Key Moments:
- MGM Resorts International (NYSE: MGM) revealed a third-quarter loss driven by weaker Las Vegas Strip performance and notable one-time charges.
- The company recorded a $256 million goodwill impairment charge and $93 million in write-downs after stepping back from the New York casino licensing process.
- CEO Bill Hornbuckle conceded that missteps in pricing strategy negatively affected the customer experience in Las Vegas.
Financial Highlights and Las Vegas Performance
MGM Resorts International (NYSE: MGM) saw its shares take a hit in after-hours trading after releasing third-quarter results that fell short of expectations. The company attributed the quarterly loss to a slowdown at its Las Vegas Strip properties as well as significant non-cash charges from its exit from the New York casino race.
Revenue from Las Vegas Strip operations landed at $2 billion, a decline from $2.1 billion during the same period last year. MGM also reported EBITDAR of $601 million, down from $731 million year-over-year. The softness in Las Vegas was not a surprise to industry watchers, coming on the heels of similarly weak results from Caesars Entertainment (NASDAQ: CZR), which also cited challenges on the Strip in its recent earnings update.
Significant One-Time Charges Linked to New York Exit
MGM’s September quarter was impacted by a non-cash goodwill impairment charge of $256 million, alongside $93 million in additional non-cash write-downs. Both figures are the result of MGM’s decision to discontinue its pursuit of a license to convert Empire City Casino in Yonkers, NY into a standard casino.
| Financial Metric | Q3 Current Year | Q3 Prior Year |
|---|---|---|
| Las Vegas Strip Revenue | $2 billion | $2.1 billion |
| EBITDAR | $601 million | $731 million |
| Goodwill Impairment Charge (New York) | $256 million | N/A |
| Write-downs (New York) | $93 million | N/A |
Contributing Factors and Management Commentary
Multiple factors have weighed heavily on Las Vegas visitation, including international trade policies and economic pressures in California, a crucial feeder market. The article points out that 2025 is shaping up to be especially challenging for Strip operators, with MGM’s own practices contributing to negative performance.
MGM’s approach to customer pricing was singled out as a contributing factor. The company’s reputation for charging high prices drew unfavorable attention in the second quarter, with reports highlighting expensive items such as $26 bottles of water at Aria. These concerns continued over the summer.
“When we think about pricing and things that got everyone’s attention, whether it’s the infamous bottle of water, where a Starbucks coffee Excalibur cost $12, shame on us,” said CEO Bill Hornbuckle on a conference call this evening. “We should have been more sensitive to the overall experience at a place like Excalibur to those customers. You can’t have a $29 room and a $12 coffee.”
He further acknowledged MGM “control of the (pricing) narrative” during the summer months and confirmed the company has reviewed and adjusted its pricing policies following the missteps.
MGM’s Ongoing Commitment in New York
The industry took note of MGM’s decision to withdraw from the New York casino competition, especially as Empire City had been seen as a front-runner for one of the three available licenses. This move benefits other contenders in the region, but MGM is not intending to depart from Yonkers entirely.
“We have been and continue to be a proud partner of the city of Yonkers and the State of New York,” he said on the conference call. “We remain committed to operating the property in its current format and believe it will continue to enjoy success serving customers in the Yonkers and surrounding communities.”
- Author
Daniel Williams
