MGM’s Big Bets: Bill Hornbuckle on Las Vegas, Japan, and Digital Expansion

Episode Overview

In this wide-ranging conversation, MGM Resorts CEO Bill Hornbuckle offers a candid look at how one of the world’s leading entertainment and hospitality companies is positioning itself for the future. We discuss MGM’s digital evolution, its expanding global footprint, and how leadership evaluates ambitious and complicated long-term opportunities such as the company’s $12 billion project in Japan.

Hornbuckle also shares his perspective on MGM’s relationship with both IAC and Barry Diller, the reasoning behind stepping back from the broader New York casino process. We discussed his thoughts on Macau, the regulatory considerations across key markets, and how MGM decides which projects are worth chasing—and which ones to walk away from.

Key Topics Covered

• iGaming & the Future of Online Sports Betting  

A discussion of how MGM views the long-term importance of iGaming and online sports wagering, the evolving regulatory landscape, and how digital platforms fit into the company’s broader strategy

• Why MGM Stepped Back from the New York Casino Process

A clear discussion of the strategic, regulatory, and economic factors behind MGM’s decision not to pursue the larger New York casino licensing effort.

• The Role of IAC & Barry Diller

How the partnership originated, what IAC contributes, and how it has influenced MGM’s broader digital and strategic roadmap.

• Macau & Japan: Global Perspective

MGM’s long-term view on Macau’s regulatory environment and the complexities of developing a multi-billion-dollar integrated resort in Osaka.

• Risk, Regulation & Strategic Decision-Making

How MGM weighs regulatory, geopolitical, and market-based risks across regions when deciding where—and how—to invest.

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About William J. Hornbuckle

William (Bill) J. Hornbuckle is Chief Executive Officer (CEO) and President of MGM Resorts International (NYSE: MGM), a global entertainment company featuring iconic hotels and casinos, meeting and conference spaces, live and theatrical entertainment experiences and an array of restaurant, nightlife and retail offerings across the globe. MGM Resorts’ portfolio includes some of the most recognizable resort brands in the industry, such as Bellagio, MGM Grand, ARIA, Mandalay Bay and Borgata.

As CEO, Mr. Hornbuckle oversees all aspects of MGM Resorts’ strategy, operations and hospitality and gaming development projects. He leads the company’s global development efforts and its digital gaming strategy. He also successfully steered the company through the COVID-19 pandemic, overcoming numerous challenges including the closure of operations, tightly restricted re-openings and new health and safety measures. Mr. Hornbuckle led the strategy and execution of the company’s sale of MGM Growth Properties to Vici Properties and the acquisition of the remaining share of CityCenter and of The Cosmopolitan of Las Vegas.

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Transcript

Disclaimers And Setup

SPEAKER_00 0:05

Before we get started, just a quick note. Boyer Research will soon be releasing our flagship annual report, The Forgotten 40, which highlights 40 of our most compelling catalyst-driven stock ideas for the year ahead. You can learn more at BoyerResearch.com slash 2026. Now, let's get to the show. The following is provided by Boyer's Intrinsic Value Research and is for general informational purposes only and should not be construed as investment advice. Any opinions expressed herein represent current opinions of Boyer Research only. Boyer Research assumes no obligation to update or revise such information. Investing in securities involves risk, including the possible loss of principal. Past performance does not guarantee future results. Employees of Boyer Research or clients of an affiliate may own shares in any company discussed. Welcome to the world according to Boyer, where we speak with top investors, best-selling authors, and business leaders to uncover the smartest ways to find value in the stock market.

Meet MGM’s CEO And Scope

SPEAKER_00 1:06

I'm your host, Jonathan Boyer. Our guest today is Bill Hornbuckel, CEO of MGM Resorts International, a publicly traded global entertainment and hospitality company with a market capitalization north of $8 billion. I'm especially excited about today's conversation as MGM is a company Boyer Research has followed for decades, and a company in which Boyer Asset Management owns shares. We're going to try and cover a lot of ground today from the hospitality business, MGM digital transformation, iGaming and sports betting, capital allocation, and what Bill sees ahead for Las Vegas and for MGM. Bill, thanks so much for joining us. My pleasure. Thanks for having us. As I said earlier, I'm really excited. And before we get into the business side of MGM, I wanted to start somewhere fun. You might legitimately have some of the best perks of any CEO in America. You host some of the world's biggest events and meet some of the most iconic performers on the planet. Has there been a few moments you can share with us that it's surreal? I can't believe I get to do this for a living.

