[US Stocks: Stock Discovery] Casino Sector: Las Vegas Breaks Away from "Gambling City" | US Stocks, Industry Trends and Stock Commentary | Money-Cri Monex Securities' Investment Information and Media Useful for Money

MGM Resorts International, a major casino operator in the United States

Transition to the City of Entertainment

MGM Resorts International [MGM] is a leading casino operator in Las Vegas, focusing on entertainment business centered around casino resorts. It operates 16 casinos in the United States and 2 in Macau (as of the end of 2024).

For the fiscal year ending December 2024, the revenue by segment showed that the Las Vegas division stagnated with a year-on-year increase of 0.2% to $8.816 billion, but it still accounted for 51.1% of total revenue, remaining above 50%.

Las Vegas Division: The revenue from the casino business is about 20%.

The casino resorts operating in Las Vegas include "Aria," "Bellagio," "Cosmopolitan," "MGM Grand," "Mandalay Bay," "New York-New York," and "Luxor." A characteristic of the Las Vegas division is the low revenue ratio from the casino business. The revenue from the casino business decreased by 7.9% to $1.96 billion, accounting for only 22.2% of the total Las Vegas division. This percentage has been declining year by year, symbolizing that Las Vegas has transformed from a gambling city to an entertainment city.

In the Las Vegas division, the sales ratios for hotel rooms and dining are 35.8% and 26.7%, respectively, surpassing the casino business. The sales ratio for entertainment and retail business is 15.2%.

Regional Department: US Operations Outside of Las Vegas

The regional division consists of U.S. operations excluding Las Vegas. Major casinos & hotels include the Borgata in Atlantic City, New Jersey, known as the "Las Vegas of the East Coast," as well as MGM Grand Detroit in Michigan, MGM National Harbor in Maryland, and MGM Springfield in Massachusetts.

Macau Division: Expanding through Hong Kong-listed subsidiary

The Macau division is developed through its Hong Kong-listed subsidiary, MGM China, which has a 56.0% stake. Although its entry into the Cotai area of Macau, where massive casinos are clustered, was delayed, resulting in a lower market share in Macau, it has since made a comeback and risen to third place among the six companies.

In the Macau sector, the proportion of casino operations in sales is 86.9%. The casino industry in Macau is strengthening MICE (meetings, incentives, conferences, and exhibitions) and aims to shift towards a Las Vegas-style entertainment industry, but it seems that it will still take time to break away from being known as the "Gambling City."

[Figure 1] MGM Resorts International [MGM]: Performance Trends (Unit: Million Dollars) Source: Created by DZH Financial Research from LSEG *The end of the term is December

[Chart 2] MGM Resorts International [MGM]: Weekly Chart (Moving Averages Green: 13 Weeks, Orange: 26 Weeks) Source: Monex Securities website (as of April 3, 2025)

Caesars Entertainment [CZR], digital sector is the growth engine

Expanding through proactive M&A

Caesars Entertainment [CZR] was established when Eldorado Resorts acquired Caesars Entertainment Corporation in 2020 and changed its name to the current one. Founded in 1973, Eldorado Resorts entered the casino business by launching the Eldorado Hotel Casino in Reno, Nevada. Since 2005, the company has actively pursued mergers and acquisitions (M&A), expanding its operations by acquiring MTR Gaming Group in 2014, Isle of Capri Casinos in 2017, Tropicana Entertainment in 2018, Caesars Entertainment in 2020, and William Hill in 2021. As of the end of 2024, it owns or operates casinos in 53 locations across 18 states.

The main business consists of the regional segment of US operations excluding Las Vegas, with sales for the fiscal year ending December 2024 expected to be $5.539 billion, a decrease of 4.1% from the previous year (accounting for 49.3% of sales). Major casinos include "Eldorado Resort Casino" in Reno, Nevada, "Horseshoe Baltimore" in Maryland, and "Caesars Atlantic City" and "Harrah's Atlantic City" in New Jersey.

In the Las Vegas division, casino resorts such as "Caesars Palace," "The Cromwell," "Flamingo," "Harrah's," "Horseshoe," and "Planet Hollywood" are developed. The sales ratio for the fiscal year ending December 2024 is 38.0%.

Digital Division: Sports Betting, Poker, Horse Racing, Online Casino, etc.

Caesars Entertainment's growth engine is its digital division. It consists of offline and online sports betting, poker operations, horse racing operations, and online casino operations. In sports betting, it partners with organizations such as the NFL for American football, the NBA for basketball, the NHL for ice hockey, and MLB for baseball.

In the poker business, we were involved in the world's largest poker tournament, the "World Series of Poker (WSOP)"; however, we sold the brand in 2024. Nevertheless, we retain the rights to decide the venue for the next 20 years.

In the sports betting, horse racing, and online casino businesses, services are of course provided through mobile applications. The revenue for the digital segment for the fiscal year ending December 2024 is expected to be $1.163 billion, an increase of 19.5% compared to the previous year, and although the revenue ratio is only 10.3%, growth continues.

[Figure 3] Caesars Entertainment [CZR]: Performance Trends (Unit: Million Dollars) Source: Created by DZH Financial Research from LSEG *The end of the term is December.

