MGM Resorts' Bill Hornbuckle: “We're not giving up on digital by any stretch”

MGM Resorts International president and CEO Bill Hornbuckle has vowed the company will not be giving up on the digital side as costs continue to rise for the firm’s BetMGM brand.

The 50:50 JV, ran in partnership with Entain, revealed a H1 EBITDA loss of $123m on Monday (July 29), with the expectation for similar losses to incur in the second half of the year as bosses continue to peg 2024 as an “investment year” for the business.

Monday’s news was immediately met with confirmation from BetMGM that the plan to pump the operation with further capital is still in place, with a “greater-than-planned marketing investment in igaming” expected in the second half of the year.

On Wednesday (July 31), while speaking on an analysts call following the release of MGM Resorts International’s Q2 report, Hornbuckle doubled down on that stance when questioned by analysts over the long-term prospect of continuing to invest in digital.

Off the back of a mixed performance in the first half of 2024, as revenue jumped 9% to $1bn in Q2, the CEO was pressed for comment on what would prompt the company to pull back on its level of spending on BetMGM.

Hornbuckle explained: “Look, yes at some point — of course, I would never say never. At some point, how hard do you chase sports versus learning igaming flow? How much does igaming grow into itself? But look, we’re past the major investment scale.

“We’ve invested, call it $650m give or take, in BetMGM at this point. We’re $1.5bn all in between LeoVegas and some other acquisitions, that would be a lot.

“This is about yielding off of what we’ve created and hopefully doing that, but I understand the core question. We’re not giving up on digital by any stretch.”

Hornbuckle continued, insisting that MGM is of the belief that digital is not only a key component of growth within the company, but within the industry, before adding: “We are just going to be patient with it for a while.”

Hornbuckle’s comments align with those made by BetMGM CEO Adam Greenblatt following Monday’s results release, as he added that the company is on the right track.

“The first half of this year has been very important in laying the groundwork for BetMGM’s future, Greenblatt explained. “2024 is a year of investment, focusing on improving our customer experience and stepping up our level of investment in players. We are encouraged to see this strategy delivering accelerating momentum.”

“We have exceeded our goals for both acquisition and retention, which should lead to higher year-over-year revenue growth for the second half of this year into 2025. Our execution roadmap, building momentum and prospects ahead all support our confidence in BetMGM’s strong future,” he concluded.

However, Hornbuckle did make clear that while further investment is scheduled, BetMGM cannot rely on MGM as an endless money pit.

Speaking on Wednesday’s earnings call, he declared: “Frankly, if it’s not working, we’re going to pull back. It’s not a — just here is the bucket of money and go guys. We’re going to watch that very closely and very diligently each and every day and make sure those investments are paying off.

“I sense and understand the concern, we all share it, and it’s a key time for the business and for the company in the next six or seven months to see BetMGM begin to perform into that space.”

Finally, Entain’s decision to name Gavin Isaacs as its new CEO late last month was also addressed by Hornbuckle, who heaped praise on the former Aristocrat president.

Isaacs will officially join the FTSE 100 firm next month and brings an end to a period of uncertainty after former CEO Jette Nygaard-Andersen resigned last December.

Hornbuckle dubbed the appointment of Isaacs as “comforting”, before adding that the Australian is “someone MGM and I have known for a long time, have a great relationship with and I think he’ll do wonders for the business and ultimately the market.”