SPEAKER_01 2:15

There's a couple, I guess. You know, I've been here 48 years now. I came out to college, thought I'd spend a couple years here and go off into the hotel business and just

Surreal Perks And Sports Boom

SPEAKER_01 2:25

never left. I got somewhat lucky in the early days. But back in those days, the mob was literally still here. It was the late 70s, early 80s. And although they were transcending out, and folks like Steve Wynn and others were taking play, meeting some of those characters, and they were characters, was something I'll always remember. Modern day, in my current job, signing up originally Lady Gaga for a hundred million dollar contract, standing on stage with her hugging me, was like, okay, is this a real moment? Is this happening?

SPEAKER_00 2:52

What was that like?

SPEAKER_01 2:53

It was fun. It was exciting. She's a great human being, as casual and as cool as you would hope and think she could be or should be. And it was one of those moments that were like, you know, you pinch yourself and go, wow, this is great. This is a good day. Not every day's been a good day. You know, the day we opened Allegiant Stadium, that was a big push. The day the Golden Knights celebrated their first Stanley Cup, a huge push. So the whole sports evolution here has been pretty incredible.

SPEAKER_00 3:19

I bet you had good seats to the Super Bowl.

SPEAKER_01 3:21

Yeah, it was pretty good. We're hosting Formula One this weekend. The generation of that whole thing into what it's become for the city, I think ultimately, and the sport itself has been great. Getting to meet those guys, getting to meet. I'm a car guy by nature. And so going into McLaren's home place outside of London, meeting Zach and spectacular stuff, just fun stuff. And so I presumably think I have one of the better jobs in America, one of the more fun. Again, there's pressures on it. You've got tens of thousands of employees who demand and need certain things. And so not every day is, but the vast majority of it, people say, What business are you in? I say I'm in the entertainment business in the context of we're here to entertain folks and make it a great time for

VIP Hosting And Personalization

SPEAKER_01 4:03

all.

SPEAKER_00 4:03

Speaking of the entertainment business, I mean, you really are in a service business and you have a variety of customers ranging from like super VIPs who are gambling millions of dollars to people at the low-stakes blackjack table. What does it take to get to that? I've always, just for my own curiosity, wanted to know super VIP level, what is it like? What kind of perks do you get? How is it different than the average experience?

SPEAKER_01 4:27

I think something Vegas has always been good at and continues to be great at is personalized one-on-one attention. And so we have a hosting crew in our company of almost 500 people. And if I include Macau, that number almost doubles. And their day job is to host customers, know everything about them, know their birthday, their children's names, what they like to do, how they like to do it, and frankly, hold their hand. Get them here as often as ultimately we potentially can, hold their hand, make sure they stay loyal to the company and give them just a great time. And so, I mean, you all know this is not folklore, but we fly them around in G650s, they get to stay in places called the Mansion, they get to meet backstage Lady Gaga from time to time and others, Bruno Mars, et cetera. And so it's interesting, though, what perks their interest. Past Monday night, we hosted the Dallas Cowboys, the Raiders. We had three very big customers in our box. And Tom Brady was next door. And all they want to do is meet Tom Brady. So we had to try to make that happen. And so what motivates individuals is always interesting, particularly around our industry, usually fun. And I think we as a company, but frankly, we as an industry do the high-end, probably better name than anybody else in the world.

SPEAKER_00 5:38

No, absolutely.

Omnichannel: BetMGM Meets Resorts

SPEAKER_00 5:39

And one of the stories behind MGM or the growth story is digital through MGM rewards, BetMGM, et cetera. How do you have that personal touch across both physical and digital?

SPEAKER_01 5:51

It's difficult. I mean, because the digital business obviously touches millions and millions of customers. We've now grown this thing from 18 to this coming year. We'll do over 3 billion in top line revenue. So it's becoming a very significant piece of the company. We do it through our BetMGM partnership domestically, as well as our own and operated businesses in Europe and now in Brazil. But the idea of AMI channel, where you could touch us both at home and here, is meaningful to folks. About 15% of our database folks touch both products and get recognized and rewarded for touching both products. And so it's for us a relatively unique proposition. Obviously, DraftKings, FanDuel, others are major competitors, but they don't own brick and mortar. And so the opportunity, whether it's in Michigan to bring somebody into the casino there or here in Las Vegas and join together and recognize their spend, both online as well as brick and mortar, is a unique position. And frankly, given the tools and the assets we have, we can do it probably better than most. We've invited for this weekend, Formula One's a great example. 150 of our guests out there will be bet MGM guests. And so they'll be digital who earn their way to this experience through digital.

