Title

Presentation

MGM Resorts International misses on earnings expectations. Reported EPS is $0.49 EPS, expectations were $0.56.

Operator: Good afternoon, and welcome to the MGM Resorts International First Quarter 2026 Earnings Conference Call. Joining the call from the company today are Bill Hornbuckle, Chief Executive Officer and President; Ayesha Molino, Chief Operating Officer; Jonathan Halkyard, Chief Financial Officer; Gary Fritz, Chief Officer and President of MGM Digital; Kenneth Feng, Chief Executive Officer of MGM China Holdings; and Howard Wang, Vice President, Investor Relations. [Operator Instructions] Please note, this conference is being recorded. Now I’d like to turn the conference over to Howard Wang.

Howard Wang: Thanks, Rocco. Welcome to the MGM Resorts International First Quarter 2026 Earnings Call. This call is being broadcast live on the Internet at investors.mgmresorts.com, and we have also furnished our press release on Form 8-K to the SEC. On this call, we will make forward-looking statements under the safe harbor provisions of the federal securities laws. Actual results may differ materially from those contemplated in these statements. Additional information concerning factors that could cause actual results to differ from these forward-looking statements is contained in today’s press release and in our periodic filings with the SEC. Except as required by law, we undertake no obligation to update these statements as a result of new information or otherwise.

During the call, we’ll also discuss non-GAAP financial measures when talking about our performance. You can find the reconciliation to GAAP financial measures in our press release and investor presentation, which are available on our website. Finally, this presentation is being recorded. I’ll now turn it over to Bill Hornbuckle.

William Hornbuckle: Thank you, Howard, and thanks again to all of our employees. Their continued dedication and execution drove another gold plus NPS record-breaking quarter, reinforcing the strength and sustainability of our business and our ability to deliver unique and lasting experiences that people find incredibly exciting. MGM Resorts once again delivered consolidated growth in the first quarter, driven by strength in digital and China. Net revenue for Las Vegas in Q1 grew on a year-over-year basis for the first time in over a year despite an exceptionally strong leisure comparative. We achieved this with solid group and convention business in the first quarter, and we expect this to carry into the second quarter. The first quarter is simply our seasonally strong group and convention quarter of the year, and we experienced robust business related to both citywide conventions like CES and ConAg as well as in-house programs at Mandalay and MGM Grand.

We achieved record 1Q convention ADRs and catering and banquet revenue and drove increased production from our strategic relationship with Marriott. Importantly, we expect this momentum to continue in the second quarter with convention room night mix to up 2 percentage points year-over-year to 20%. As the city evolves, we are making sure we are leaders in innovation. The MGM Gaming streaming lounge, which opened at Park MGM and received all regulatory approvals during the quarter is another exciting step. We developed a premium creator environment where gaming stores can come to life with plans to integrate celebrities into both the content and the broader guest experience. Another theme in our Las Vegas business has been our value. MGM has always offered opportunities for our guests seeking value experiences.

This quarter, we challenged ourselves to have been more creative and launch an all-inclusive experience at bundles hotel, dining, entertainment and all parking and resort fees. Guests can now choose to stay at Luxor or Excalibur with access to a wide range of dining options across 5 MGM properties. The feedback we’re getting from guests is very positive and roughly 1/3 of the bookings are from first-time Las Vegas visitors. The program enhances our ability to convey our value props in innovative ways that resonate with our guests. Ultimately, Las Vegas’ true value lies in delivering iconic one-of-a-kind experiences. We look forward to welcoming the Super Bowl back at Allegiant Stadium in 2029, particularly given our proximity to the venue, which drove outsized benefits during the ’24 Super Bowl.

In the near term, Allegiant will host a College Football Playoff National Championship in 2027 and the Final 4 in 2028. That same year, the Ace are set to begin their inaugural season in Las Vegas. During the quarter, Las Vegas has also been named a Target City for the NBA expansion team, and we are actively engaged in discussions with the league and respective team owners. If successful, no U.S. City will have assembled all 4 major professional sports leagues faster than Las Vegas. The ability to attract professional sports franchises and tentpole events exemplifies Las Vegas structural resilience. The city consistently advances through challenging operating environments by evolving alongside customer demand. Today’s consumers are decisively gravitating towards live events and experiential travel in Las Vegas and MGM is capturing that momentum.

Las Vegas’s ability to adapt its mix, its pricing and entertainment continues to differentiate the market and reinforce its resilience through economic cycles. Our regional operations have maintained steady market share, strong casino volumes reported solid results for the quarter, reflecting the premium positioning of these properties and their ability to drive consistent, reliable performance. At MGM China, we grew net revenues by 9%, while segment adjusted EBITDA was impacted by our new brand fee. Jonathan will remind you of those details in his section. Our market share for the quarter was 15.4%. And while February was negatively impacted by hold, we concluded the quarter in the month of March with a share of 17.3%, which has held steady into April.

