MGM Resorts International (MGM) Q1 2022 Earnings Call Transcript

MGM Resorts International  (NYSE: MGM) Q1 2022 earnings call dated May. 02, 2022

Corporate Participants:

Andrew Chapman — Director of Investor Relations

William J. Hornbuckle — Chief Executive Officer and President

Jonathan Halkyard — Chief Financial Officer

Corey Sanders — Chief Operating Officer

Analysts:

Joseph Greff — JPMorgan — Analyst

Carlo Santarelli — Deutsche Bank — Analyst

David Katz — Jefferies — Analyst

Shaun Kelley — Bank of America — Analyst

Thomas Allen — Morgan Stanley — Analyst

Robin Farley — UBS — Analyst

Dan Politzer — Wells Fargo — Analyst

John DeCree — CBRE Securities — Analyst

Chad Beynon — Macquarie — Analyst

Barry Jonas — Truist Securities — Analyst

Ben Chaiken — Credit Suisse — Analyst

Presentation:

Operator

Good afternoon, and welcome to the MGM Resorts International First Quarter 2022 Earnings Conference Call. Joining the call from the company today are, Bill Hornbuckle, Chief Executive Officer and President; Corey Sanders, Chief Operating Officer; Jonathan Halkyard, Chief Financial Officer and Treasurer; Hubert Wang, President and Chief Operating Officer of MGM China; and Andrew Chapman, Director of Investor Relations. [Operator Instructions] Please note this conference is being recorded.

Now, I would like to turn the call over to Andrew Chapman. Please go ahead.

Andrew Chapman — Director of Investor Relations

Good afternoon, and welcome to the MGM Resorts International first quarter 2022 earnings call. This call is being broadcast live on the internet at investors.mgmresorts.com, we have also furnished our press release on Form 8-K to the SEC. On this call, we’ll 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 this call, we will also discuss non-GAAP financial measures in talking about our performance. You could 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 will now turn it over to Bill Hornbuckle.

William J. Hornbuckle — Chief Executive Officer and President

Thank you, Andrew, and good afternoon and thank you all for joining us today. I’d like to begin today’s call by once again thanking our employees of MGM Resorts for the determination, agility, perseverance and commitment to assets that helped fuel another strong quarter for our company. We were challenged in January by the omicron variant, but pivoted quickly into recovery mode being to multiple all-time EBITDAR record at several of our Las Vegas and regional properties in March. These results showcase the strength of our talented team across the country. Our focus on operational efficiency, and the continued strong demand for the service and experience we provide at MGM Resorts.

Today I want to acknowledge and thank our employees again for all that they do every day to take care of our guests and each other. As a company, we remain laser focused on our strategic plan and our long-term vision to be the world’s premier gaming entertainment company. As a reminder, our strategic plan consists of the following four priorities, investing in our people and our planet, providing unique experiences to our guests by leveraging data-driven customer insights and digital capabilities, delivering operational excellence at every level, and allocating our capital responsibly to yield the highest return for our shareholders.

Over the last several quarters, we’ve discussed the meaningful steps we’ve taken to simplify our corporate structure and monetize real estate assets to meaningfully bolster our domestic cash position. We reached another important milestone in this journey, Friday, April 29, we closed the strategic transaction with MGM Growth Properties in VICI. I’d like to thank James Stewart, and Andy Chen and the Board and employees of MGP for all support and for the great relationship we’ve built over the years.

Our transaction with VICI allowed us to fully deconsolidate MGP from our financial reporting and it also netted us approximately $4.4 billion in cash, which we will use to invest in our core business, will also continue to pursue meaningful growth opportunities. One such opportunity is our announcement today of the tender for LeoVegas. Our success with BetMGM, United States gives us more conviction than ever about the potential for digital gaming and our ability to grow share in the exciting new marketplace. And with this conviction, we are expanding internationally with the team at LeoVegas. Its strong technology platform and pipeline for growth present a compelling opportunity for our business to grow online.