SPEAKER_00 7:03

What does that mean? How do they earn their way? Is it the amount of money they bet, or is it how often they go on or combination thereof?

SPEAKER_01 7:10

It's theoretical. It's the amount of money that theoretically they put in play, which earns them certain perks along the way. And just like brick and mortar, we have high rollers who are domestic online, whether it's iGaming Casino in the five or six states that we're in, or our sports betting itself, and they quote, earn their way through our rewards programs into various things that they can do. We host with the Super Bowls here, we hosted folks for it. We've got the Final Four coming next year. We've got a lot of attention around that. People want to come for that. We have the college football thing in 27, the championship game. And so people focus on certain things they want to do and quote, earn their way to those things.

SPEAKER_00 7:48

Through BedMGM and the rewards program, like how much information do you actually know about someone and how do you utilize that to your advantage?

SPEAKER_01 7:57

Go back to what we do here. It is personal relationships. So our BetMGM team also has hosts who get to know and understand their customers and what they want. Obviously, in a digital environment, their behavior you can follow intimately. I mean, very closely, you can follow behavior. Not as much as easy here in brick and mortar, but clearly in digital. But what we don't know is a lot about them, but ultimately we do outreach to them and go back to the with your children's birthday or somebody in Detroit

Rewards Data And Real-World Touch

SPEAKER_01 8:24

who's a football fan, well, what a surprise. We have a box at the Lions. And so being able to say to them, hey, next Sunday, you want to come down to a game. We'd love to take you and your son who enjoys the Lions to a football game. That's a point of differentiation that others can do. But the combination of what we have here, particularly in Las Vegas and some of our regional properties, National Harbor, et cetera, and the assets we have exposure to make it a fairly compelling and unique proposition.

SPEAKER_00 8:52

Those regional properties, obviously, you have the Las Vegas hotels, which are the biggest part of your gambling business, but you also have the regional properties spread across the country. Are they core to your business? Do you need them to operate well?

SPEAKER_01 9:05

Yeah, I mean, they're a big part of our business. The word core might be a push, but we have eight of them. We've sold one, so we'll have seven. They earn us about a billion dollars a year in an enterprise that does about even about four and a half billion when it's all said and done. So they're a sizable piece of our bottom line. They're unique. Five of them are leading market takers in each market that they're in, Borgata in Atlantic City, National Harbor in Maryland, MGM in Detroit by way of example, are market leaders in their own respects. And the ability for people to go in there, enjoy that experience, and ultimately get rewarded to come to Vegas is a common thing. And so we share a common database that all feeds into MGM Rewards. And then those customers can do as they like. And we've now positioned an airplane by way of example in for our high end in Borgata

Role Of Regional Casinos

SPEAKER_01 9:52

in New Jersey. But we can take customers up and down the coast. We take them to DC, we take them to Mississippi. They want to go to the bow for a certain experience. And so most of them, not all of them, are big enterprises under themselves as well.

SPEAKER_00 10:05

I mean, I guess what I was trying to get at is if you got rid of the regional casinos, would that impact, and you got a good price for them? Would that impact your Las Vegas business or your core business in general?

SPEAKER_01 10:19

To a degree, but not significant. No, it would impact our digital business. This is now becoming a fairly intricate web between digital, and I'll use Detroit as the example, Michigan, our Detroit property, Las Vegas, where both iGaming and sports betting are allowed. There's a pretty direct connectivity between those customers and all of that activity case. And one that's growing in meaning that people, one of the reasons they stay and play on BetMGM on a digital device is that they get access to whether it's local events and local things they want to do, or once or twice a year to come out for something special here. And so, yeah, we like our portfolio. There's a couple of assets that aren't market leading. We've got to figure out the consternation in New York, ultimately, what to do there. But you know, when it comes to New Jersey, Michigan, Maryland, Mississippi, we love what we have there and what they represent onto themselves. So is it core? No, Las Vegas is still core, but it's an important piece of our pie.

SPEAKER_00 11:18

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Live Dealer And Digital Economics

SPEAKER_00 12:05

Those who pre-order will receive a substantial discount in our latest FOIA research issue, which includes four full-length reports spanning more than 45 pages. Learn more at BoyerResearch.com slash 2026. Now, let's get back to the show. You had mentioned iGaming in Michigan. For those who don't know, and this is a big growth driver for NGM and something I'm personally really excited about. What is iGaming? It's digital casino gaming.