We continue to invest in our competitive advantages in premium mass to support future growth and the suite conversion and renovated premium gaming areas at MGM Cotai were recently completed ahead of the upcoming Golden Week holiday. The next capital projects will involve renovating the suite product in Macau if we want to ensure our offerings stay fresh and ahead of market growth. While we will continue with targeted capital spending, we believe our operating expenses are appropriately sized and scaled to match our growth profile and our margins are sustainable. At BetMGM North America venture, Adam and Gary reported first quarter results a few weeks ago. We continue to prioritize the iGaming segment where underlying fundamentals are healthy and growing, and we are approaching $2 billion in annual revenue from operators.

We are moderating spend in sports to focus on returns, while our online sports business also continues to grow, and we remain focused on driving profitable growth and margin. Our core strengths remain unchanged: iGaming, multiproduct states, our omnichannel presence in Nevada and our focus on premium mass sports players. We remain disciplined and focused on executing our strategy in areas where we have a competitive advantage. MGM Digital reported another quarter of double-digit revenue growth as it continues to make progress towards profitability. Sweden and the U.K. continue to drive our LeoVegas B2C business, where the top line grew over 30%. These are also the next 2 stops to our sportsbook integration, further validation of our acquisition of Tipico’s U.S. sportsbook technology.

We’re continuing to invest in Brazil and plan to leverage our global marketing assets and in-house sportsbook capabilities on the significant World Cup opportunity a little later this year. And in Japan, over 40% of the foundation piles have been installed or completed. The first concrete floor has been poured, and the first structural steel has been erected. I recently visited and approved our markup rooms, which I found exceptional, and we are opportunistic as ever, keeping in mind we expect to be the sole licensing and operator in Japan upon opening. The population and visitation metrics are massive, as we’ve discussed, Japan has over 120 million residents and hosts over 40 million international visitors annually. MGM Osaka remains on time and on budget for 2030 opening.

For the first quarter of ’26 complete, our optimism across all various business segments continues to hold firm, especially in Las Vegas. We remain on track for growth this year. With that, I’ll now hand it over to Jonathan to provide additional details on our performance this quarter.

Jonathan Halkyard: Thanks, Bill, and I’ll certainly join you in thanking all of our employees for their continued hard work and dedication this quarter. We really value our daily contributions and appreciate everything you support our company and our guests. In Las Vegas, as Bill mentioned, we were able to grow net revenues despite the strong leisure comparison in the prior year. Segment adjusted EBITDA decreased by $62 million which can be explained by just 2 items: an increase in self-insurance expense of $30 million — of $37 million and a decrease in business interruption proceeds of $31 million versus last year. Now that we’re into the second quarter, comparisons in our leisure offerings should become more normalized, especially towards the latter part of the period.

We’re encouraged by the incremental momentum driven by our all-inclusive program as well as the convention strength we have on the books. Our regional operation proved resilient in the first quarter, exhibiting top line growth of 2%. And similar to the Las Vegas story, segment adjusted EBITDA decreased by $20 million, in part due to an increase in self-insurance expense of $9 million and a decrease in business interruption proceeds of $10 million versus last year. Borgata and National Harbor also faced some weather-related disruptions, but we ended March on a very solid footing, and those trends continued into April. We closed on the sale of the Northfield Park operations earlier this month. So just a reminder for your models, Northfield Park will no longer be in our regional operations going forward.

As usual, though, we’ll provide same-store results for easy comparison. Before diving further into our other business segments, I do want to briefly address this external factor that continues to pressure operating costs across our industry and drove a meaningful portion of the increase in our self-insurance expenses this quarter, and that’s the growing prevalence of frivolous litigation often backed by large pools of capital, including private equity. As we noted earlier, we were negatively impacted by $37 million in Las Vegas and $9 million across our regional operations this quarter. While we support a fair and balanced legal system, claims that lack merit, they divert capital management attention and resources away from investments to benefit employees, guests and our communities.

We’re focused on what we can control, which is enforcing high standards and process and the other operational elements of our business with the utmost care. Now let’s move on to MGM China, which exhibited solid performance in the first quarter. The decrease in segment adjusted EBITDAR of $13 million was primarily driven by the new branding agreement through which we received $23 million more in fees than in the prior year period. As a reminder, the brand fee increased from 1.75% to 3.5% of revenue starting this year. While this impacts segment adjusted EBITDAR, it results in higher cash flow for MGM Resorts. Moving to digital. Our BetMGM North America ventures at first quarter results reflected continued successful execution of refined player management strategy, delivering 6% growth in net revenue from operations and 11% growth in adjusted EBITDA.