[Chart 4] Caesars Entertainment [CZR]: Weekly Chart (Moving Average Line Green: 13 Weeks, Orange: 26 Weeks) Source: Monex Securities website (as of April 3, 2025)

Las Vegas Sands [LVS] to Focus Management Resources on Asian Business

Las Vegas Sands [LVS] is a company built by Sheldon Adelson over his lifetime. Mr. Adelson served as the chairman and chief executive officer (CEO) until just before his death in January 2021.

In 2022, the company made a significant shift in its business direction. It sold off its operations in Las Vegas, such as the casino resort "The Venetian Resort Las Vegas," and concentrated its management resources on its Asian businesses in Macau and Singapore.

The core of our Asian operations is the casino resort located in Macau. Through Sands China, which is publicly listed in Hong Kong and holds a 72.3% stake, we operate properties such as "Sands Macao" on the Macau Peninsula and "The Venetian Macao", "Parisian Macao", and "Londoner Macao" in the Cotai area. Our market share of casino revenue is the highest among the six companies operating in Macau.

For the fiscal year ending December 2024, the revenue of the Macau business is projected to be $7.073 billion, an increase of 8.4% year-on-year, while the adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) is expected to rise by 4.6% to $2.327 billion, representing proportions of 62.6% and 53.1% respectively.

In Singapore, we are working on "Marina Bay Sands". It is a casino resort characterized by a massive pool located on the rooftop of a skyscraper. "Marina Bay Sands" has a revenue ratio of 37.4% and an adjusted EBITDA ratio of 46.9%.

[Figure 5] Las Vegas Sands [LVS]: Performance Trends (Unit: Million Dollars) Source: Created by DZH Financial Research from LSEG *The end of the term is in December.

[Chart 6] Las Vegas Sands [LVS]: Weekly Chart (Moving Averages Green: 13-week, Orange: 26-week) Source: Monex Securities website (as of April 3, 2025)

Wynn Resorts [WYNN], Casino Resort in Las Vegas and Macau

Wynn Resorts [WYNN] is engaged in a well-balanced manner in its Las Vegas operations, Boston operations in Massachusetts, and Macau operations. By segment, the highest revenue comes from the Macau operations, which are expected to reach $3.682 billion in the fiscal year ending December 2024, an increase of 18.8% year-on-year (representing 51.7% of revenues). Adjusted EBITDAR (Earnings Before Interest, Taxes, Depreciation, Amortization, and Rent) increased by 23.2% to $1.176 billion, accounting for 49.6% of the total.

The major casino resort "Wynn Palace," which opened in 2016 in the Cotai area, is the cash cow of the Macau operations. The revenue ratio from the casino itself is overwhelmingly high at 81.0%, and it seems that it will take more time to transition into a mature integrated entertainment business like the U.S. operations.

The Las Vegas business is centered around the casino resorts "Wynn Las Vegas" and "Encore." The revenue ratio is 36.1%, and the adjusted EBITDAR ratio is 40.0%.

In addition, we operate a casino resort in Boston, Massachusetts, and are also involved in interactive businesses such as online casinos and sports betting.

[Figure 7] Wynn Resorts [WYNN]: Performance Trends (Unit: Million Dollars) Source: Created by DZH Financial Research from LSEG *The end of the term is December.

[Figure 8] Wynn Resorts [WYNN]: Weekly Chart (Moving Average Lines Green: 13 weeks, Orange: 26 weeks) Source: Monex Securities website (as of April 3, 2025)

Red Rock Resort [RRR], expanding business around Las Vegas

Red Rock Resort [RRR] is a company established in 1976 that operates casino resorts in Las Vegas and its surrounding areas. The main facilities are located off the famous Las Vegas Strip, which sets them apart from the major players we have introduced so far.

The differences in business models are clearly reflected in the breakdown of sales. For the fiscal year ending December 2024, sales increased by 12.5% year-on-year to $1.939 billion, with casino revenue up 12.8% to $1.277 billion, reaching a sales ratio of 65.9%. The sales ratio for food and beverage is 18.6%, while the sales ratio for hotel room revenue remains at 10.3%.

The casinos with hotels are "Red Rock," "Durango Casino & Resort," "Green Valley Ranch," "Palace Station," "Boulder Station," and "Sunset Station." Except for "Palace Station," which is located on the Strip, they are all off the main thoroughfare.

These six facilities have table games in their casinos, but the main attraction is the slot machines. For example, "Red Rock" has 62 table games compared to 2,616 slots (as of the end of 2024). "Durango Casino & Resort" has 67 table games and 2,171 slots.

In addition, there are 10 facilities that have movie theaters and bowling alleys alongside the slot machine areas. Including these facilities, there are a total of 16,447 slot machines and a combined total of 320 gaming tables.

[Figure 9] Red Rock Resort [RRR]: Performance Trends (Unit: Million Dollars) Source: Created by DZH Financial Research from LSEG *The end of the term is in December.

[Chart 10] Red Rock Resort [RRR]: Weekly Chart (Moving Averages Green: 13 weeks, Orange: 26 weeks) Source: Monex Securities website (as of April 3, 2025)