SPEAKER_01 12:36

You can go online, play slots, you can do live dealer. So what that simply means is you can click on a link that has a live dealer that will deal to you. We have a live dealing studio here in Las Vegas. We have one in Michigan, we have one in New Jersey that services. So like 15% of our players who play table games online do it through a live dealer, which is fascinating unto itself. And so that's a great experience for those who enjoy that. And the pace of the game, they consider it more real, they consider it more trustworthy in some way, shape, or form. God knows why, because it all should, it is trustworthy, but they do. And so it's a unique proposition that people enjoy. There are jackpot links that ultimately tie to brick and mortar casinos as well. And so the idea of linking jackpots across the totality of our products is fun and interesting for people. And so it's all of the gaming activity that you would expect in a casino, the types of games, the types of slot machines, you can play online.

SPEAKER_00 13:31

So essentially, it's a casino without the cost of building a casino. Oh, yeah. So the margins must be insane.

SPEAKER_01 13:39

Well, it's a very aggressive competitive space. And so look, we think ultimately the margins settle in the mid-20s in this business. But as long as there's a DraftKing, a fan duel, pick your favorite fanatics, your favorite marketplay, I think you'll see margins within the mid-20s. But acquiring customers, the cost of acquiring customers, the length that you need to keep them involved of time before they become profitable, you know, it's not unlikely for us to put a $500 stake on a customer to say, make your first bet and we'll give you $500. And so then the time it takes to earn that back in then some is months sometimes.

SPEAKER_00 14:16

And that's where the strategy of also having a brick and mortar gives you an advantage over the DraftKings of the world. So how many states in the US have eye gaming now?

SPEAKER_01 14:26

Six. There's three that are really meaningful Michigan, New Jersey, and Pennsylvania. And

Why iGaming Lags Legally

SPEAKER_01 14:32

those six states interestingly drive over 60% of our top line revenue. So we have sports betting in, I'm gonna give you a bad number here. I think it's 28 or 29, but we have sports betting in a significant like four X. But the eye gaming activity is big for the industry, it's big for us, and particularly in those states, where gaming and the ability to tie in two of the three for us brick and mortar to get to digital, because we've had a database for a considerable period of time in brick and mortar, to be able to leverage into that from a marketing perspective has been meaningful.

SPEAKER_00 15:03

So why only six states where sports gambling has 28, 29, or however many states it is?

SPEAKER_01 15:09

It's all about legislation and about making it permissible. So regulators, state legislators, governors all have a view. Most of the states we're in are blue. It emanates from having casinos on the ground for jobs and it migrates itself from there. Many are considering it. Obviously, it's a great form of tax revenue. The challenge we face is there's black market sites all over, anyways, today. And so if I'm in any one of those states that doesn't have it, I can simply go to a black market site, not pay tax, and not to the benefit of the industry or the state for that matter. So we continue to push the agenda, but as of today, we have six.

SPEAKER_00 15:47

But as the recent scandals show you, I mean, branding is very important. I mean, I can't imagine why someone would want to go to a black market site where it's not regulated, they could cheat you. I mean, isn't that a big differentiator?

SPEAKER_01 16:00

It is. That's why we've been able to grow an industry that's well beyond the cottage industry. I mean, we're gonna push three billion. Some of our competitors are gonna push four and five billion this year. So, you know, it's grown to a I think next year we're pushing a $15 billion industry because of that very notion.

SPEAKER_00 16:15

And five years from now, how many states, if you had to guess, would have eye gaming?

SPEAKER_01 16:19

I would hope

Global iGaming And Brazil Push

SPEAKER_01 16:20

to think we could double it by now. Would be a realistic goal. There are big states like Texas that just simply doesn't want gaming today. We have ongoing dialogue around sports betting and brick and mortar casinos. There are other states like California and Florida, which are influenced by tribes and tribal gaming, and so that gets very complicated very quickly. There are other states, Ohio, Illinois, New York, which I think at some point will, but time to tell.

SPEAKER_00 16:45

So we're talking about the US business, but how big of an opportunity globally is EI gaming?

SPEAKER_01 16:53

Big. We are now it's a more mature market in most countries. We're in 11 markets. We've just added Brazil this year. We have BetMGM now, the actual brand itself, which we control and own in UK, Sweden, and one other place. I want to say Netherlands. And we're expanding on that brand. We bought something called Leo Vegas. We bought our own technology platform, our back end. We bought something called typical, our own sports betting platform. And so we've established ourselves now as an operative. That business will generate close to a billion, top line as well this year. And to us, it's new. I mean, we're in our third year of this, so it's an evolving, growing business. Its core, this company called Leo Vegas that we bought back four years ago. We got it in play three years ago, has been really dominant in the Nordics. And so we like our position there. We have 38% market share in many of those places, and we're trying to spread that out on the back of obviously MGM's brand, on the back of now our knowledge. And we're not yet at a point with that business where we can tie it to Las Vegas. I mean, yeah, every once in a while somebody will do the on me channel. It'd be nice and interesting. But on to itself, and almost all of them, are sports medicame and iGaming combined. And so we have this unit that's continuing to grow. We think Brazil is the big market to go. We see it as a seven or eight billion dollar marketplace. If we can get high single-digit share, we've got a $300 million earning

Macau License And Non-Gaming Spend

SPEAKER_01 18:18

business bottom line there. And so we're excited about that.