This was also the first quarter where we earned branding fees from BetMGM, which amounted to about $1.5 million. Separately, no quarterly distributions were made in the first quarter given the seasonality of cash outlays, which included marketing investments around NFL postseason and March Madness as well as accrued annual compensation payouts. MGM Digital drove growth in net revenues of 43% in the first quarter and reported segment adjusted EBITDA losses of $26 million. We are continuing to migrate our sports books to our in-house platform such as BetMGM Sweden, and are investing in the opportunities presented by the upcoming World Cup in both Europe and Brazil. Specific to Brazil, we continue to have confidence in the total addressable market.

and we may drive investment beyond our original guidance, reflecting regulatory and tax developments as well as competitive intensity as we pursue our long-term share objectives, and we’ll keep you posted as the year progresses. In Japan, we are expecting our funding for the year to be approximately $200 million to $225 million after investing approximately $140 million in the first quarter. Much of it will be addressed with proceeds from the yen-denominated credit facility we closed last October. So in essence, it’s prefunded for this year. For the quarter, we bought back about 2.5 million shares for $90 million. Over the last 5 years, we’ve decreased our share count by almost 50%. As a reminder, and I can’t help myself — we sold Northfield Park for a 6.6x trailing EBITDA.

That’s a multiple significantly higher than what is implied by our current share price. With the transaction now closed and the proceeds received, we have increased flexibility to redeploy capital, including reaccelerating share repurchases at our current valuation levels. I’ll turn it back to Bill.

William Hornbuckle: Thanks, Jonathan. Before we go to questions, maybe I’d like to reiterate just a couple of things that were said. Obviously, our diversification strategy is proving successful. Consolidated revenues, again, should grow over 4% and Vegas for the first time in 6 quarters also showed growth at the top line. And as I think about the balance of the year, our group and convention business looks strong. Obviously, we have the benefit now of the MGM rooms for the entire year. We have easier leisure comparatives coming up. And the high end continues to demonstrate itself not only in gaming, but in non-gaming spend event-driven to be sure and live entertainment to be sure it absolutely shows up and shows up often. And regionally, despite headwinds and the ones that were mentioned in the overall economy, we’ve seen a solid performance, and we expect to continue to see through the balance of the summer.

MGM Macau continues to hold on to a major market share. We’re very proud of what’s been created and what they’re doing there. And we do believe costs and our margins are sustainable now throughout here. And Japan is off to a great start, albeit early, but we’re excited by our progress. We’re excited about the design and ultimately, the market that it will provide. And then BetMGM continues to track itself along and you’ve seen additional and tremendous growth in overall digital business for rest of world. So with that, Howard, I will turn it open to questions.

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Operator: [Operator Instructions] Today’s first question comes from Dave Katz at Jefferies.

David Katz: A lot of information here, and I took note of the all-inclusive offerings that you decided to introduce, I think, earlier in the quarter. Can you just talk about what kind of response you’re getting to that? Is that a strategy that we could see you deploy in other properties or other areas of the portfolio?

Ayesha Molino: Sure, David. This is Ayesha Molino. We’ve been really pleased with the response to the all-inclusive package. We’ve seen really steady momentum since we first deployed that and the customer response has been very good. As Bill noted in his remarks, we’re also seeing a significant portion of those customers as net new customers, which we believe is a positive trend line. We’re going to continue to evaluate it, understand customer response, understand some whether there are new strategies we could deploy alongside it and whether it needs to be scaled or should be scaled to other properties. So it’s going to be — we’re going to continue to watch, continue to refine over time, but we have been pleased with the reaction to date.

David Katz: Understood. And if I can just as my follow-up, talk briefly about Macau. Having been over there, the operations and the commentary seem relatively stable. But it’s always been a market that tends to have surprises around every corner now and again. How are you looking out at the rest of the year in general terms or qualitative terms? And how do you feel about sort of how that market rolls through the rest of this year? And that’s it for me.

William Hornbuckle: Thanks, David. I’ll kick it off and then Kenny turn it over to you. Look, I think we feel really good about the balance of the year. we brought on many things last year in terms of capital enhancements and just the overall product, and we’re excited by that. We’ve got some more to go. So we’re adding some more suites, which will be beneficial. I think everybody understands we’re still undersuited, and that will be beneficial. It’s always difficult to say Macau is stable, but I feel good about it. I feel very good about our market position and what we’re doing and how we’re doing it. And so Kenny, I don’t know if you want to add some more color there.