We’d like to thank the management team at LeoVegas for the professionalism and support throughout the process, and we look forward to working with that team when the deal closes in the second half of this year. Another opportunity that we’re quite excited about is the pursuit of a commercial gaming license in New York. The recently enacted fiscal year ’23 budget, includes provisions that will allow the issuance of up to three new licenses in the State. We’d like to thank Governor Hochul, a New York Legislature for getting this important issue across the finish line. We’re eager to begin the RFA process and share our vision for the future of the property in Yonkers, where if we receive a license, we plan to replace the existing VLTs for slot machines and have table games through our existing casino floor and construct new amenities on portions of our 97 acre site. Again, we’re excited by this opportunity and look forward to investing this discipline New York to create new jobs and foster economic growth in the region.

Turning to our Las Vegas growth strategy. We made solid progress towards our acquisition of operations of The Cosmopolitan of Las Vegas and are on track to close this quarter. The Cosmopolitan is an iconic brand with a loyal and complementary customer base that will further enhance our Las Vegas Strip portfolio. We’ve met with key leaders at The Cosmopolitan over the last weeks and months and are impressed by the quality of their team, as well as the culture and the brand that they can built. We look forward to welcoming all the CoStars of the Cosmopolitan to MGM Resorts and adding this existing portfolio — a property, excuse me, to our portfolio.

We’ve also made progress on the sale of the operations of The Mirage to Hard Rock International, which we announced last year. We are working closely with our regulators to ensure a smooth transition and expect this transaction to close in the second half of this year. Shifting to our international growth strategy. Last week, we submitted our area development plan to the government of Japan with our partners at ORIX and the City of Osaka. This is the final milestone before license decision will be made, hopefully in October of this year. We continue to work closely with the national government to obtain a license that will be hopefully awarded later this year and bring a fully integrated resort into Japan.

In the UAE, we continue to make progress and beginning the MGM brand family to Dubai, where we have a management agreement for an integrated resort being developed in partnership with Wasl. The project is broken ground in a development process, and we remain diligent for opportunities to bring the MGM brand to other locales around the world. During the BetMGM, we are now live in 23 markets with New York, Illinois, Louisiana and Puerto Rico coming online in the first quarter and Ontario launching in early April. In February, BetMGM committed 24% market share and active markets in both U.S. sports betting and iGaming, which put us in the number one position nationwide. BetMGM is the clear leader in iGaming, having reached 28% market share in February, the BetMGM management team will be able to provide more color on results and the strategy at their Investor Meeting on Thursday, May 12.

Finally, I’d like to spend a few minutes on our organic growth strategy. On February 1, we relaunched our loyalty programs, MGM Rewards with the goal to target high value non-gaming customers in addition to gaming customers, increase cross-property patronage and tier progression, while motivating benefits, and further activate BetMGM customers at our properties. We’ve seen solid results since the launch of MGM Rewards in Q1, particularly as it relates to our omnichannel growth strategy with BetMGM. In the first quarter, 57% of our MGM Rewards enrollments came via BetMGM driven by the Super Bowl, compared to 39% for the full year in ’21. We’ve committed to our strategy of building loyalty between our different channels and ultimately creating a seamless experience for our customers to play both online and in-person.

Before I turn this over to Jonathan, I’d like to hit a few highlights of our current trends and our future outlook. In Las Vegas, we maintained strong margins in the first quarter, a reflection of the sustainable operating learnings implemented from the pandemic, strong weekend occupancies and ADR were driven by a robust event calendar and we see that trend continuing into the second quarter. For the midweek, our occupancy is still behind ’19, but an improving mix of business and a growing group base will allow us to ramp in the remainder of the year. We continue to expect our convention room nights to reach 90% of 2019 levels in the back half of 2022.

Importantly, we are seeing increased spend levels for our Group’s year-to-date including catering and banquets. And to spotlight our international leisure trends, we are beginning to see positive indicators of the return of international flight capacity. In fact, by this summer, the LVCVA expects international flight capacity to return to 80% of pre-pandemic levels. Further highlight events in Las Vegas, we were honored to host the GRAMMYs of MGM Grand Garden, we welcome the BTS army to our properties for four sold out shows at Allegiant Stadium. This past weekend, we also hosted the NFL draft which activated the entire Las Vegas Strip. We also have big sporting events coming. With NCAA Men’s Basketball Regionals on tap for March of next year, along with the first of a kind Formula 1 Race in the Las Vegas Strip in November of ’23, and of course we’ll host the Super Bowl in February of ’24. All of these big events show the incredible progress this city has made as an entertainment and sports destination.