SPEAKER_00 18:21

Do you one day envision the international eye gaming to be bigger than the US eye gaming? In totality, yes, it could and should be. Yeah. I know this may be many years in the future, but this is such a high margin business. Could the iGaming one day surpass in importance the actual physical gaming aspect of the business?

SPEAKER_01 18:43

I guess at some point, but there's a long way to go for that. We've taken this business, the Ben MGM Core business domestically. We were underwater 200 million last year. We're going to push $200 million in profit this year. So we've done over a $400 million swing in the course of a year. And so it's hit its critical point and then, and we're going to continue to grow from here. That's a long way away, though, from the combination, because don't forget we have a Macau business that throws off a billion plus a year in cash as well in EBITDA. Not in cash in EBITDA. So there's some room to grow there. But we have said and we believe our BetMGM business is going to hit the half a billion dollar mark over the next couple of years.

SPEAKER_00 19:21

You had just mentioned the Macau business, and it's obviously a great business, but it's also in a place that there's a lot of regulatory uncertainty. How do you manage that? And how do you think investors should think about that?

SPEAKER_01 19:32

I don't know if I would use the word uncertainty. Actually, with this new relicensure, when we have seven years to go and then they have a three-year extension if the government chooses to take it. There is, in terms of regulations themselves and policy, there's a lot of clarity. In terms of how to invest, in order for all of us to get relicensed, we all had to contribute to the notion that we would spend, in our case, a billion one on capital and a billion one-ish on opex for non-gaming activity that would drive tourism and leisure activity into the market. We're about a third into that spend, and we're about a third into our license tenure. That people will gamble while they're here, but that's not the primary reason they come. They come for all this other activity. That's the notional proposition. We've got a long way to go, all of us there as operatives. But that's the part that's a little less clear how to get there. Everything else there was pretty straightforward as a regulator, as a marketplace. Frankly, we feel good about where the

Integrity, Prop Bets, And Policing

SPEAKER_01 20:39

Chinese government has landed in terms of Macau's existence and its going forward. And so good signal, good signs on that, which are obviously very important in the long run. How to get this money spent and make it productive is really the challenge, I think, over the next couple of years.

SPEAKER_00 20:54

Just moving on to something that's very topical. It's been in the news. You know, we've seen headline grabbing, integrity issues from the MBA scandal, game manipulation, prop bets scandals. How should the industry think about where to draw the line on these betting types?

SPEAKER_01 21:10

The majority of all of that information came from us, the operatives. Because we are so dialed in, because we understand the odds, because we understand the activity, we can see betting activity, we can hunt out quickly fraud, suspicious activity, et cetera. And so we all often now have become the policemen of the activity and therefore notifying the league of, hey, we might want to look at something here. That's the first comment I would make.

SPEAKER_00 21:36

Can you take us through that? Like, how do you figure out that there's suspicious activity? What do you do? What's the call?

SPEAKER_01 21:42

It depends on the activity. Look, there's anomalies, an activity case. In our Ben MGM place, we have 50 odd data analysts who look at betting data all the time, every day, basically the odds makers themselves. And when something doesn't line up the way we had thought it would predict, sometimes We dig into it because, well, what happened here? Why weren't we right about this? And through that activity case, which goes on every day, all day, we find things from time to time that you go, hmm, this is suspect. And we report them because it's not in our interest to have it happen. Because by the way, we're the ones we're taking advantage of.

SPEAKER_00 22:17

You're taking risk.

SPEAKER_01 22:18

Yeah, at the end of the day, we're the ones with the risk. And so we're very good at that. And so we'll call it out quietly, but we'll call the league or we'll call somebody and say, hey, by the way, you might want to take a look at this. And then they go off and do what they do. And so to that extent, it's been an advantage. I think where we all need to be cautious and we all need to have a righteous eye is play and play. I'm betting on the next activity case, whether it's a pitch, a strike, ball, antenna, whatever the next play is, that's suspect, and more so than the broader outcome of a game, potentially. And so we just have to be diligent about it. I will tell you this there's been enough black market activity over decades that I'm sure all of that existed and continues to exist, that I think we've become an interesting policeman in some of that because it's in our interest to make sure it doesn't happen. And so the other side of that coin is obviously some of it gets called out publicly because it has to.