Xiaofeng Feng: Thank you, Bill. This is Kenny from Macau. As we all know, McCall has always been competitive from day 1. Macau market is a premium one. It’s not simply about supply. It’s not like a purely like a quantity play. It’s more about quality. So it’s about understanding to serve the purpose of the target guests. Here at MGM China, first, we are very focusing on the products and services. We want to make sure they are meaningful, effective and targeted to the premium customers. As Bill just mentioned, we opened like 63 at MGM Cotai side. You never source such products in Greater China area. They are unique. They are different. They are refreshing. They are cozy. And we opened like a yearly for a week, our customers they love it.

And also, we just opened like 40,000 square feet of like premium gaming space at Cotai area, we have about like 40 tables or 15 private rooms. This is also new the design, the construction of services there. I can see a lot of customers that are better playing even right now. Secondly, it’s the products, and we will continue to refresh our products. Like, for example, we are in the designing stage, about 100 suites at the Macau, MGM Macau side. and also some kind of gaming spaces, F&B outlets. We want to spend money wisely to really to reflect the purpose to serve the purpose of the customers, why they are in Macau. It’s not a typical like hospitality products or resort products. they are serving their targeted premium guests, premium customers.

Secondly, I want to see like the MGM has developed a pretty unique corporate culture here that encourage from the senior management from myself to all other senior management members for team members to react fast effectively to make changes in making changes in developing products and services which evolving with fast-changing customer tastes. So actually, reinvestment CapEx, products, services, they are owning one package. It is a package about how we take care of customers, I think that’s the key for us to continue to grow for the rest of this year and next year.

Operator: And our next question today comes from Dan Politzer with JPMorgan.

Daniel Politzer: Bill or Jonathan whoever wants to take it. I was hoping to talk a little bit about the strip and health of the customer base there. It seems like you’re talking about this evolving health. Can you maybe talk about the first quarter kind of progressed and how you kind of saw that resonate in your customer base? And then expectations for how the second quarter should evolve given your competitor last night had some comments on April?

William Hornbuckle: Yes. I’ll start it and Jonathan could kick it off. Look, we had — interestingly, in the quarter, we had an amazing January last year. So we had a tough kickoff in mostly in gaming. But as the quarter progressed, and obviously, I think you heard yesterday, you heard from us, ConAg was tremendous. And so as the quarter progressed, each month got successively better. March being obviously for us, the best month yet. The market has changed. Consumer has changed — obviously, we’re focused on — luckily for us, we have a lot of luxury product and brand brands that can cater to that, and it’s going to continue. Despite many headwinds, whether they be air, gas, et cetera, we have yet to see a slowdown. That doesn’t mean over summer, that can’t happen because booking cycles still remains short.

But we feel resilient about it. We feel good about it. We get air care, air traffic coming into the community. Half of the traffic that was lost when — who is it that went bankrupt? Spirit went bankrupt, has been picked up. We see a couple of additional international flights coming into the market. That’s a little early to tell what gas will mean to all of it. But to date, we feel good about it. Our April is fine. We just had a very successful Baccarat Tournament come through here last weekend. May will be a good month. And so we like the second quarter, but it’s early. It’s just the end of April. And so time to tell on these short-term bookings and where leisure will ultimately go.

Daniel Politzer: Got it. And then just on that self-insurance, $37 million, I think that you guys had a $13 million charge last year, maybe in the third quarter. this. So is this something just to think about more commonly that this could be impacting results and bearing in mind it does sound onetime in nature? Just any better clarity or a way to think about that going forward?

Jonathan Halkyard: Sure, Dan. It’s Jonathan. I mean we certainly hope not. This is something that we at historically once a year. We, of course, we expense amount every month, but we do a bit of a true-up once a year after that experience, and you remember it correctly, we decided to do it twice this year. And the impact of that examination is this additional accrual that we took across our businesses and the first quarter. So we — of course, we expect that, that’s adequate now. But on the other hand, it has been an increase in cost in our business. It’s the reason I wanted to call it out. Clearly, but for that charge, our results this quarter would have been. I think we’d all agree we’ve been much better on an operating basis, but we certainly hope that, that’s not going to be anything that recurs and in fact, it is an unusual onetime item.

Operator: And our next question is from Steve Wieczynski with Stifel.

Steven Wieczynski: So Bill, I want to stay with Vegas here for a little bit. Obviously, you noted you feel better about that value customer. It seems like the customer base is now somewhat stable. So I guess the question is based on what you’re seeing right now from a forward demand perspective, coupled with that healthy group and convention business, do you think it’s going to be possible to grow Vegas EBITDA this year? I mean, you obviously kind of talked about the second quarter and you feel pretty good there. But the first quarter obviously didn’t put you guys off to the best start.

