in in 2020’s Q4. We’ll also discuss what has led to the large decrease in gaming revenue.
Let’s get into it!
Major Casinos Continue to Work on Money-Saving Strategies
Casinos around the United States are still being dealt bad hands. Most of them continue to operate at limited capacity and are seeing very low numbers of players. It’s no surprise when considering the intense regulations set in place in many of these venues.
There’s no true end in sight with this situation. Major casino hubs such as Las Vegas need travel to resume around the world. Until that happens, the casinos that operate in the city will struggle to increase their gaming revenue.
All casinos are doing what they can to cut down on costs right now. Many of the biggest ones in Las Vegas have chosen to shut down for certain days of the week. That includes The Venetian and the Encore Las Vegas.
Some casino companies have completely shut down their properties. Station Casinos, for example, hasn’t opened the popular Palms Casino-Resorts since its initial shut down back in March. CEO Frank Fertitta claims this venue will remain closed until a clear positive cash flow can be established.
Some of these companies seem to be faring better than others. The ones operating major sports betting platforms are bringing in some much-needed revenue right now. It could be years before things reach pre-pandemic levels, though.
MGM Resorts remains one of the world’s biggest casino companies. We’re now beginning to hear how MGM fared throughout the final months of 2020.
The Latest MGM Resorts Revenue Report Has Just Come Out
MGM Resorts owns and operates a huge number of major casino-resorts around the world. That includes some of the biggest in the city of Las Vegas. It was one of the companies worst-affected by the casino shutdowns back in March of last year.
By summertime, MGM had opened up many of its properties around the country. Reopening didn’t solve everything, however, as visitation rates inside the company’s venues remained low. As the health crisis worsened, these rates dropped even further.
This week, MGM Resorts revenue report for the fourth quarter of 2020 was released. According to the financial statements, this company saw an astounding 53% dip in its revenue over the months of October, November, and December. Operations in Las Vegas proved to be a major cause for these declines.
The company’s revenue in Las Vegas fell by 66%. Over in Macau, MGM Resorts saw a 58% decline. The other casinos owned by MGM around the US saw a drop of 34% when compared to the same months in 2019.
MGM points toward a major drop in weekday stays in Las Vegas as a reason for its revenue declines. Net revenue dropped to $1.5 billion in 2020’s final quarter. That’s a significant dip from the $3.2 billion seen just a year prior.
There is reason to be optimistic about casino revenue in 2021. Here’s what could lead to increases in revenue throughout this year.
When Will Casino Revenue Begin to Surge Again?
Essentially all of the casinos around the United States are desperate right now. Travel regulations are as intense as ever before, meaning tourism to hubs such as Las Vegas remains low. The owners of these venues are attempting to predict when revenue will begin to increase again.
Some analysts believe we’ll see a big turnaround by the time summer comes. Vaccine distribution is increasing each month. With enough time, travel is likely to increase and casinos will start seeing a steady increase of visitors.
Does that mean things will get back to the way they were in 2019? It’s unlikely to happen anytime soon. There is still a long way to go before the travel and gaming industries are back to normal.
Some even feel things will continue to get worse for the country’s casino companies. With new variants emerging, some believe the US will decide to implement restrictions for domestic travel. That could prove devastating for casino hubs.
Only time will tell how long it takes for the US casino industry to bounce back. We’ll be sure to offer more updates on this situation over the next few months!
Are you surprised by this new MGM Resorts revenue report? When do you expect gaming revenue to begin surging again? Let us know in the comments section below!