Prediction Markets And Regulation

SPEAKER_00 23:14

Would you support the industry stepping back from some of the more like exotic prop bets? Or is it more of a case-by-case basis? Like what do you do going forward?

SPEAKER_01 23:22

I think it's a case-by-case basis. I think the engagement those prop bets bring are compelling. I think they're compelling for the sport. I think they're compelling for fan engagement. I think they're compelling for media, for television time. When a football game's 32 to 10 and then there's four minutes left, who cares? Well, if you care about who makes the next field goal, you care. And so you stay engaged and so on. I think there's a way to effectively monitor and effectively police it and continue with it.

SPEAKER_00 23:48

Just on the human side, you know, when you see someone who's making $22, $23 million a year risk everything for a few hundred grand, like does that just make you step back? Or like how do you think about that? It makes you step back.

SPEAKER_01 24:01

But you have to recognize it's always existed, it will probably continue to exist, and you've got to just be diligent about it. It is amazing to me, to your point. But you know, like any criminal, I mean, look at go back to Ivan Bosby. I mean, what was he thinking about?

SPEAKER_00 24:15

Yeah, Martha Stewart. Yeah, exactly. Yeah, I mean, there's a better example on hello. One of your, I don't want to say competition, but perceived competition are the prediction markets like polymarket, and they have much lower fees because they match users instead of taking risk. Are they a competitive threat or are they in a different category? How do you deal with that going forward?

SPEAKER_01 24:39

Well, what we've been told very specifically by several states,

Japan’s $12B Osaka Resort

SPEAKER_01 24:42

Nevada of No, that it's off limits for us because we have followed it. We followed the marketplace. We understand what it's been in UK for decades, by the way. It's not a new thing. It takes a single digit percentage of the market. So while a threat, not a, I don't think a massive one, I think the propositions generally, now they'll get better, have been weak. I'm not so sure they don't make some of their own markets when you say they're just pitting one against the other. I'm a little dubious of that, but one day at a time. But they're getting closer and closer to having a product that looks and feels exactly like ours. No doubt about it, it's betting. It doesn't have the regulatory controls, it doesn't have the age controls. So an 18-year-old in Utah can bet. I'm sorry. Utah doesn't want it, and a miner shouldn't be allowed to, but not under, but an 18-year-old shouldn't be allowed to bet full stop. And so we're obviously very anti, not from a competitive perspective, but we just we think it ought to be regulated by the states, as all of gaming is. And the notion that it could hide behind this federal regulatory environment called financial trades markets is just not appropriate. And so we are opposed and we'll continue to fight it wherever we can.

SPEAKER_00 25:51

One of the big growth areas and I referenced before is Japan. And you have a really exciting project there and development that's underselling. And I think it's a $10 billion spend. Can you just tell us a little bit about it, the opportunity, what you're gonna be doing?

SPEAKER_01 26:06

We've been on this journey. You'll find this staggering because sometimes this is how long these things take. We saw our first Diet member in 2009.

SPEAKER_00 26:12

Just to stop you, that's their equivalent of their Congress.

SPEAKER_01 26:15

Exactly. So this was going to be a federally regulated deal, which it ultimately became. The Abe administration got enamored with opening up the country for tourism. At the time, in 2013, there was only 13 million visitors. If you think about Japan, it was staggeringly low compared to other really cool places to go in the world. Eventually, legislation gets passed. The bill's extensive, though. Our project is 12 billion, not 10. But we picked Osaka because we thought they had the political will to want to get it done. And we picked a partner called ORGS because we thought they had the risk profile to want to get something like this done and the background and the backbone. And they did. And so we ended up though with the only license in all of Japan. So if you think about it in the context of Singapore, which has two licenses, six million people, 20 million visitors. Singapore this year, SANS is going to make probably $2.5 billion of cash flow. Bottom line. We have 120 odd million people. We're the only licensee in any time for the foreseeable future. We've started construction, we'll be open in 2030. We see it as our version of Marina Bay SANS, and then some, given the market scale and size. It's an hour and a half closer to Beijing and Shanghai than Macau. So there's a, I think, over time, forgetting geopolitical issues that may or may not emerge, that there's a huge opportunity there with China, China visitation. China's visitation is up over 30 million