William Hornbuckle: Yes. Thanks, Steve, for the question. Look, the one comment you did make, I want to be clear about the leisure customer at the lower end of sets — for us, obviously, it’s Luxor or Excalibur. Midweek is still a challenge. Now the good news is it’s like those 2 properties represent about 6% of our overall EBITDA. On the weekends, we are fine, the balance of the portfolio is performing from fine to good. And to answer the core question, we do see growth through the balance of the year. it’s going to be tempered modestly, and it’s got to be tempered with — it’s a crazy world out there right now. But based on what we see, particularly in advanced bookings, et cetera, we still remain optimistic that we will have growth by year-end.

Steven Wieczynski: Okay. Got you. And then second question, we heard last night from Caesars, and obviously, you probably listened to that call that they’ve been starting to work a little bit more aggressively with the LVCVA to help kind of find and identify bigger events or corporations to bring into the Vegas market. And wondering if you could maybe expand on that a little bit more? And maybe help us understand if you’re involved in that process and potentially and then what the potential upside could eventually be there?

William Hornbuckle: Well, it’s 40,000 feet. Yes, we’re involved. Gary Fritz, who’s sitting next to me is on the board. So we have been and we’ll continue to be active Look, I think you know this about our business. Remembering we have over 4 million square feet of our own convention group space. We’re big into tech. That sector continues to grow and it’s looking exciting. We’ve got some really good groups lined up for the summer. We’ve got Google coming back and a few other, Cisco is coming in with a massive group this summer. So the question becomes because ConAg rotates, are there other groups in the world like ConAg, and the answer is yes, there are. And yes, we have been cooperative and will go on with them from time to time field trips to go pursue some of this stuff.

I think you heard yesterday, it is true that some of it is “political” in that these groups mean a lot for each one of these communities that they’re currently in, whether it’s San Francisco or Dallas, you picked the community. And so they’re not as easy just to pick up value proposition. There’s generally more to it than that. But no, we are active. Now we completely agree with the sentiment that was laid out yesterday, and we’ll continue to pursue it.

Operator: Our next question today comes from Brandt Montour with Barclays.

Brandt Montour: So I wanted to key off of that question earlier on about the all-inclusive effort and encouraging commentary around first-time visitors to Las Vegas. You guys obviously have a decade of data in terms of first-time visitors to Las Vegas. Maybe you could kind of open the hood and share some metrics on sort of what a typical first-time Vegas visitor kind of behaves like what the retention is like for a second trip, what you kind of can assume for flow-through and profitability for that guest versus the corporate average?

William Hornbuckle: Brandt, I think the core thing to remember about first-time visitors is I can remember in Las Vegas where visitor profile would indicate that 20% of the visitors were first time. And I think over recent years, that number has been in the mid- to low teens, it drops below — it dropped to 8% or 9% last year. I think all of the noise around Canada, which were as a place — many of them came from is real. Our general Canadian business is down 30% to 40%. Obviously, we hope to improve that. We’ve had a couple of missions up into Canada a convention center and ourselves to help that. I think we have one plan later this summer that I’m actually going on. In terms of behavior, international has always been a big play there.

Mexico opened up a few years ago meaningfully with air traffic. And it’s interesting. The majority of first-time visitors actually many of them come through conventions and they come because they have to, they’re told to. And then they learn about this place and they go, this looks interesting and fun. I want to come back. so they come back with family, friends, et cetera. And so I think the only real differentiator for now is that internationally is hurting that number to see it grow again through this package has been great because it’s important, obviously, for the future growth of Las Vegas as we continue down the road here. I don’t know, Ayesha, if you want to add anything.

Ayesha Molino: I mean in terms of customer behavior, we’re certainly seeing the customers they are engaging in all aspects of the business. And so we please see that response. And generally, I think in terms of what we’re seeing from a flow-through perspective, we’re happy with the results. And so no concerns there either.

Brandt Montour: Great. Second question would be a follow-up on Macau. Looking at the first quarter, obviously, we’re in a new structure with the management fee change and those margins, obviously, on that basis were below what you’ve talked about on this call in the past. Under the new structure and sort of considering the comment you made about March’s exit rate for market share being a little bit better than in the first quarter. How should we kind of think about target margins for that segment under this new structure?

Jonathan Halkyard: Yes. It’s Jonathan. I’d certainly invite Kenny to comment as well. But even with this new structure, I mean the property, first of all, before the branding fee, we expect to be able to continue in the mid- to even high 20s in terms of its property level margin. And then reducing their EBITDA by the amount of the new fee would get you to the new going-forward margin. But I think we feel that safely in the mid-20s.

