MGM

Good afternoon, and welcome to the MGM Resorts International Q1 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 Commercial Officer and President of MGM Digital; Kenneth Feng, Chief Executive Officer of MGM China Holdings; and Howard Wang, Vice President, Investor Relations. Participants are in listen-only mode. After the company's remarks, there will be a question-and-answer session. In fairness to all participants, please limit yourself to one question and one follow-up. Please note, this conference is being recorded. Now I'd like to turn the conference over to Howard Wang.

Thank you, Rocco. Welcome to the MGM Resorts International Q1 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 will 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. This presentation is being recorded. I'll now turn it over to Bill Hornbuckle.

Thank you, Howard. 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 a consolidated net revenue growth in the Q1, driven by strengths 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 Q1, and we expect this to carry into the Q2.

The Q1 is typically our seasonally strong group and convention quarter of the year. We experience robust business related to both citywide conventions like CES and CONEXPO-CON/AGG, as well as in-house programs at Mandalay and MGM Grand. We achieved record Q1 convention ADRs and catering banquet revenue and drove increased production from our strategic relationship with Marriott. Importantly, we expect this momentum to continue into the Q2 with convention room night mix up 2 percentage points year-over-year to 20%. As the city evolves, we are making sure we are leaders in innovation. The gaming salon at Park MGM, which opened at Park MGM and received all regulatory approvals during the quarter, is another exciting step.

We developed a premium creative creator environment where gaming stories 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 be even more creative and launch an all-inclusive experience that 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 five MGM properties. The feedback we're getting from guests is very positive, and roughly one-third of the bookings are from first-time Las Vegas visitors. The program enhances our ability to convey our value proposition in an 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 2024 Super Bowl. In the near term, Allegiant will host the College Football Playoff National Championship in 2027 and the Final Four in 2028. That same year, the A's 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 US city will have assembled all four 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' 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 supported 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 this 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 as 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 Q1 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, multi-product states, our omni-channel 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 UK continue to drive our LeoVegas B2B B2C business, where the top line grew over 30%. These are also the next two stops for our sportsbook integration.

Further validation, our acquisition of Tipico's US 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. 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 the site and approved our mock-up rooms, which I found exceptional, and we are as 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.

With the Q1 of 2026 complete, our optimism across all various business segments continues to hold firm, especially in Las Vegas, will 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.

Thanks, Bill. I'll certainly join you in thanking all of our employees for their continued hard work and dedication this quarter. We really value your daily contributions and appreciate everything you do to 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 EBITDAR decreased by $62 million, which can be explained by just two items: an increase in self-insurance expense of $37 million and a decrease in business interruption proceeds of $31 million versus last year. Now that we're into the Q2, comparisons in our leisure offerings should become more normalized, especially toward 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 operations proved resilient in the Q1, exhibiting top-line growth of 2%. Similar to the Las Vegas story, segment-adjusted EBITDAR 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. We ended March on a very solid footing. Those trends continued into April. We closed on the sale of the Northfield Park operations earlier this month. 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 comparisons.

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. 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 that 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 Q1. The decrease in segment-adjusted EBITDAR of $13 million was primarily driven by the new branding fee 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 won Q1 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 Q1 where we earned branding fees from BetMGM, which amounted to about $1.5 million.

Separately, no quarterly distributions were made in the Q1, 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 Q1 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, 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. We'll keep you posted as the year progresses.

In Japan, we are expecting our funding for the balance of the year to be approximately $200 million-$225 million after investing approximately $140 million in the Q1. Much of it will be addressed with proceeds from the yen-denominated credit facility we closed last October. In essence, it's pre-funded for this year. During the quarter, we bought back about 2.5 million shares for $90 million. Over the last five years, we've decreased our share count by almost 50%. As a reminder, 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 re-accelerating share repurchases at our current valuation levels. I'll turn it back to Bill.

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, showed growth over 4%. Vegas, for the first time in six quarters, also showed growth at the top line. 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, but absolutely shows up and shows up often.

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. We do believe costs and our margins are sustainable now throughout the year. Japan is off to a great start, albeit early, but we're excited by our progress, we're excited by the design and ultimately the market that it will provide. BetMGM continues to track itself along, and you've seen additional and tremendous growth in Gary's overall Digital business for rest of world. With that, Howard, I will turn it open to questions.

All right. Thank you. We will now begin the question and answer session. As a reminder, in all fairness, please limit yourself to one question and one follow-up. Today's first question comes from David Katz at Jefferies. Please go ahead.

