MGM Resorts International - Pioneering the Global Gambling Landscape

Author: Matthew Haynes

Arguably one of the most convoluted gambling companies in the world, MGM Resorts also pre-dates many others. Boasting approximately 46,000 employees in multiple locations around the world and headquartered in Las Vegas, Nevada, US, MGM Resorts International has flourished over the last few decades.

It is known as somewhat of a flagship in the industry, with its nearest competitors essentially being the likes of Caesars Entertainment in terms of size and comparable assets and industry verticals.

Having built its initial reputation as a casino and hotel resort business, the jewel in the company's crown is the irrepressible Bellagio in Las Vegas.

The origins of MGM date back to the late 1960s and a dropout from high school, Kirk Kerkorian. Having once owned Metro-Goldwyn-Mayer (MGM) - the renowned movie studio, that no longer has an affiliation with the company, Kerkorian is known as being one of the earliest movers and creators of the Las Vegas Strip, as we know it today.

In 1962, he developed the International Hotel as part of his vision to diversify. At the time, it was the biggest hotel in the world and attracted the likes of Barbara Streisand and Elvis Presley - the resort's first two performers. Four years later, he built the MGM Grand Hotel, surpassing the International Hotel in terms of size.

MGM's Path to Industry Leadership and Global Influence

Long after Kerkorian had left the business he founded, MGM Grand Inc., in 2000, the company acquired Mirage Resorts for $4.4 billion in cash - the biggest deal of its kind at the time.

In 2005, following substantial success, the new company so named, MGM Mirage bought Mandalay Resorts Group for $7.9 billion. This was greeted as a landmark in the history of the company while also making a significant statement in the industry.

The company continued with its name until 2010 when it was renamed MGM Resorts International. Since then, it has truly become a global casino, entertainment and hospitality brand, making an almost completely transformative change.

What Has Set the Company Apart from Competitors?

One of the realizations that came about within the MGM’s executive committee was a need to differentiate itself. Having always predominantly been recognized as a conglomerate of land-based casinos, this, of course, was an add-on to its hotel and hospitality business.

Very quickly (especially throughout the nineties), the casino arm of its business became a substantial part of the company's annual revenue, and each hotel resort that was purchased was done so with casino development in mind.

It was effectively the first hotel resort business that incorporated the casino element, at the time being hailed as somewhat of a masterstroke, one that has essentially helped it to retain its brand power and even establish itself as the undisputed number one in the industry.

Another element of its clever business approach that has helped to put it on the global map is its gambling industry acquisition strategy; having bought and set up resorts in key locations around the world.

While its main hub is undoubtedly in the US, most notably Las Vegas, it has locations in China (Macau), Japan and the ever-growing (on the casino stage) Singapore.

Locations have become a key factor in the business model of MGM, with the company knowing that they were able to leverage the brand power around the world to attract customers in countries that were witnessing an upsurge in gambling tourism. Singapore certainly is one of those.

A lot of investment has also gone into making sure that the quality of service in the company is best-in-class over the last couple of decades. Ultimately, having the goal of being recognized as the premier casino resort chain in the world and providing a top-notch customer experience has helped to set it apart from its competitors.

Training is a significant part of the company's business model, and as a result, the standards that have been established and maintained over the years are a key reason why guests keep returning, while it is also a big driver as to why they are able to attract new business from around the world.

Each resort also has hundreds of rooms, while the facilities are second to none. When it comes to the casino offering, the same can also be said. Thousands of gaming machines are available in each resort, in addition to exclusive poker rooms and numerous blackjack, roulette and craps tables.

A Game-Changing Move in MGM's Strategic Expansion

Arguably, the biggest masterstroke of the company came in 2018 when it decided to create and launch its own sportsbook. This was in response to the company identifying the huge potential that there was in the industry, while it effectively predicted that US states, at some point may well regulate the online casino and sports betting industry.

As such, the BetMGM sportsbook was born. In order to ensure quality and expertise in this niche, they embarked on a joint venture with UK-based powerhouse Entain (previously GVC Holdings), which has well in excess of 20 big online brands.

This has enabled the company to compete with the likes of DraftKings and FanDuel in the US. Following 2020, numerous states began to regulate the online gambling industry, and BetMGM was well-positioned to be able to essentially, hit the ground running.

As far as MGM Resorts International was concerned, this online asset would be a huge difference-maker in terms of adding more revenue and tapping into a niche that had unparelleled potential in terms of growth.

It wasn't at first widely known that BetMGM was part of the MGM family, although the stakeholders were quick to identify a route to increase awareness and cross-marketing initiatives soon came into play.

As such, visitors to the various resorts could benefit from sign-up deals on the BetMGM site while on the premises in states where online gambling was legal and, as a result, this has played a major part in the business's growth strategy over the last few years.

The group CEO, Bill Hornbuckle, payed close attention to the BetMGM asset of the business, and his involvement highlighted his determination to make sure that it is the best online gambling brand in the world, to a similar degree that its resort business is at.

Following the third quarter earnings report last August, Hornbuckle revealed:

It highlights the commitment to which the CEO has to the brand, though also evidences the size of the task that he has, running essentially two huge arms of the MGM corporation.

With BetMGM coming into its sixth year and also having recently entered the highly competitive UK market, there is still a significant amount left on the table while it will be looking to further extend its presence in the US. No doubt, chasing down DraftKings and FanDuel will be top of the agenda.

Then there is the company's independent online casino that came to the market last year. Capitalizing on the name of the popular gameshow, the group launched the Wheel of Fortune Casino in New Jersey, which has witnessed steady growth.

Rivals in the Global Gambling Landscape

The makeup of the MGM business model was certainly somewhat revolutionary in the gambling industry, particularly when taking into account their online asset. Arguably, its closest rival would be Caesars Entertainment.

While the company does not have the extensive global presence of MGM, and is not considered quite as elite, it still has a large customer base. It used this in the spring of 2021 when it paid $4 billion to acquire British company William Hill as a way of attempting to compete with BetMGM.

Following a similar model, in terms of integrating this with its resorts, complications led to the company selling the brand's non-US assets a year later for $2.35 billion to 888. It does appear as though Caesars is still trying to define its strategy when it comes to the expansion of its online brand; as a result, MGM does have somewhat of an advantage.

Few gambling companies can compete with MGM in terms of sheer scale, especially when considering its position in the land-based gambling arena, the rapid growth of BetMGM and even the potential that it has to differentiate further.

An online asset would always have been the most natural progression for MGM, especially considering the foundations that it already had in the gambling industry, in addition to its ability to leverage its connections around the world and forge new, synergistic alliances.

Undoubtedly, the next few years will make for an exciting time for the MGM family as it aims to further strengthen its grip on the industry as a whole, especially with the ambitious Hornbuckle at the helm.