Operator: And our next question today comes from John Decree of CBRE.

John DeCree: I wanted to ask question or 2 about the digital business. Revenue growth in the quarter was really strong, a little bit more than we thought. I mean is that a comparison to the heavy marketing in Brazil last year? Was there something else in terms of revenue uplift? And then just my follow-up in there, how do we think about the kind of time line to profitability in that MGM digital business from here?

Gary Fritz: It’s Gary. Thanks for the question. The real growth engine on the top line, the digital business has actually been the Leo Vegas, the consumer business. So most of that concentrated in Europe with particular emphasis markets in the U.K. and Sweden. We’ve also had a lot of success launching the business in the Netherlands and expanding it there. Brazil helps, obviously, because it comps against very little revenue. But the core LeoVegas business and consumer business as I believe noted in the prepared remarks, is growing north of 30% year-over-year. So it’s not all down to Brazil. In terms of the path to profitability, I believe we’ve indicated in the past that we would see the loss this year for the digital segment having relative to last year.

We might see a little bit more investment this year than that, given some of the regulatory changes and tax changes in Brazil. but we’re definitely anticipating the loss to materially narrow vis-a-vis last year, which then sets us up into ’27 for close to a breakeven year, if not 100% getting there.

Operator: Our next question today comes from Shaun Kelley at Bank of America.

Shaun Kelley: For whoever wants to take it, Bill, I think you mentioned a bit earlier that you were still seeing a bit of midweek softness. But just wondering, you had called out a pretty large dynamic between your high and low properties. And I was just wondering if you could kind of update us on the trend line you’re seeing there right now. Obviously, inclusive side or offer should help maybe narrow that gap as we get towards the summer. But in terms of what you’re seeing right now and just trying to put into context the RevPAR performance for the company sort of relative to some of the market numbers we saw out there, which I think would have bridged a bit higher?

William Hornbuckle: Yes. Shaun, thanks for the question. Ayesha should probably best suited to start this off, so go ahead.

Ayesha Molino: Yes. Sure, John. With regard to the RevPAR question, I think that we look at it as in a couple of different ways. Overall, we think the fundamentals of the business are healthy from a RevPAR perspective. And from an ADR perspective as well as an occupancy perspective, particularly among the luxury portfolio, we’re seeing real stability and growth in some segments, and all of that’s been positive and all indications forward-looking remain good there as well. In terms of the lower end of the portfolio, I mean we discussed this in the last quarter as well. We had seen some softness really starting, as you know, in the second quarter — towards the second quarter of last year, and that’s been pretty consistent. We have been deploying strategies against it.

As you know, with the all-inclusive as well as with overall cost control there, and I think that’s been productive. We’re continuing to watch closely as the summer unfolds in terms of what happens with that customer. But as Bill noted, we feel pretty good about the weekend in terms of the midweek. We’re hoping to continue to see more stability as the year progresses. And certainly, I think there are pockets where we have evidence of that, whether that’s convention group business continuing to stabilize, including those properties midweek. And then also with some of the programming in the South Strip Allegiant, we’re seeing positive reaction that’s positively impacting those properties as well.

William Hornbuckle: Shaun, and remembering MGM, we’ve got about 54,000 more room nights in the bucket this year because obviously, they were offline. So just as clear math, that’s going to, yes. .

Shaun Kelley: Yes, fair point on that. And then as a follow-up, but probably a good segue off Allegiant, Bill you mentioned in the prepared remarks a little bit about the NBA, which is a pretty exciting development. It may be too early to speculate, but I think you have a lot of vested interest in making sure that, that ended up at one of your venues, particularly or potentially something like. So can you just talk to us about the strategy there for the city and MGM element to the extent you have a hand in possibly where either a purpose-built stadium ends up or if one of the venues that exist right now could be used for that?

William Hornbuckle: Yes, Shaun, I appreciate the question. Fun question. I will start by saying I’m already under 3 NDAs. So the good news is the NBA has clearly earmarked Las Vegas and Seattle. We have had huge interest and obviously, whether T-Mobile becomes — and Las Vegas becomes the ultimate side or not time to tell. Obviously, it will be up to the Board of Governors sometime next year. That said, we’re excited by it, how could we not be. We’ve all seen the success in what it means to Las Vegas with the sports teams come. T-Mobile is part of that conversation, whether it’s short-term or long-term, all roads lead to it for now because the league has expressed interest to host a team as early as 2028. And so we’re intimately involved in many of those conversations.