Looking to our regional properties with a very strong first quarter with competitive margins to 2021, and we are focused on driving strong rated gaming revenues by yielding our database with the highest valued players. Finally, I want to touch briefly on our operations in Macau. We continue to see headwinds in the short-term with public health policies impacting the ability for customers to enter Macau. Despite this, our 13% market share is higher than we have seen historically, and our properties are well positioned to capture premium mass business as volumes begin to return.

Concession renewal process is underway, and we remain confident in the government’s judicious and fair approach to this process. Macau is an important part of our future, and we will continue to work with the government to ultimately get our license renewed. We look forward to further promoting the long-term development of Macau’s gaming industry and supporting the government’s tourism and diversification goals for the region.

With that, I’ll turn it over to Jonathan to discuss the details of the quarter.

Jonathan Halkyard — Chief Financial Officer

Thanks very much, Bill, and good afternoon, everyone. I’d like to echo Bill’s words by thanking the entire MGM Resorts team for their professionalism and resiliency in the face of an ever-changing operating environment. I’d also like to thank the Cosmopolitan of Las Vegas team for their support as we plan for closing, and I look forward to welcoming the CoStars into the MGM Resorts family this quarter.

Now let’s spend a few minutes on our first quarter results in some detail. Our consolidated first quarter net revenues were $2.9 billion, and our net loss attributable to MGM Resorts was $18 million, a significant improvement when compared to net revenues of $1.6 billion and a net loss of $332 million in the first quarter of 2021.

Our first quarter Las Vegas Strip, net revenues were $1.7 billion and adjusted property EBITDAR for the Stirp was $594 million. Net revenues were down 1% on a same-store basis due to 343,000 fewer occupied rooms, nearly all in January. However, same-store adjusted property EBITDAR of $472 million was up 21% versus the first quarter of 2019, demonstrating our broad-based margin improvement.

First quarter occupancy was 78%, but it was a different story each month of the quarter. The omicron impact was significant in January, during which occupancy was 65%. We recovered to an occupancy of 78% in February and finished the quarter with occupancy of 90% in March. The strength continued into April, where we saw an occupancy of 92% on the Strip. Despite the pandemic impact, ADR in the first quarter was $197 or $184 on a same-store basis, which was $1 above the first quarter of 2019. And same-store excludes ARIA and Vdara in 2022.

Again, a different story each month for ADR. ADR had a similar cadence as occupancy, down 11% versus the first quarter of ’19 in January, then up 4% in February and up 9% in March, driven by strong weekend demand. Simultaneous increases in volume and pricing improved our financial performance dramatically, as we went through the quarter. Las Vegas Strip margins were 36% for the quarter and 35% on a same-store basis, an improvement of over 600 basis points versus 2019 on a same-store basis. We have the blueprint in place to sustain margins well above 2019 levels through our cost efficiency efforts and operating leverage.

As Bill mentioned, together with robust group demand, there is exciting programming in the second quarter that will drive increased leisure business in Las Vegas and support occupancies in the low-90s. Our first quarter regional net revenues were $891 million, an increase of 11% versus the first quarter of 2019. We delivered regional adjusted property EBITDAR of $313 million, which was 48% above 2019.

Our regional casino business was quite strong despite the typical seasonality in the business during the first quarter. Our casino revenues improved 23% versus the first quarter of 2019. Our first quarter regional margin of 35% grew 882 basis points versus 2019. Promotional expenses in the regional markets are stable and a few points below 2019 levels. Room nights were down in the first quarter due in part to staffing challenges, but that situation is improving nicely this quarter.

Moving to Macau. Net revenues of $268 million in the first quarter represents a 9% decrease compared to the first quarter of 2021. Adjusted property EBITDAR was a loss of $26 million in the first quarter versus a positive $5 million in the prior year quarter. Now, the current quarter also included a charge of $18 million related to litigation reserves. We’re confident in Macau that our product offering — in our product offering and we believe that once demand returns, we’re very well positioned to grow, particularly in our premium mass and mass segments.

Turning to BetMGM. Our 50% of BetMGM’s losses in the first quarter amounted to $92 million, which is reported as part of the unconsolidated affiliates line of our adjusted EBITDAR calculation. This was driven largely by the initial investment in New York, but we expect these losses to narrow in the upcoming quarters. The growth story for BetMGM is a key pillar in our long-term strategic plan. Connecting BetMGM with MGM Rewards allows us to develop a strong omnichannel link with our customers that will optimize our guest experience, both online and in-person.

