The CEOs of Wynn Resorts, Sands and MGM Resorts International said they were optimistic about the future of Las Vegas and international gaming in spite of rising inflationary pressures in the US and Covid restrictions in other parts of the world. Craig Billings (Wynn), Robert Goldstein (Sands) and Bill Hornbuckle (MGM) made the remarks in the context of the CNBC Evolve Global Summit, held on Wednesday.
The US industry and inflation
“Is there a recession around the corner? Time to tell. You wouldn’t know by looking at this place last night, or what we’ve experienced over the last couple of quarters,” Hornbuckle told host Contessa Brewer in regards to the US. “But I’m extremely optimistic about the space, about the experience economy, and where we belong in it. I’m very positive, generally speaking.”
Billings agreed with this take, while explaining the importance of continued investing during the Covid period, which is now allowing Wynn to reap the fruits of those efforts. However, the landscape is different for Goldstein’s Sands, which finalized the sale of its Vegas properties earlier this year and is now Asia-bound, with its Macau properties at the forefront. The company is now seeking to leverage its presence in that city and in Singapore, and “maybe again in the U.S. at some point.”
But while Covid-19 has heavily impacted the gaming industry in many areas, in particular Macau operations, Hornbuckle also described it as an opportunity. “Technology and Covid drove us to a couple of different places,” he explained. “The way we position games just for distance and safety. But we create these unique pods that sit out here now. Well, guess what? People enjoy them.”
According to MGM’s CEO, new games are also bringing millennials to the table “in a way that they have not been before” in the industry. “We have seen historically, not only here, but universally across all of our properties domestically, we have more millennial business than we’ve ever had by like 20%,” Hornbuckle stated. “It is a compelling and interesting thing.”
Bill Hornbuckle
For Billings, the younger demographic is being lured to gambling through the proliferation of sports betting and iGaming. Coupled with the investments the industry is making in Vegas into non-gaming amenities, these factors are “going to come together” and have a spillover effect that is going to cause some consumers to find an affinity for what’s on the casino floor.
While the land-based experience remains a crucial draw, the CEOs also remarked on the importance of online gaming within their operations by allowing their brands to connect with the player daily and outside the casino. “It gives us a chance to have a constant dialogue with a customer. It gives them exposure and ultimately a reward mechanism,” noted Hornbuckle.
“This thing has grown to a point where there is absolute connectivity – the notion of a simple omnichannel relationship with the customer,” the CEO added. “And what we have all seen is to the extent a customer participates in all three activities [sports betting, iGaming, land-based casino], their activity with us is far superior to what it was historically.”
While the new opportunities in sports betting drove brands to compete to get to market and to acquire customers at any cost early on, Billings said the industry is now “becoming increasingly more disciplined” in terms of how they approach that. His remarks are not coincidental, especially given Wynn Interactive was described as “struggling” with stiff taxes and costly promotions to lure customers at the start of the year, with rumors of a potential sale.
Craig Billings
Speaking of future plans within online gaming and sports betting, Hornbuckle stated BetMGM’s -the joint venture for this space between MGM and Entain– ambitions to expand its footprint beyond the US, into Canada “and ultimately the rest of the world.”
Returning to the US land-based market, Hornbuckle admitted macroeconomic trends may pose a threat to the industry, even if it is currently doing well, particularly in Las Vegas. “We’re not naive to think that consistent gas prices, consistent increase in inflation is not going to impact our business,” he said. “It hasn’t yet.”
For Billings, Las Vegas is now “better prepared” for the future because of Covid, which taught businesses to know the levers they need to pull to make it through headwinds.
Macau and international gaming
Sands’ relationship with the much-discussed iGaming boom is different from that of other giants, with Goldstein describing it as a “non-event” for the company because Asia does not have digital gambling. Still, the executive left the door open to a potential expansion: “Would we go into it? Sure we would. […] If it’s profitable and we saw the right path, we would pursue it. […] I believe it will be very profitable in the long term, but there are some impediments to getting there.”
In Wynn’s case, its international plans are also focused on its land-based operations, with a proposed resort in the Middle East in its design phase. “Over the course of the past 20 years, you’ve seen both consumers and governments embrace IRs. I mean, tax revenue, tourism, great experiences, there are all kinds of reasons to support integrated resorts,” Billings said. “I think you are going to continue to see that.”
With respect to Wynn’s upcoming venue in the UAE -a development that has been labeled as “groundbreaking” in the Gulf’s relationship with gaming-, Billings said the company is “really excited” about the opportunity, as it implies a meaningful extension of its brand, putting it within 95% of consumers if they want to take an eight-hour flight or less.
Goldstein also sees Asia opening to gambling, with countries such as Japan, Indonesia, Malaysia, Korea and Vietnam seeking to enter this space. But challenges are still present there, with Sands’ CEO describing “employees and airlift” as two main factors to consider in markets such as Singapore, which he expects to rebound in the future.
Robert Goldstein
Sands’ boss also finds Macau poised to grow back to its former self: “I find it funny that people question Macau’s return,” he stated. “Of course, it’s been a hard couple of years. […] You got to basically hunker down and wait for it to turn. It’s going to turn probably this year or next.”
“And when it does, Macau will go back to making – you know, we made at the peak $3.5 billion EBITDA. I think we’ll make a lot more than that in the future there,” he noted. For Hornbuckle, Macau is the largest gaming market in the world “bar none,” and it “will forever be.”
During the panel, Goldstein also briefly touched upon the Macau license renewals, stating the issue is “on the right path.” The one thing the company now waits for is the Covid resolution in China, which the CEO sees as “inevitable.”