And I hope, I believe if the answer is — well, yes, or no. I think we’ll know hopefully by this time next year. A process is beginning to start. We’ve been asked how we would position T-Mobile for any and all bidders, and we’re beginning to do that with our partner at AEG and Bill Foley. But we’re open to all comers and there has been extensive interest in Las Vegas. And so it’s exciting. It’s very exciting, actually.

Operator: And our next question today comes from Barry Jonas at Truist.

Barry Jonas: I’m wondering if the current Iran conflict has impacted your UAE nongaming project and its time line? And then I guess do you believe there’s still a chance you could get gaming there or in Abu Dhabi?

William Hornbuckle: Barry, let me hand — it hasn’t impacted the ultimate timing, i.e., construction. For now, a China state who is building the project continues, and the project remains on schedule. We have not heard yet nor do I think we will, given the environment for a while whether gaming will be prevented or not, reminding the balance of the group crew who may not be as familiar with that project. They’re allowing us to hold 0.25 million square feet of space for a potential casino on one of the podium floors there. And so it could be very exciting. For us, that is our key focus, not Abu Dhabi, to answer that part of the question. Right now, their business is struggling. The tourism business in that particular neck of the world is down to like or take.

I’d say occupancies are down to that level. So it will take some recovery time no matter what happens here over the next couple of months. But long term, we remain very excited. The project is fascinating and fabulous. And so we’re going to be all over to continue to push both the agenda, the initiative and the opening.

Barry Jonas: Great. And then just thinking on international development for Japan, I guess they’ve reopened the process for additional licenses in the country. Curious how you think that potentially impacts your 2030 project? And then I guess as a follow-up with Iran, any impact to construction costs that you’re seeing?

William Hornbuckle: And on the second question, no, not yet, although like everybody in the world with respect to cost of inflation and cost of goods, a lot of it — a lot of our concrete and steel has been contracted. So that’s the good news. But there’s obviously a long way to go. We still have 4 years to go there. What was the first part of the question? First part of the question?

Barry Jonas: Just about additional licenses now, the reopening.

William Hornbuckle: Japan, I’m sorry. Yes. They have started the process. They put some dates on I think it runs through next spring. Time to tell, given the scale and scope and what we all went through, there’s only 2 or 3 markets that could actually accommodate something that I think that would make sense and be successful, whether there’s the political will at the end of the day to do that or not time to tell. We’ve all witnessed first time around that there was not. And then knowing Japan as well as we do, I’ll remind everybody, we’re in our 17th year of this. So I think it would impact us too quickly no matter what happens. And frankly, if they were able to get better terms and/or conditions that would only work to our betterment. And with 120 million people to share, I’m not overly concerned to the contrary.

Operator: And our next question comes from Stephen Grambling at Morgan Stanley.

Stephen Grambling: Can you hear me?

William Hornbuckle: Absolutely, Stephen. .

Stephen Grambling: So Jonathan, you mentioned the multiple for Northfield versus the current trading was higher than where the base line is. I guess does that make you reconsider monetizing other assets as a way to surface value? Are there things that you see out there that could ultimately end up being sold or rethought as a way again of surfacing value?

Jonathan Halkyard: It really has is a way of hopefully monetizing the price of our shares. We have — although it’s been for a few years now, I would say we’ve been fairly active in doing just that, starting with the sale of the Mirage at a nice double-digit multiple the sale of our Gold Strike property in Tunica at the same double-digit multiple. And now North Park. I mean, a slot-only facility with no hotel and while performing nicely, I mean, a pretty good multiple and well in excess of what our enterprise trades at. We’re guided in our dispositions more by our strategies and market positions than we are necessarily by the by the level at which these properties could be sold, and that was the case with all 3 of those transactions that I mentioned they’re all done really for strategic reasons.

I just think they do. These valuations just highlight what we think is a real disconnect with the enterprise valuation. So in short, no, it doesn’t really cause us to say, hey, what other properties might we be able to sell because that’s usually informed by a strategic approach.

Stephen Grambling: Fair enough. And then an unrelated question just on Macau. It looked like the mass market hold was better than kind of the historical trend. Is there something structurally changing there as we think about either the player type or the bet types or even the technology being implemented that could make that sustainable?

William Hornbuckle: Well, I’ll make one comment and let Kenny comment. There’s a lot of prop bets now. I mean, I think some back tables have made prop bets. And so that has changed the game, the nature of the game and frankly, the odds of the game. Ken, I don’t know if you want to comment a little further?

Xiaofeng Feng: Yes. Thanks, Bill. We are seeing like increasing adoption of some side bets on gaming floors. As you know, like a side bet in general, carry a house advantage higher than the traditional games. We are rolling out some more side bets literally this week at MGM following some recent approval by the ICG. But the history of side being in Macau is still relatively short. These games only got popular after pandemic. Along with volatility in a premium dream market, we do not think it is the right time to adjust the mass — the theoretical mass hold we will keep monitoring the adoption of the games, the player and the GGR trends, et cetera.