Our first quarter corporate expense, including share based compensation, was $111 million, which included $9 million of transaction costs. We’re strategically investing our corporate expense in growth areas, including improvements to our IT infrastructure, enhancing our digital offerings and our IR efforts in Japan. And before we wrap up our prepared remarks, I would like once again to reiterate our approach to capital allocation. First, we’ll maintain a strong balance sheet with adequate liquidity. Second, we’ll invest where we have clear advantages, exercising prudence and measuring prospective returns for our shareholders. And finally, we’ll return cash to shareholders.

And I think our actions thus far this year amply demonstrate our priorities in allocating capital. We have the closure on Friday of our strategic transactions with VICI and realized $4.4 billion in proceeds for MGM, bolstering our liquidity and strengthening our balance sheet. This quarter, we announced or will close two strategic growth investments to augment our digital and Las Vegas market position, LeoVegas and The Cosmopolitan of Las Vegas.

Finally, during the first quarter, we repurchased 23.3 million shares for $1 billion. In April, we repurchased another 6.2 million shares. So since the beginning of 2021, we’ve repurchased 72.7 million shares for approximately $3 billion or 19% of our market capitalization. This activity brings our share count down to about 425 million shares.

With that, I’ll turn it back to Bill for his closing remarks.

William J. Hornbuckle — Chief Executive Officer and President

Thanks, Jonathan. We’ve made solid progress in the company coming out of the pandemic, and our operating models are strongest as it even been. I’d like to again thank all of our team members for their commitment and dedication to MGM Resorts. We’d not be in the position we are today without all of their hard work. Obviously, we are looking forward to the rest of ’22 and beyond with confidence and feel our best days are yet to come.

With that, operator, I’ll turn it over and take questions.

Questions and Answers:

Operator

Thank you. [Operator Instructions] The first question will come from Joe Greff with JPMorgan. Please go ahead.

Joseph Greff — JPMorgan — Analyst

Good afternoon. Everybody, hope you’re well. Bill, Jonathan, I want to ask you from where you sit, how you view your typical consumer and how they’re maybe behaving both in Las Vegas and regionals. Are you starting to see any slowdown, given obviously what’s out there in terms of higher gas prices, higher interest rates, an equity market that hasn’t really done well this year? And is that translating at all into any kind of pushback on hotel pricing, food and beverage pricing, particularly on the Strip? Any pushback on maybe out your kind of group bookings? And then are you rethinking maybe how you’re pricing hotel and F&B product?

William J. Hornbuckle — Chief Executive Officer and President

Thanks, Joe. Look, I think generally, the answer is we have not seen any of that yet. We’ve seen obviously a tremendous amount of strength in March, April has continued. I think maybe Corey is probably best suited to answer some of this, and maybe Jonathan can finish it up. But Corey, if you want to…

Corey Sanders — Chief Operating Officer

Sure. Joe, we’re not seeing anything — any change in customer behavior. Pricing power is still strong, putting betting revenues are breaking records, so we’re not seeing it.

Joseph Greff — JPMorgan — Analyst

Great. And then I know it’s relatively small or very small, LeoVegas. Can you talk about how that fits with your joint venture? And then can you just talk about that company’s exposure maybe to presently gray markets? And would you expect that business to maybe see a trend change in revenue trajectory as some of those gray markets tend to transition into legitimate more developed markets?

William J. Hornbuckle — Chief Executive Officer and President

Sure, Joe. Let me take that one. The first thing I want to start by just stressing our partnership with Entain as it relates particularly to BetMGM and what we’ve accomplished has never been better. I think we’ve finally really caught stride. You can see that in some of our numbers and our market shares, we’re excited for the next launch that the guys will go through and define some of the product that’s becoming our way. And you’ll hear a whole lot more about that on Investor Day on May 12.

As it relates to Entain specifically, we tried a year ago, as you know, to buy them. And I don’t think a whole lot has changed. You’ve probably watch the basis of their shares and our shares kind of go hand-in-hand. And we said then, and I’m going to repeat now, we need and want to diversify the revenues in this company. We absolutely thought the space was the right space when we did the BetMGM deal. It’s now been double validated by that, particularly the iGaming segment, which LeoVegas is extremely strong in. And so we made our move.