Why Sands Walked, Why MGM Stayed

SPEAKER_01 27:36

now already. So that unto itself has been a positive. It sits on a place called Yumashima in Osaka, immediately adjacent to where the World Expo site was. Every day in the last week, there was a quarter of a million visitors that went to World Expo. So the infrastructure has been put in play to accommodate this kind of tourism and traffic in this zone. It sits at the base of Kansai region, which is what the place Kyoto and some of the amazing places are in Japan for visitation. It will be one of the world's largest, if not the casino. We'll have over 6,500 slots. We'll have over 750 table games. And so we're very excited by it, actually. It's a journey. It's 2030 before we open. But I think the upside potential and the fact that we're going to be the only one for a considerable period of time. And think about the profile of consumer and customers, the Pachinko business in Japan itself has been a $30 odd billion dollar business. And I would argue that the product offering that that exists today in that space, we're just going to simply re-establish a whole new thing.

SPEAKER_00 28:35

So if you took something like the Bellagio, I could be off by a little bit, but 70% of the revenue is non-gaming or so. Is Japan going to be a similar type of situation or is it going to be more of a gaming-centric place?

SPEAKER_01 28:48

I think it'll be more gaming-centric than here, because it's the only one. We are limited in room keys for today. We're going to have 2,800 keys. There's two hotels we're building there. And so we're somewhat limited in that context, but over time that will change as well. So I think it'll be more gaming-centric just because of its scale than non. But the goal is international tourism. The goal is to serve as a gateway to folks to enter Japan and go from there. Just give you a simple example. We're building a tourism center there. It's about 45 to 50,000 odds square feet. And it's to serve as a gateway to educate people on the rest

Stepping Back From New York

SPEAKER_01 29:23

of Japan and how to travel and where to go. So object being, they come in, they go, they get into this trip tourism center, they learn about other places that they can go and visit.

SPEAKER_00 29:32

I mean, the opportunity sounds exciting, especially being the only one in the market, but you saw Sans and when they stepped back from pursuing the license. You know, what did you see that they didn't?

SPEAKER_01 29:42

Well, one, we saw Osaka versus Yokohama or Tokyo, which ultimately politically never got there. Sands was pushing Osaka. We decided to have a Japanese partner at scale. And so the way our partnership works is we're 40 odd percent, they're 45%, and we have a consortium of other Japanese partners who make up the difference. Think Panasonic, think high-end Japanese partners. We each have a small piece of this thing as part of a consortium. So we said to ourselves, this is a Japanese enterprise. Sands wanted to do it principally for themselves. Fair again. The winning combination though became we were right about both location and that combination of partners. And so we won the bid. It's the bottom line. Look, it's not easy. The tax is 30%. Building anything in Japan, particularly on an island, we've got 3,500 pylons that go up to 70 meters. This is not a simple feat by any stretch, but we're all in. I was there last week. The site's literally coming out of the ground. You can begin to see the shape of the foundation, which is fascinating. After literally 15, 16 years of this is compelling as help force.

SPEAKER_00 30:50

I mean, you talked about them that they walked away. One of the things that you recently walked away from was New York. You were going to have a casino in Yonkers. You decided to walk away from it. What was the thinking behind it?

SPEAKER_01 31:05

So in 2018, we purchased the Empire Casino at Yonkers Raceway, is where it is and what it is. It's a 97-acre parcel right off the freeway, has a racino, so it's all slots. We operate on behalf of the state. And so, as you know, the proposition was and is ultimately adding table games and making it a full-fledged casino. So we would own the machines, we pay a tax. The first proposition for us were the taxes were high because we had to match and guarantee that particularly the education fund would not go down, which is where the vast majority of our current tax structure goes. It's $300 odd million dollars. We also needed to keep the horsemen alive and keep the track going. That's a $60 odd million dollar proposition. And under the new regime, we had to give money to, which was fine, the city of Yonkers. So the underwrite bill on this thing was to begin with $400 million. Yonkers, while compelling in many respects, because we saw it as a large-scale regional casino, we didn't necessarily see it as a destination resort. Think Port Gotham. We saw it at large. But the closer the competition got to us, I mean, I was rooting for sands out in Nashville, you know,

