MGM is launching a $2.5 billion BetMGM push with a Vegas makeover and Global Expansion

MGM Resorts International is investing significantly and swinging for the big leagues in 2025. The enterprise has embarked on an ambitious plan to spend $2.5 billion on expanding BetMGM and allocate $300 million to enhancing MGM Grand in Las Vegas. MGM is betting on digital betting, revamping its brick-and-mortar operations, and expanding overseas. Here’s the latest on how the strategy is gaining traction and possible hurdles.

BetMGM’s $2.5 Billion Glow-Up

BetMGM, the online betting arm of MGM with Entain, is the star of this show. The CEO, Bill Hornbuckle, thinks it will earn $2.5 billion in revenue by the year's end, based on the $2.4-$2.5 billion forecast earlier, per the February update on PR Newswire. It’s a significant feat, especially as it is turning profitable with $250 million in earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs addition this year. Jason Halkeyboard told Yahoo Finance, “We’ve learned from our previous mistakes like spending $13 million on a Super Bowl ad that went nowhere, and we’re keeping it tight on costs while chasing new markets.”

Why’s it working? BetMGM has recently been doing well; it had the most significant betting day ever on Super Bowl LIX. Moreover, in 2024, BetMGM paid out $128.5 million worth of jackpots online. They have secured 28 markets, including Nevada and Ontario, and have a mobile application with synergy in MGM’s 37,000 rooms. The organization is interested in Brazil, which is opening online gaming and is home to millions of soccer fan bettors. It's a good turn but very stiff competition as DraftKings and Caesars won't be slacking as we advance.

$300 Million to Improve the MGM Grand

The MGM Grand is receiving a $300 million refurbishment in Las Vegas. The Mirage section just closed down, and Tropicana has gone dark; thus, room upgrades, new dining spots, and tech upgrades are needed to keep the MGM Grand competitive on the strip. The CEO of Wynn confirmed that demand currently exceeds supply in Las Vegas. Hornbuckle declared at the forum, "Vegas is still the pulse." So, they hope a glow-up will draw in the crowds.

MGM is taking advantage of its dual-play baccarat technology at the Borgata, which allows for simultaneous online and in-person play. The upgrades at the Grand might keep high rollers and app users returning. In 2024, MGM pulled in $17.2 billion from Vegas, up 7%, according to the earnings report, so this $300 million is less of a risk and more of a refresh for a cash cow. But with no new resorts, execution must be perfect, as Caesars is watching.

Casino Plans Around The Globe: Japan, Thailand, et cetera

MGM is not only focusing on their home turf but is also chasing casinos all over the world. The Osaka project in Japan is the centerpiece of MGM’s ambitions, with a 2029 opening date suggested. Hornbuckle is also excited about Thailand. Bangkok and Phuket are shortlisted for their seaside resorts under the Entertainment Complex Act with an estimated first-year revenue of $12 billion. There’s no overlooking Brazil, either. Due to rapid online betting growth, Brazil’s online markets are catching on. Statista believes global markets will hit $100 billion this year, and MGM wants a share. 

These aren’t pipe dreams. MGM has the capital as they registered a revenue of $17.2 billion in 2024, up 25% in Macau. According to the Bangkok Post, Japan’s $10 billion bet with partners and Thailand’s low 17% gaming tax versus the 40% of Macau is attractive. But it's not an easy task. As per a Bangkok Post poll, there is opposition, with a 59% local pushback in Thailand, and Japan is well-known for its burdensome red tape laws. Brazil’s regulations are still fuzzy. However, MGM is playing long ball here, and patience will be key.

What’s Driving the Push?

It all goes back to one thing: growth. MGM's Macau operations soared to 1.1 billion dollars in EBITDAR post-pandemic, reflecting a 25% increase. BetMGM's growth was significant because of digital operations, which only shows its importance today. Hornbuckle gave an account of what happened in the past. He revealed that overspending was the reason for the past pitfalls, but “scaled efficiency” is the aim now. U.S. betting is legal in 38 states, and global markets are also opening, which presents a tremendous opportunity.

MGM is not alone, though. DraftKings is looking toward prediction markets, and Caesars is working on a Vegas upgrade. The organization's distinguishing factor is BetMGM's online muscle and MGM Resorts' real-world glitz. They avoid negative publicity with increased Kindbridge support and a commitment to improving responsible gaming.

Potential Risks

It’s not all roses. BetMGM's $2.5 billion strategy for maintaining player engagement amid the stiff competition could lead to a quarter that could startle investors. As per Yahoo Finance, the stock is at $42.26, down from the $50 target. The Vegas upgrades must impress, or they throw good money down the drain. Around the world, Thailand’s public resistance and Japan’s postponements might slow things. According to Reuters, Thailand’s bill might not be finished until the middle of the year. The United Nations has also identified the emerging risk of casinos being used for money laundering in Asia. So, MGM must remain on top of these risks.

Conclusion

MGM is taking a significant risk for the future with the $2.5 billion BetMGM proposal and $300 million Las Vegas upgrade. They’re entering 2025, boasting record takings. Big jackpot wins, and digital activity could make them a more prominent heavyweight in gambling. BetMGM is buzzing, Vegas remains Vegas, and taking a swing internationally may pay off big time.