To your point, it’s not the world’s largest acquisition, it’s bite sized. It does, though, give us exposure to nine global markets that we don’t currently have. We love that team, what they’ve been able to accomplish over the last 11 years, they’ve had over the last five years, 16% compounded growth year-over-year. And so the team has been great, Gustaf and all he’s been able to accomplish. The Texas rate, the platform is — sits down on the cloud. So, all of the technology we looked at, and I can assure you, we look at it a lot. It’s first-class. And we’re going to get about 850 employees. There’s several 100 of them who are technologists, something our company can desperately use and need not only obviously for this effort, but potentially for other things long-term in the company. And so for us, all good things.

As it relates to markets, about 75% of their current markets are in regulated markets, there are a few and only but a few that are single-digit that we will close down because of our BetMGM, New Jersey being one of them. I think they — I don’t think, I know they had 1% share in New Jersey market last month. So I don’t see any of it as — consider any kind of real hurdle to get through. And they have demonstrated and we know because we have growth potential within that organization, that there are other things to go out and capture. I think this last quarter would demonstrate when others potentially have struggled, they again had a great quarter.

I think they just reported this morning, EUR14 million EBITDA, which is about a 35% gain over the first quarter of last year. So I couldn’t be more excited by the transition, even more so by the team and the ultimate technology and just the opportunity, I think, it provides us longer-term. It’s pretty exciting for us.

Joseph Greff — JPMorgan — Analyst

Great. Thank you.

Operator

The next question is from Carlo Santarelli from Deutsche Bank. Please, go ahead.

Carlo Santarelli — Deutsche Bank — Analyst

Hey, guys. Thank you for taking my question. Jonathan, maybe this one is best suited for you. But as you think about kind of the current kind of outlook for Las Vegas and you guys provided some color on the group stuff. Clearly, Las Vegas has had seasonality over the years. But as you think about the balance of 2022, and obviously, the challenging January with the variant spike and everything else that came with it, with group business coming back, is it kind of — do you get the sense that maybe the market could just build quarter-by-quarter as we move through the year?

And secondly, I did just want to revert back to something you guys said a couple of quarters ago, is that, when the group business returned, it would be a slight hindrance to margins, but greater EBITDAR dollars. As the cost structure sits today, I’m assuming you still feel pretty confident that, that’s what you’ll see?

Jonathan Halkyard — Chief Financial Officer

Yeah. Thanks. Let me take those two questions in turn. First of all, as the year unfolds, we do see the group business continue to build. In particular, the second quarter will be very strong for our group business, and that’s because, our team was able to rebook many of the group customers that canceled back in January into the second quarter.

So all that being said, our business, as we’ve grown it, we’ve diversified our revenue streams, is not as seasonal as you might think, that through our event strategy and through our marketing strategy, we’ve been able to really, I think, drive levels of business across the year that really keep our properties running at an optimal level. But the group business, of course, was down in the early part of the year, but we’re seeing it continue to grow and will exit the year at about 90% of 2019 levels.

As far as the margin dynamic you described, yes, clearly, as we bring back that important segment of the business, it’s going to drive additional EBITDAR. And depending upon the types of groups that we get, it may have a slight diminishing effect on the margins. The margins this quarter are a really interesting story. As you know, in Las Vegas, we reported about 36% EBITDAR margins for the quarter. But those started out in the low-30s and ended in the low-40s as we drove that additional occupancy. So generally speaking, occupancy is really good for margins in our business.

Carlo Santarelli — Deutsche Bank — Analyst

Understood. Thank you very much.

Operator

The next question is from David Katz from Jefferies. Please go ahead.

David Katz — Jefferies — Analyst

Good afternoon, everyone. Thanks for taking my question. I wanted to ask about LeoVegas a little bit, just having suit on it through the day. It looks as though it has an inherent CAGR growth rate the way it is. But are you able to change the brand? Does MGM sort of wind up on the shingle in some way? What do you need to accelerate that from? I think it’s a 16% CAGR that’s in some of the information out there. And what’s — where is the ceiling for this? What’s the long-term vision for it?

William J. Hornbuckle — Chief Executive Officer and President

David, I think we see it as a vehicle to continue to grow globally, and it’s a great starting spot because we, again, fundamentally liked the foundation of the company, both in management and technology, particularly in iGaming. LeoVegas in Sweden, they have a dominant share. They’re over 35% in the Nordics. We’re fifth-gen in markets from the Nordics and in Sweden, in particular, they have a dominant share.