Hi, everyone. Thanks for taking my question. 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, you know, is that a strategy that we could, you know, see you deploy in, you know, other properties or other areas of the portfolio? Thanks.

Go ahead, Ayesha.

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 whether there are new strategies we could deploy alongside it, and whether it needs to be scaled or should be scaled to other properties. It's gonna be. We're gonna continue to watch, continue to refine over time, but we have been pleased with the reaction to date.

Understood. 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 and in general terms or qualitative terms, and how do you feel about sort of how that market rolls through the rest of this year? That's it for me.

Thanks, David. I'll kick it off. Kenny, turn it over to you. I think we feel really good about the balance of the year. You know, we've brought on many things last year in terms of capital enhancements and just the overall product. We're excited by that. We've got some more to go. We're adding some more suites, which it will be beneficial because I think everybody understands we're still under-suited. That'll be beneficial. It's always difficult to say Macau is "stable." I feel good about it. I feel very good about our market position and what we're doing and how we're doing it. Kenny, I don't know if you wanted some more color there.

Oh, thank you. Thank you, Bill. This is Kenneth from Macau. As we all know, Macau has always been competitive from day one. Macau market is a premium-driven one. It's not simply about supply. It's not like a purely quantitative play. It's more about quality. It is about understanding to serve the purpose of the target guests. Here at MGM China, first, we are very focusing on the products and the 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 the MGM Cotai site. You never saw such products in Greater China region. They are unique. They are different. They are refreshing. They are cozy. We opened, like, nearly for 1 week.

Our customers, they love it. Also, we just opened 40,000 square feet of premium gaming space at Cotai. We have about 40 tables, 15 private rooms. It's also new, the design, the construction, our services there. I can see a lot of customers, they are there playing even right now. Secondly, it's the products. We will continue to refresh our products. For example, we are in the designing stage about 100 suites at the MGM Macau side. 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 hospitality products or resort products.

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

Thank you very much.

Thank you. Our next question today comes from Daniel Politzer with JPMorgan. Please go ahead.

Hey, good afternoon, everyone, and thanks for the question. Bill or Jonathan, whoever wants to take it, I was hoping to talk a little bit about the Strip and the health of the customer base there. It seems like, you know, you're talking about this evolving health. Can you maybe talk about how the Q1 kind of progressed and how you kind of saw that resonate in your customer base? Then, you know, the expectations for how the Q2 should evolve, given your competitor last night had some comments on April.

Yeah. I'll start it, Jonathan. Kick it off. Look, we had interestingly in the quarter, we had an amazing January last year, so we had a tough kickoff and mostly in gaming. As the quarter progressed, and obviously, I think you heard yesterday, you hear it from us, CONAG was tremendous. As the quarter progressed, each month got successively better. March being obviously for us, the best month yet. You know, the market's changed. Consumer has changed. Obviously, we're focused on luckily for us, we have a lot of luxury product and brands that can cater to that. It's gonna continue. You know, despite many headwinds, whether they be air, gas, et cetera, we have yet to see a slowdown.

That doesn't mean, you know, over summer that can't happen, 'cause booking cycles still remain short. You know, we feel resilient about it. We feel good about it. You know, we look at air traffic coming into the community. Half of the traffic that was lost when who was it went bankrupt.

Spirit.

Spirit Airlines went bankrupt, has been picked up. We see two additional international flights coming into the market. Now it's a little early to tell what gas will mean to all of it, 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, June. We like the Q2, it's early. It's just the end of April, time to tell on these short-term bookings and where leisure will ultimately go.

Got it. Thanks. Then just on that self-insurance, $37 million, you know, I think that you guys had $13 million charged last year, maybe in the Q3 for this. Is this something just to think about more commonly that this could be impacting results and bearing in mind it does sound one time in nature? Just any better clarity or way to think about that going forward?

Sure, Dan. It's Jonathan. I mean, we certainly hope not. You know, this is something that we look at historically once a year. We of course, you know, we expense amounts 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. You know, the impact of that examination is this additional accrual that we took across our businesses in the Q1. You know, of course, we expect that that's adequate now. On the other hand, it's, you know, it has been an increasing cost in our business. It's the reason I wanted to call it out. Clearly, you know, but for that charge, our results this quarter would have been.

I think we'd all agree how we've been much better on an operating basis. We certainly, you know, we certainly hope that that's not going to be anything that recurs, and in fact, it is an unusual one-time item.

Got it. Thanks so much.

Thank you. Our next question today comes from Steven Wieczynski with Stifel. Please go ahead.