Operator: And our next question today comes from Chad Beynon with Macquarie.

Chad Beynon: Wondering if you can talk about the international business in the first quarter in Las Vegas, either around Chinese New Year or Super Bowl as those comps have been fairly easy over the past couple of years. We’re not anywhere near back to where the peaks were. But wondering if you’re starting to see some nice improvement there that could carry forward throughout ’26?

William Hornbuckle: Chad, thanks for the question. Look, I would say, yes, to a limited degree. I mean, obviously, the very nature of what’s happened with our core Far East business in China and restriction of capital leaving that marketplace has not been eradicated, I guess, or change back to where it was. We do see Mexico more often than ever. I mentioned earlier in my comments, a tremendous backroom at this — last weekend, this April. And so we — and it was, as always, full of international land players. The good news is despite the overall traffic decline international, as I was mentioning earlier, mostly driven by Canada. When it comes to rated play and particularly premium-rated play, it’s very healthy, and that hasn’t changed. And so — and I don’t think there’s anything out there other than an outright or that would change that anytime soon.

Chad Beynon: Okay. And then on the LeoVegas or the digital business, there’s been some contraction in public multiples on affiliate companies and sports data companies and even so on the B2C given regulatory change. What’s your appetite in terms of improving or growing the ecosystem from a tech standpoint to just grow that business at a time when multiples might be attractive?

Gary Fritz: Yes. Listen, I think we feel confident about the assets that we have under the hood right now. We were very deliberate in assembling the portfolio of assets that we did. We didn’t buy sort of the most obvious shiny new thing. We were very deliberate turned over a lot of rocks and assembled the portfolio that we did. I think we’ve mentioned before, we feel we’re largely fully deployed in terms of capital commitment to the International and MGM Digital business. can never say never, but I don’t see any glaring holes in our portfolio at the moment. So it would take something extraordinary probably to see us deploy additional capital.

Operator: And our final question today comes from Ben Chaiken at Mizuho.

Benjamin Chaiken: I’ve got one kind of 2-parter. If I recall, maybe clarify, I think there was a small fine in the prior year 1Q. I don’t know if that sticks out or if it kind of just gets caught in the wash — and then maybe you could help us think about 2Q last year in the correct base. In Las Vegas, you reported around $710 million, $711 million, but I think you flagged $60 million of headwinds, $20 million from grand, $20 million from some event spend and $20 million from hold, I believe, I guess if you think about the business today, do those 3 buckets still kind of make sense to you? Or have things changed?

Jonathan Halkyard: You’re correct. There was a small fine in the first quarter of 2025 that we incurred that affected our results there. And so that’s one of those things we have those types of not fines, but we have those types of relatively small impacts one way or another in our results pretty much every quarter. Second quarter last year, you’re correct that we are underway with the renovation at the MGM Grand during the quarter that affected us for pretty much all of the year. We did have, I think, kind of a negative impact on hold during the second quarter last year. That was roughly $20 million. And so I guess those are probably the 2 things that I would call out that when I look at this quarter, we certainly have the benefit of the MGM Grand in those rooms back. And then you never know how old is going to go. But last year, in the second quarter, we were impacted negatively by hold.

Benjamin Chaiken: And then, I guess, the event, the $20 million event, is that just kind of like maybe forget that one? Or how are you thinking about it now?

Jonathan Halkyard: Well not forget about it, but that was a VIP event that we had. And part of that was also reflected in the hold results that we had during the quarter. But again, we do VIP marketing events in our business, whether it’s Chinese New Year, we just had actually the same VIP marketing event this past weekend, which is it’s costly, but we think it’s really important for our customers and for that segment of the business. So that particular event we’ve had last year and we had again this year in the quarter.

William Hornbuckle: And did well. And did well with it.

Operator: Thank you. And ladies and gentlemen, this concludes our question-and-answer session. I’d like to turn the conference back over to Bill Hornbuckle for any closing remarks.

William Hornbuckle: Thank you, operator, and thank you all for listening in. I hope there’s nothing we’ve shown that we’re resilient that this market is resilient, that people — and this weekend is another good example. I think we have Morgan Wallen here at Allegiant. People are still excited by what we do. And despite all the noise in the world, and we all know there’s a lot, we’re pleased where we are and we’re excited for the future. So thank you all.

Operator: Thank you. That concludes today’s conference call. We thank you all for attending today’s presentation. You may now disconnect your lines, and have a wonderful day.

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