So that’s of interest to us. They will use our — we, ultimately, if we are able to get this through, we’ll use our brands, MGM, Bellagio and others because, obviously, it will be our company. And one of the things that kept them restrained was capital. And, obviously, given the balance sheet, given our desires and our aspirations in this space, they won’t be capital restrained in the near-term. And it’s something that we hope to have them lean into, and we’re happy to help with that. We’ll be cautious about it, we’ll be, as always, wanting to understand growth and regulatory environments and all things that are out there. But again, we’ve seen them demonstrate their ability to grow both organically and with acquisition. And we have a couple of targets in mind with them to continue to grow that we think makes us a bigger piece of the pie for us and ultimately puts us on the map.

Jonathan Halkyard — Chief Financial Officer

If I could add…

David Katz — Jefferies — Analyst

Sure.

Jonathan Halkyard — Chief Financial Officer

So, David, if I could add one thing to that as well is that, well, we’re very proud of the progress we’ve made on our share repurchases or just over a year, we’ve repurchased 19% of the market cap of the company, and that was an important part of the asset light strategy. But this allocation of capital to a company like LeoVegas, and perhaps follow-on investment into that platform with other M&A opportunities, is exactly the — also the type of allocation of capital that we had in mind when we set about this strategy to put it towards digital gaming, higher growth verticals and a platform we could extend our brand internationally. So it really does complement our capital allocation strategy.

David Katz — Jefferies — Analyst

Understood. And if I can just follow-up quickly regarding Vegas, and I think you touched on this in a — from a few different perspectives. But as the mix rolls into April and the mix changes and we get — start getting more convention and midweek step backs, what happens to ADR as we roll through the year? Any thoughts about that would be helpful.

Corey Sanders — Chief Operating Officer

Yeah, David, it’s Corey. What the convention business will do is it will help us in our midweek ADR, which we’ve had a little bit less pricing power with that business that will allow us to yield up those rates. Our casino base continues to be strong, and we don’t see that business displacing that. To the contrary, we’ll displace the lower end package business before we do any of the casino business.

David Katz — Jefferies — Analyst

So up is the answer, more or less?

Corey Sanders — Chief Operating Officer

Yes.

David Katz — Jefferies — Analyst

Thank you very much.

Operator

The next question is from Shaun Kelley from Bank of America.

Shaun Kelley — Bank of America — Analyst

Thank you very much. Jonathan, I just wanted to start with margins. You gave an interesting trajectory there, just how the quarter unfolded related to the growth and improvement in occupancy. Any reason that we should be more cautious as we sort of move through the year relative to what you delivered in the March timeframe? I think one thing you’ve highlighted in the past is a little bit around mix shift. But has gaming remains pretty strong so far? Just maybe help us think about puts and takes on Las Vegas margins.

Jonathan Halkyard — Chief Financial Officer

Yeah. I mean, performance — it’s almost impossible to overstate just how strong our performance was in March. This company was firing on all cylinders and it was helped certainly by a very strong event calendar in the month. So, revenue levels to a property and margins in the Vegas market in the regions were very strong because of that. Going forward, there’s no meaningful changes to the cost structure that we’re going to see as we go through the year. The strength that we’re seeing in group demand and what that means for rates, particularly in midweek will be healthy for margins. The casino business has been particularly strong. As we’ve said on prior calls, we do in our business planning, expect some of that spend to normalize over the year. And to the extent that happens, is that could be a take on our margin levels. But like I said in the call, we’re certainly comfortable with margin levels being sustained in Las Vegas that are well above those that we delivered in 2019, and we certainly did that in the first quarter.

William J. Hornbuckle — Chief Executive Officer and President

And Shaun, Bill here, maybe just a little added color because I can’t help myself. So in January, in the midst of Omicron, we’re in the low-60s, Las Vegas margin was still 31%. And by that time, March rolled around and we reacted to the business that improved 1,000 basis points in March. Led by — and this is another thing I’ll brag on them because I’m proud of this for the team and the company particularly, Bellagio did — and we don’t normally give these, but I can’t help myself, Bellagio did $84.5 [Phonetic] million in EBITDA in March. Don’t go times 12 now. Having said that, it just shows the strength and it is a property 22 years into its history at an all-time month. And a lot of it was helped by margin. When you’re doing 41% margin, it just helps.