Hey, guys. Good afternoon. Bill, wanna stay with Vegas here for a little bit. You know, obviously, you noted, you know, you feel better about that value customer. It seems like the customer base is now somewhat stable. You know, 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, you know, do you think it's gonna be possible to grow Vegas EBITDA this year? I mean, you obviously kind of talked about the Q2, and you feel pretty good there. The Q1 obviously didn't put you guys off to the, you know, to the best start. Thanks.

Thanks, Steve, for the question. I wanna be clear about the leisure customer at the lower end of the spectrum. You know, for us, obviously, it's Luxor, Excalibur. Midweek is still a challenge. The good news is, it's like those two 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. To answer the core question, we do see growth through the balance of the year. It's gotta be tempered modestly, it's gotta be tempered with, you know, it's a crazy world out there right now.

Based on what we see, particularly in advanced bookings, et cetera, we still remain optimistic that we will have growth by year end.

Okay. Gotcha. Thanks for that, Bill. Second question. You know, we heard last night from Caesars Entertainment, and obviously you probably listened to that call, that they've been starting to work, you know, a little bit more aggressively with the LVCVA to help kind of find and identify bigger events or corporations to bring, you know, into the Vegas market. Wondering if you could maybe expand on that a little bit more and maybe help us understand, you know, if you're involved with that process and potentially, or and then what the potential upside could eventually be there.

Well, A, at 40,000 feet, yes, we're involved. Gary Fritz, who's sitting next to me, is on the board. We're, we have been and will continue to be active. Look, I think you know this about our business. Remembering we have over 4 million sq ft of our own, convention group space. We're big into tech. That sector continues to grow and is looking exciting. We've got some really good groups lined up for the summer. We've got Google coming back, and a few others. Cisco's coming in with a massive group this summer. You know, the question becomes, 'cause CONAG rotates, are there other groups in the world like CONAG? And the answer is yes, there are.

Yes, we have been cooperative and we'll 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's quote-unquote, 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 pick the community. They're not as easy just to pick up by, you know, some value proposition. There's generally more to it than that. No, we are active. No, we completely agree with the sentiment that was laid out yesterday, we'll continue to pursue it.

Okay, great. Thanks, Bill. Appreciate it.

Thank you. Our next question today comes from Brandt Montour with Barclays. Please go ahead.

Good afternoon, everybody. Thanks for taking my question. 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 know, you guys obviously have a decades of data in terms of first-time visitors to Las Vegas. Maybe you could kind of, you know, open the hood and share some, you know, metrics on sort of what a typical first-time Vegas visitor kinda behaves like, what the retention is like for a second trip, what you kinda can assume for flow through and profitability for that guest versus the corporate average?

I think the core thing to remember about first-time visitors is, you know, I can remember in Las Vegas where visitor profile would indicate that 20% of the visitors were first time. I think over recent years, that number has been in the mid to low teens. It dropped to 8% or 9% last year. I think all of the noise around Canada, which is a place many of them came from, is real. Our general Canadian business is down 30%-40%. Obviously, we hope to improve that. We've had a couple missions up into Canada, both through the convention center and ourselves to help that.

I think we have one planned 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. You know, it's interesting, the majority of first time visitors, actually, many of them come through conventions, and they come because they have to or they're told to, and then they learn about this place, and they go, "You know, this looks interesting and fun. I wanna come back." So they come back with family, friends, et cetera. You know, I think the only real differentiator for now is that international 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 know, Ayesha, if you wanna add anything, but.

No, I mean, in terms of customer behavior, we're certainly seeing the customers, you know, they are engaging in all aspects of the business, and so we've been pleased to see that response. You know, generally, I think in terms of what we're seeing from a flow through perspective, we're happy with the results. No concerns there either.

Great. Thanks for that. A second question would be a follow-up on Macau. Looking at the Q1, you know, 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 June the Q1, how should we kinda think about, you know, target margins for that segment under this new structure?

Yeah, it's Jonathan, and I certainly invite Kenny to comment as well. You know, 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. Then, reducing their EBITDA by the amount of the new fee would get you to the kind of the new going forward margin. I think we feel that that's safely in the mid-20s.

Perfect. Thanks, everyone.

Thank you. Our next question today comes from John DeCree at CBRE. Please go ahead.

Hi, everyone. I wanted to ask a question or two about the MGM Digital business. You know, revenue growth in the quarter was really strong and 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? Just throw my follow-up in there, how do we think about the kind of timeline to profitability in that MGM Digital business from here?

