MGM Resorts International reported 3Q19 results and they were good enough to make the lion roar. Macao contributed $738 million, a 22% 
surge reflecting the ramp-up of MGM Cotai surely with $80 million in revenue. Also, CityCenter may be sucking wind, judging by a 30% decline in “Managed Operations/Other.” Good as the Macanese numbers were, the were dwarfed by the Las Vegas Strip, good for $1.5 billion, a 4% gain. MGM Grand Detroit brought in $146 million, a 2% slip, Borgata was flat at $234.5 million and MGM National Harbor snared $206 million, up 5%. No year/year comparisons were available for MGM Springfield ($76 million), MGM Northfield Park ($64.5 million) or Yonkers Raceway ($52 million).
Along the Strip, Bellagio was the leader with $334 million (+3.5%), followed by MGM Grand ($318 million, -6.5%), Mandalay Bay ($249 million, +1%), The Mirage ($154 million, +4.5%), Park MGM ($103.5 million, +1o4%) Luxor ($99 million, -5%), New York-New York ($93 million, +3.5%), Excalibur ($86 million, +2%) and Circus Circus ($71 million, +1.5%). Credit Suisse analyst Ben Combes said the Las Vegas “4Q outlook is strong, with our forward room rate, convention calendar, and air capacity all positive.”
The storyline for the Strip properties was “strong slots and domestic mass offset by weak Far East Baccarat.” (Table game win was down 11%.) Room revenue, however, was up 3.5%. In addition to MGM Grand, also on the sale block are MGM Springfield, CityCenter (whole or 50% was not specified) and anything currently 
sheltered under MGM Growth Properties. For J.P. Morgan analyst Joseph Greff, this was “the big takeaway” from the earnings call. “Specifically, MGM is presently running a process whereby MGM Grand’s real estate will be in contract to be sold by the end of this year. We also sense a commitment to monetize its remaining assets—MGM Springfield, and at some point, its CityCenter JV, and its MGP stake. We think these activities, following on the heels of the announced Bellagio RE/Circus Circus deal, will allow MGM’s equity to benefit from valuation arbitrage (transaction multiples significantly higher than what’s embedded in MGM’s current equity price), and become an OpCo with very manageable traditional leverage,” he wrote.
Greff added that the lack of market reaction to the Bellagio and Circus Circus sales “creates an attractive entry point” for buyers of the stock. “We continue to like the fundamentals for LV in 2020 (especially in light of modest buy-side expectations) with more conventions and a professional NFL team each driving increased visitation.” MGM’s long-term goal, besides its cost-reduction MGM 2020 program, is to get its leverage down from 4.6X to 1X equity, the better to be well-positioned to enter the very costly Japan market, should events move in MGM’s favor.
* Another ardent Japan suitor, Melco Resorts & Entertainment, also reported 3Q19 results. Greff’s headline reaction was that the Macao 
market “continues to hum” and is “healthy.” City of Dreams Macau outperformed the market, with mass-market table play shooting up 25.5%. New Morpheus Tower was “driving much better than anticipated results” too. City of Dreams Manila exceeded Greff’s cash-flow projections “with in-line mass table and slot volumes and better VIP volumes.” Melco’s Macao market share was estimated to be 17%. Melco must have a lot of bad debtors, as it wrote off $13 million in that column.
* Bookmaker.eu, prescient in its New England Patriots and Cincinnati Bengals predictions, now turns its attention to the NBA draft. It has Anthony Edwards and James Wiseman as the top picks at 5/1, followed by Cole Anthony at 6/1 (I wouldn’t know any of these gentlemen from a manhole cover.) Michigan State (6/1) and Kentucky (8/1) are March Madness faves, although if you favor long shots there’s UC Irvine at 900/1 and St. Bonaventure at 1,000/1. Barack Obama was always good at his NCAA tournament picks. We wonder if he’ll be having a flutter on March Madness now that it’s legal to do so in the District of Columbia and elsewhere.
* Chris Fiumara, having been bumped upstairs to regional senior vice president of operation at Golden Entertainment, will be succeeded at The Strat by Stephen Thayer, new general manager. “Stephen brings decades of gaming and hospitality expertise to this role, where he will see through the transformation of The STRAT, which will be completed as we welcome 2020,” said Golden COO Steve Arcana. It’s quite a coup for Golden, which lured Thayer away from Harrah’s Resort in Atlantic City, the best performer in Caesars’ seaside portfolio. Did he want to get out before Eldorado Resorts‘ budget-cutting axe starts to fall?