Shaun Kelley — Bank of America — Analyst

Thank you for the color. And then just as a follow-up, sort of a similar question, but on capital allocation this time. Obviously, I think the number given was 6.2 million shares repurchased in April. You kept a very strong pace as we look through Q1 and of course there was — I think, a little bit of a repurchase or a tender offer there by a single shareholder. So — can you just help us think about programmatic versus opportunistic as we think about the buyback pace going forward, obviously, a ton of cash in the door? So maybe just help investors think about the balance of the year and continuing some buyback in addition to all the other things you’re able to invest in?

Jonathan Halkyard — Chief Financial Officer

So we — in just over a year we’ve just done, just over $3 billion of share repurchases. I think it’s fair to say that this is a bit ahead of the pace that we might have predicted last year. And it’s because we’ve been opportunistic with opportunities the market presented in terms of the pricing of our shares, which we believe are undervalued. That being said, we now have largely come to the conclusion of the asset monetization strategy that we set out with the closure of the VICI-MGP transaction last week.

And we have before us a number of interesting M&A opportunities and other growth projects. Bill mentioned two of them, New York and of course, LeoVegas in our prepared remarks. So we’re going to keep powder dry to be able to jump on those opportunities as they present themselves. So I think it’s fair to say that our pace of share repurchases might be lower as we go through the balance of the year. But again, a lot of it is driven by opportunities the markets provides us.

Shaun Kelley — Bank of America — Analyst

Thank you very much.

William J. Hornbuckle — Chief Executive Officer and President

Thanks.

Operator

Our next question is from Thomas Allen from Morgan Stanley. Please go ahead.

Thomas Allen — Morgan Stanley — Analyst

Thank you. So one of your comments earlier piqued my interest that this LeoVegas acquisition was going to be potentially a platform for other deals. Can you just talk about that a little bit more? I mean, I think LeoVegas has the reputation of being really an iGaming-first platform. I know they use Kambi for the sports betting part of that business. Are you interested in Kambi [Phonetic] by a sports betting platform? What other opportunities do you see in the digital space? Thank you.

William J. Hornbuckle — Chief Executive Officer and President

Clearly, to launch, I think there — as the industry continues to expand, whether you talk about Africa, South America, Brazil, other places, we will continue to look at that through that vehicle. There are other like-minded acquisitions of scale in Europe that still exists, particularly Eastern Europe that potentially exist. And so look, recognizing it’s a bite size and midsized opportunity for us, the goal of buying it wasn’t to keep it there.

We’ve talked about diversifying revenue and ultimately cash flow, it’s going to take some volume to do that. And so this is our start into that genre. And we like that team from an acquisition perspective, they’ve got the right mindset and again we like the way that they think about the business. We like the way they market their business. Their margins have been good and for reinvestment in the business, never been great. And so we’ll use that. I don’t know about tomorrow, but I can expect very soon once we get through this transition and transaction, we’ll be back at looking how to grow that business, both organically and through acquisition.

Thomas Allen — Morgan Stanley — Analyst

All right. And then on the BetMGM side, I think last quarter, you talked about having about $450 million of losses this year. Do you think that that’s still a fair estimate? And then, like what are your latest thoughts on the competitive environment on the revenue environment for the U.S. sports betting and iGaming? Thanks.

William J. Hornbuckle — Chief Executive Officer and President

Look, first answer is yes. Second one is, I don’t want to take Adam’s thunder, if you tuned in May 12 at the Investor Day, they’ve got several hours of it, but generally good. From where we sit, we love what we see. We understand the noise around it all, but we’re seeing through it, particularly with iGaming. And so I think Adam and that team, Matt and company will be digging into it in some great detail, Joe.

Thomas Allen — Morgan Stanley — Analyst

Thank you very much.

Operator

The next question is from Robin Farley from UBS. Please go ahead.

Robin Farley — UBS — Analyst

Great. Yeah, I wonder if you could talk a little bit about what kind of returns you may be targeting in New York?

William J. Hornbuckle — Chief Executive Officer and President

Well, look, arguably, as we know to-date, the opening bid, and this is our — obviously, an RFP process is $500 million for license. We know that tax is currently set at an opening minimum of 10 and 25, [Phonetic] which is favorable. It’s kind of interesting, we’re talking about a $0.5 billion license fee as favorable. It’s the highest in the history of the industry by 5 times.