Hi, it's Gary. Thanks for the question. The real growth engine on the top line of the digital business has actually been the LeoVegas business to consumer business. Most of that concentrated in Europe with particular emphasis markets in the UK 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, you know, very little revenue. The core LeoVegas business to consumer business, as I believe noted in the prepared remarks, is growing north of 30% year-over-year. 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 halving 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. We're definitely anticipating the loss to materially narrow vis-à-vis last year, which then, you know, sets us up into 2027 for, you know, close to a break-even year, if not 100% getting there.

Great. Thanks, Gary. I appreciate it.

Sure.

Thank you. Our next question today comes from Shaun Kelley at Bank of America. Please go ahead.

Hi. Good evening, everybody. Thanks for taking my question. For whoever wants to take it, you know, Bill, I think you mentioned a bit earlier that you were still seeing a bit of midweek softness. Just wondering, you had called out a pretty large dynamic between your high and low properties and was just wondering if you could kind of update us on the trend line you're seeing there right now. Obviously, the all-inclusive side or offer should help maybe narrow that gap, you know, as we get towards the summer. 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've bridged a bit higher.

Yeah. Shaun, thanks for the question. Ayesha's probably best suited to start this off, so go ahead.

Yeah, sure, Shaun. You know, 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, you know, 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. 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, you know, we discussed this in the last quarter as well. We had seen some softness really starting, as you know, in toward the Q2 of last year. 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. I think that's been productive. You know, we're continuing to watch closely as the summer unfolds in terms of what happens with that customer. As Bill noted, we feel pretty good about the weekends. In terms of the midweek, we're hoping to continue to see more stability as the year progresses. 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. Also with some of the programming in the South Strip and Allegiant, we're seeing positive reaction that's positively impacting those properties as well.

I'm sorry.

No, please.

Shaun, and remembering MGM, we've got about 54,000 more room nights in the bucket this year, because obviously they were offline. It's pure math that's gonna. Yep.

Yeah, fair. Yeah, fair point on that. Thanks for that. As a follow-up, probably a good segue off of Allegiant. Bill, you mentioned in the prepared remarks a little bit about the NBA, which is a pretty exciting development. You know, it may be too early to speculate, you know, I think, you'd have a lot of vested interest in making sure that that ended up at one of your, you know, one of your venues particularly or, you know, potentially something like.

You know, so can you just talk to us about the strategy there for the city and then, you know, MGM's involvement to the extent you have a hand in, possibly where either a purpose-built stadium ends up or if one of the venues that exists right now could be used for that?

Yeah, Shaun, appreciate the question. Fun question. I will start by saying I'm already under three NDAs. The good news is, the NBA has clearly earmarked Las Vegas and Seattle. We have had huge interest and obviously whether and Las Vegas becomes the ultimate site or not, time to tell. That'll 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 and then what it means to Las Vegas when these 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. We're intimately involved in many of those conversations.

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. You know, we're open to all comers, and there has been extensive interest in Las Vegas. It's exciting. It's very exciting, actually.

Good to hear. Thanks.

Thank you. Our next question today comes from Barry Jonas at Truist. Please go ahead.

Hey, guys. I'm wondering if the current Iran conflict has impacted your UAE non-gaming project and its timeline. Then I guess, do you believe there's still a chance you could get gaming there or in Abu Dhabi? Thank you.

Barry, let me handle it. It hasn't impacted the ultimate timing, i.e., construction. For now, China State, who is building the project, continues, and the project remains on schedule. You know, we have not heard yet, nor do I think we will, given the environment for a while, on whether gaming will be permitted or not, reminding the balance of the group-crew who may not be as familiar with that project. They're allowing us to hold a quarter of a million sq ft of space for a potential casino on one of the podium floors there, it could be very exciting. For us, that is our key focus, not Abu Dhabi, to answer that part of the question. You know, right now, their business is struggling.

The tourism business in that particular neck of the world is down to like, you know, 15%, give or take. I'd say occupancies are down to that level. It'll take some recovery time no matter what happens here over the next couple of months. Long term, we remain very excited. The project is fascinating and fabulous. You know, we're gonna be all over it to continue to push both the agenda, the initiative, and the opening.

Great. Just sticking 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. I guess as a follow-up with Iran, any impact to construction costs that you're seeing? Thank you.

On the second question, no, not yet. Although, like everybody in the world, we're suspect 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 goodness. There's, you know, obviously a long way to go. We still have four years to go there. What was the first part of the question? First part of your question?

Oh, just about additional licenses now.

Oh, yeah, Japan, I'm sorry, yeah.

reopening the process.

Yeah.

Yeah.

