How the wheel of fortune has turned for MGM Resorts International. Where Macao was once the grand prize among its casino trophies, it is now an albatross around the company’s neck, provoking a guarded outlook from Fitch Ratings. But MGM’s Las Vegas and regional casinos made up for that and more. Fitch was not only impressed by MGM’s liquidity both in terms of cash in hand and credit lines, it also said U.S. casinos had “essentially fully recovered” and were helping MGM retire debt. “The strong performance in Las Vegas, both slots and table games, is offsetting lingering weakness from the international and convention segments, although the latter will come back more in earnest in 2022,” Fitch boffins wrote.
MGM’s regional properties will outdo 2019 both this year and the next, Fitch predicted, and Las Vegas should be fully recovered by 2023 (visitation still lags 2019 levels), a forecast “which may prove conservative, given current trends domestically.” The crystal ball was cloudier vis-a-vis Macao, both due to Covid-19 policies and the uncertainty of the concession-review process. Of the former, Fitch’s rating “reflects the potential for negative rating actions should there be signs that the recovery in visitation to Macau, particularly from Mainland China, and resultant gaming revenues are not materializing.”
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