Corey Sanders : Yes. In 2022, the majority of the growth here in Las Vegas was driven by the Bellagio, Aria, Cosmopolitan and the MGM Grand. Mandalay Bay had a fantastic year as they, of course, capitalized on the return of the group business to Las Vegas. I mean in the fourth quarter, just as an example, our group room nights were up about 50% versus the fourth quarter of 2021. So it certainly has skewed to the luxury properties. But I will tell you, from a portfolio strategy perspective, all of these properties here in Las Vegas are really important role players. We’ve invested some capital in the Luxor in the last year. We just — we’re doing the rooms in New York-New York right now. And those businesses, we expect, are going to be very solid cash flow generators over the next several years. But no question, the growth is coming from the luxury segment.
Chad Beynon : And then can you just talk a little bit more about the omnichannel opportunities with driving your players from BetMGM back to Las Vegas, given it’s probably one of the more important years of your players wanting to come out and see some of the events, kind of where that stands now and how that should progress in ’23?
Bill Hornbuckle: So I think simple answer is more. And when I say that in the context, it’s now becoming thousands of players that have obviously touch both brands. It’s interesting. The combination of the two, the players spend about 40% more. Now that’s kind of intuitive but 40% more is interesting. The other thing that plays to the events, whether it’s sports or otherwise, sporting events, is that 85% of the players are under 49 years old. And so that network and that combination is bringing us a younger player, bringing us people who have to date have the propensity to spend more when combined with both brick-and-mortar and digital activity. And we’re now reaching thousands of them coming in. We’ve set up fairly elaborate CRM systems, both at BetMGM and ultimately, a hosting program here that captures them.
And so there’s one-to-one dialogue about certain VIP players and what their needs, wants and desires are. And so we’ve treated that network like we would treat any of our branch offices, if you will, when the phone rings and they have somebody of substance, we’re set up to take care of them. So excited by it. We need over time to automate it more, so that there’s true connectivity between BetMGM and its loyalty system and ultimately MGM Rewards system. But for now, focused on the high end between the spend, the use and the numbers, all pretty exciting.
Operator: The next question is from Robin Farley from UBS.
Robin Farley : I wanted to ask a little bit about — you showed the breakdown of same-store gaming revenue in Vegas being down about 10%. And I think it was down a little bit in Q3 as well. I wonder if you could give us some sort of color on what’s happening with the gaming consumer in the last two quarters. Is that kind of fewer trips year-over-year because there are more options in the world? Or is it just lower spend per trip? Or kind of what do you think is driving that in the last few quarters?
Jonathan Halkyard : No. We’ve seen same-store handle and drop and win growing modestly in Las Vegas. Although there’s no question, the majority of the growth that we’ve seen in this quarter on a same-store basis, it’s been on the hotel side. So the gaming customer is healthy here in Las Vegas, the — it is driven mostly by our higher-value gaming customers, but it’s very healthy on a same-store basis.
Robin Farley : With — are the declines — just to sort — Jon, you’re saying it’s coming from the higher-end gaming player? Or you mean they’re holding up, it’s the sort of broader market player where the with the same-store decline?
Jonathan Halkyard : No, we’re — what I’m talking about our slot handle and table game drop and and slot win and table game win increasing.
Robin Farley : Okay. I was looking at your slide showing casino revenues down 10% on a same-store basis in Q4. Kind of know there were some properties and in properties out, but I was just using the number from your slide.
Jonathan Halkyard : Yes, some of that will be on a net basis after accounting for the cost of hotel rooms that are comped against those players. And so that is having an impact on what we’re describing is that gaming revenue. But in terms of the way I consider the health of the gaming customer is to look at the volume metrics and the gross gaming revenue, which are growing on a same-store basis. Does that make sense, Robin? That’s kind of when I think about what the behavior of these customers actually is, it’s on the gross basis.
Robin Farley : Okay. Okay. I was just trying to clarify that number, that’s helpful. Also, I was just curious, given obviously the strength of your liquidity and cash position and what you have going, why suspend the dividend? And I realize it was a small dividend only remaining at this point. But I’m just curious why suspend that when you — liquidity is certainly not the issue?
Jonathan Halkyard : Yes, it’s not. It was really an administrative issue. It was burdensome. It was complex. And that measured against the size of the of the dividend itself, which was de minimis and just how much capital we’ve returned, and we expect to continue to return through the form of share repurchases. We just felt that it was a practice that we did not need to continue. That doesn’t mean that we wouldn’t reconsider it or our Board wouldn’t reconsider it at some point, and in so doing, would make it a more substantial dividend than a de minimis dividend, but it was mostly an administrative solve.
Operator: The next question is from John DeCree from CBRE.
John DeCree : Maybe just, Jonathan, a quick follow-up on Robin’s question regarding casino revenues. So just to clarify, with the higher ADR now essentially the dollar amount that you need to net against casino revenue is what’s causing that kind of accounting decline?
Jonathan Halkyard : Yes. That is the major issue that — that’s the major dynamic which is causing this topic that we are talking about. And it’s not just ADR, but also the size of the casino segment generally.
John DeCree : Okay. Understood. Thank you for that additional clarity. Maybe just for a follow-up question. Bigger picture, I think it was pretty clear as to where you target growth investments, digital international, but the last 24 months or so, you’ve moved a lot of chairs and upgraded the asset base in Las Vegas and opportunistically, I think, divested Gold Strike. Curious if you could give us some comments on how you feel about the domestic portfolio today, both regionally and in Las Vegas? And if there’s potential opportunities you’d consider, more on the M&A side? And we kind of know plans in New York and if other big markets were to open. But on the M&A front, either buy or sell, anything that you’d think about doing or might make sense.
Bill Hornbuckle: Well, let me kick it off. A, I think, particularly after the moves that we’ve made, we’ve truly enjoyed the portfolio we have. In terms of Las Vegas, obviously, we own 40-odd percent of this marketplace, and we love the properties that we have here. We love the positioning. And what’s happened at the south end of the strip, particularly via Allegiant has been productive. When it comes to our regionals, obviously, we’re in a different regional game in most of our markets, A, whether it’s Detroit, Atlantic City or Mississippi, we lead in a big fashion. We’re market leaders there. We tend to want to do that and try to tie out the product offering, integrated resort to integrated resort. We just think there’s an opportunity to get the right kind of customers to transition to Las Vegas and otherwise.
I would never say never on any M&A acquisition. There’s always, I suspect an asset here or there that might be of interest, but I don’t think we have any immediate designs or plans on anything substantive sitting here today. I think our growth will come through the development opportunities we’ve defined, through the digital opportunities that we have defined to date and are going to seek. And yes, we’ve always got an eye and an ear open, but there’s nothing specific that — nor would I actually tell you if there was.
John DeCree : Fair enough. Fair enough. Just engaging the strategy. Appreciate it, Bill.
Operator: And the next question is from Barry Jonas from Truist.
Barry Jonas : Guys, given the strong strip outlook for ’23, is the high end of that 400 basis point to 600 basis point margin expansion, the right place to think about how the year could shake out? Or could you still go higher? And then just with that, can you remind me what the starting point is here? Is it the reported pre-COVID 2019 number or based on sort of a pro forma portfolio?
Jonathan Halkyard : Yes, when we use that 400 basis points to 600 basis points sustainable margin improvement, we’re referencing the 2019 year. So we’re not trying to adjust it for acquisitions or dispositions just because we’re getting pretty far back in the past at that point. We’re very comfortable that for across all of our domestic properties that we can be within that range or possibly exceed it. And exceeding it will be driven mostly by our — the pricing environment. but we’re comfortable with that and that compares to 2019.