They have started the process. They put some dates out. I think it runs through next spring. You know, time to tell, given the scale and scope and what we all went through, there's only two or three markets that could actually accommodate something 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. Knowing Japan as well as we do, I'll remind everybody we're in our seventeenth year of this, so I don't think it would impact us too quickly no matter what happened. Frankly, if they were able to get better terms and/or conditions, that would only work to our betterment.

With 120 million people to share, I'm not overly concerned to the contrary. Perfect. Thank you.

Thank you. Our next question today comes from Stephen Grambling at Morgan Stanley. Please go ahead.

Hey. Thank you. Can you hear me?

Absolutely, Steven.

Jonathan, you mentioned the multiple for Northfield versus the current trading, you know, was higher than where the baseline is. 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?

I meant it really as a way of hopefully monetizing the price of our shares. The, you know, 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, you know, at a, at a nice double-digit multiple, the sale of our Gold Strike property in Tunica at a, at the same double-digit multiple. Now, you know, Northfield Park, I mean, a, you know, a slot-only facility with no hotel. While performing nicely, I mean, a, you know, 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, you know, necessarily by the, you know, by the level at which these properties could be sold, and that was the case with all three of those transactions that I mentioned. I just think these valuations just highlight what we think is a real disconnect with the enterprise valuation. In short, no, it doesn't really cause us to say, "Hey, what other properties might we be able to sell?" That's usually informed by a strategic approach.

Fair enough. An unrelated question just on Macau. 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?

Well, I'll make one comment and let Kenny comment. you know, there's a lot of prop bets now. I mean, I think some baccarat tables have as many as six prop bets on them. That has changed the game, the nature of the game, and frankly, the odds of the game. Kenny, I don't know if you wanna comment a little further.

Yeah. Thanks, Bill. We are seeing increasing adoption of some side bets on gaming floors. As you know, side bets 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 DICJ. The history of side betting in Macau is still relatively short. These games only got popular after pandemic. Along with the 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. Thanks.

That's helpful. Thank you so much.

Thank you. Our next question today comes from Chad Beynon with Macquarie. Please go ahead.

Hi. Good afternoon. Thanks for taking my question. Wondering if you can talk about the international business in the Q1 in Las Vegas, either around Chinese New Year or Super Bowl. As, you know, those comps have been fairly easy over the past couple years. We're not anywhere near back to, you know, where the peaks were, but wondering if you're starting to see some nice improvement there that could carry forward throughout 2026.

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 changed back to where it was. We do see Mexico more often than ever. I mentioned earlier in my comments we had a tremendous baccarat tournament last weekend, this April. It was, as always, full of international play and 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.

I don't think there's anything out there other than, you know, an outright war, that would change that anytime soon.

Okay, thanks. On the LeoVegas or the digital business, there's been some contraction in public multiples on affiliate companies and sports data companies, even so on the B2C, given regulatory changes. 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? Thanks.

Yeah, listen, I think we feel really 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, don't see any glaring holes in our portfolio at the moment. It would take something extraordinary probably to see us deploy additional capital.

Thank you.

Thank you. Our final question today comes from Ben Chaiken at Mizuho. Please go ahead.

Hey, thanks for taking my question. I've got one kind a two-parter. If I recall, maybe clarify, I think there was a small fine in the prior year Q1. I don't know if that sticks out or if it's kinda just caught in the wash. Maybe you could help us think about Q2 last year and the correct base. You know, in Las Vegas, you reported around $710 million, $711 million. 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. Yeah, I guess, you think about the business today, do those three buckets still kinda make sense to you or have things changed? Thanks.

You, you're correct. There was a small fine in the Q1 of 2025 that we incurred that affected our results there. You know, 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. Q2 last year, you're correct that we were 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, a kind of a negative impact on hold during the Q2 last year. That was a roughly $20 million.

I guess those are probably the two things that I would call out that when I look at this quarter, we certainly have the benefit of the MGM Grand and those rooms back. You know, you never know how old it's gonna go, but last year in the Q2, we were impacted negatively by Hold.

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?

Well, not forget about it, that was a VIP event that we had. Part of that was also reflected in the Hold results that we had during the quarter. Again, we do V-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, you know, it's costly, we think it's really important for our customers and for that segment of the business. You know, that particular event we've had last year and we had again this year in the quarter.

Did well. Did well with it, I want to.

Yeah. Thank you.

Okay, thanks, Ben.

Thank you. 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.

Thank you, operator, and thank you all for listening in. I hope if nothing, we've shown that we're resilient, that this market is resilient, that people. This weekend's 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 with where we are and we're excited for the future. Thank you all.

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.