IAC’s Bet And Entertainment Vision

SPEAKER_01 32:11

gone out to Nassau County. Anything downtown Manhattan was fine. But the way it ended up was you've got valleys, and more notably, you've got the city field proposition for $8 billion, kind of in our backyard. And so the competitive landscape was changing, didn't love it, but okay. The final straw, though, was they changed the length of the license. Within weeks, we had already made our submission of what we were to build. They changed the length of the license to if you didn't spend $5 billion or more, you could only get a 15-year license. That was news to us. And so it put us on edge about well, what else will happen between tax, any and all things. And so we decided to be prudent stewards of the Capitol. It was $2.2 billion today. So that means who knows where this would have ended up, but call it 2.2. We saw a massive concern around the taxes, you know, the underright to begin with. We saw competitive concern and that they were closer to us than we wanted them to be originally and we had hoped for. And then we saw a changing regulatory body that at the last minute said, Well, I'm going to change the basis of how we're thinking about your license. And we wanted to save the money for other things. And so we're still in business, to be clear. We still run this racino. It's still productive for us. We're not going to have any competition for three or four years at the minimum. Aqueduct will do something, I'm sure, in the interim with tables. But that being said, I think we're in pretty good stead.

SPEAKER_00 33:40

Is New York just a difficult place to do business?

SPEAKER_01 33:43

They weren't making this piece easy. I would say that. It was an elongated process that needed to be clear and more succinct. And I'll just leave it at that. We're doing business there now. We've enjoyed our relationship with the city of Yonkers. They were great, but it wasn't easy.

SPEAKER_00 33:58

Understood. We're big fans of IAC and Barry Diller in 2020. They made a good bet on you. They plowed a bunch of money into IAC stock. I think they own roughly 20% of the company. What did they see in MGM that the market didn't?

SPEAKER_01 34:14

Well, look, it was just coming out of COVID. So the value equation alone was spectacular for them, and they paced it right and timed it right. So there was just the very principle of we were depressed. I think a stock was trading at like seven or eight dollars when I think they started considering this thing, which was obscenely low given the obvious because these assets weren't going anywhere.

SPEAKER_00 34:32

And for reference, it's about 32 in change now.

SPEAKER_01 34:34

Yeah, exactly. So they made a couple of bites at the Apple. We've bought back since almost 42% of the company. So their share has grown up to 24% at this point of the game. They saw a burgeoning digital opportunity that they thought was very real, and they've been right about that so far. It's taken longer than we'd all like, but it has taken and it is moving and it's productive. And so they saw that opportunity. And then Barry of Notes always had a vision and interest in Las Vegas. He's been a follower of Las Vegas for a considerable

Digital Strategy And Board Support

SPEAKER_01 35:03

period of time. He's extremely creative. He's a visionary guy in many respects. And so he likes the idea of how can I impress and impact my thinking on Las Vegas? And so for me, on our board, he's been a great visionary in terms of where we are and where ultimately we'd like to go. And so time to tell.

SPEAKER_00 35:20

What type of things has he suggested that you run with?

SPEAKER_01 35:24

Mostly around the entertainment platform. I'm not going to tell you what they are yet, but mostly around the entertainment platform of what to do. You know, we've seen the sphere here in Las Vegas just take off in terms of something that's productive and selling tickets. It's been a great experience for the overall community. So it's encumbered upon us as the entertainment leader in the community to recreate some things here that we're working on aggressively in both our showrooms and outside of our showrooms that help add to the notion and the experience of entertainment and live entertainment, which continues to be on fire here in Las Vegas. And so programming is essential. You know, not a week goes by now that we don't have something of real interest. This week happens to be Formula One. You know, I mean it goes on and on and on, which is good. So very active in all of that.

SPEAKER_00 36:09

In terms of helping you with digital, what type of stuff have they suggested or done? Particularly through Joey Levin.

SPEAKER_01 36:15

Had been their CEO for a considerable period of time. Joey's been active on the board with BetMGM. He's an observer who has been active in trying to help us think about database, how to do REACH, how to do marketing, how to think about it, where to spend money. And so they've been very active in that whole cycle. They've been active in the MA that we got ourselves into this business on our own in Europe and in Brazil and very supportive of that activity. I brought one of their guys into the company, a guy named Gary Fritz, who's now my chief commercial officer, who also oversees those digital assets. And so getting ourselves established in that business has been at their stewardship. And so we're excited by that.

SPEAKER_00 36:54

Bill, this was fantastic. Thanks

Closing And Listener Thank You

SPEAKER_00 36:56

again for taking the time. We covered a ton of ground today from MGM to evolution and how you're thinking about capital allocation to what's happening in Japan and the digital side of the business. Thanks for being so open and giving us a look at how you're thinking about the next chapter for MGM. Thanks for joining us, and thanks to everyone for listening. We'll see you next time on the World According to Boyer. I hope you enjoyed the show. To be sure, you never miss another World According to Boyer episode. Please follow us on Twitter at BoyerValue. Until next time.