Having said that, we like where the governor went with it, we like the opportunity it creates. We had hoped to invest up to a couple of billion in the first round, Phase 1, to put us into the table games business, to expand some of the amenities, to put a much needed parking garage there, to put an entertainment facility there and potentially some other things, we think that will attract the kind of market that’s available to us both in the neighborhoods and the surrounding areas, like all of our stuff, we target mid-teens and beyond, and this wouldn’t be any different. And so I think that’s a good way to think about it.

Robin Farley — UBS — Analyst

Okay. Great. Thanks. And can you talk a little bit about LeoVegas, the tech capabilities and how that compares to what you have in the U.S.?

William J. Hornbuckle — Chief Executive Officer and President

Look, I would say the key differentiator there is it’s cloud-based. And therefore, when you talk about expansion and scalability and you talk about the ability to bifurcate the front-end from the back-end, it presents that fairly easily. And so we’re not running around having to deal with a bunch of hardware. We’re not running around and having to deal with code-based that goes back a decade or so. And so it enables us to be quick and scale quickly, probably the principle of two differentiators.

And then they’ve demonstrated the ability to in-house game studios and others to have the casino business is meaningful. Obviously, we’d like to think, and we’ve seen this through BetMGM when we put our brand on things, it works. It works exceptionally well. Some of the best games on BetMGM are MGM-branded games, and so we intend to do the same and grow that business from there.

And then I think the last thing and the thing that’s noteworthy both here and there is live dealer. It’s a space in a place we want to continue to push into. This will give us one of the vehicles to do that. And if you think about it, and you all understand some of the valuations in the industry when it relates to live dealer providers, at our core, it’s our stores that represent what they do. If we can’t do this in a fun and compelling and exciting way, then shame on us, so we think there’s a great opportunity to do that as well. And again, Vegas’ backbone and background enables us to do exactly that kind of offering.

Robin Farley — UBS — Analyst

Okay, great. Thanks very much.

Operator

The next question is from Dan Politzer with Wells Fargo. Please go ahead.

Dan Politzer — Wells Fargo — Analyst

Hey, good afternoon everyone. Thanks for taking my questions. So, I just wanted to hit one more on Las Vegas. Can you talk maybe about the booking trends across the different properties in your portfolio in terms of luxury versus core? Is there any discernible differences in bookings, just given the volatility in the air fares and fuel prices?

Corey Sanders — Chief Operating Officer

Dan, this is Corey. We’re not seeing anything different than we would have seen in the past. I mean, this luxury properties obviously aren’t — don’t have any challenges. Midweek when you don’t have convention business in the legacy properties have probably more — a little bit more of a pricing challenge, but that’s very similar to what we saw pre-COVID.

Dan Politzer — Wells Fargo — Analyst

Got it. And then just actually on the regionals, I think in the deck, you mentioned that staffing is expected to continue to ramp, but the margins in this business have been pretty remarkable in that mid-30s range. I mean, as we think about, you continue to ramp, bring back non-gaming amenities, maybe the labor and cost inflation that’s out there, how should we think about the cadence of the margin structure for the regionals business over time? Is this current rate a good enough level, or should we moderate our expectations over time?

Corey Sanders — Chief Operating Officer

I think we’re getting to the finer strokes in terms of the opening of non-gaming amenities, ones that are important but are not financially material enough to meaningfully move the margins, one way or another. So — and what’s happened also is — in recent months, we’ve been able — because of the labor availability has improved, cell capacity open that we really need in order to meet the demand. And that, of course, helps margins when we can have more customers in the hotel. So I think the impact going forward in the regional markets, on the amenities, on margins is going to be very small.

Dan Politzer — Wells Fargo — Analyst

Got it. Thanks so much.

Operator

The next question is from John DeCree from CBRE Securities. Please go ahead.

John DeCree — CBRE Securities — Analyst

Hi, Bill. Hi, Jonathan. Thanks for taking my question. I know the international business and group business is really just starting to ramp up now. But curious — or maybe Corey, if you have any insights as to the spending patterns of those customers as they come back to Las Vegas. We saw that revenue spending of the U.S. domestic leisure traveler and trying to get a sense of how well some of the other customer segments are spending when they’re actually getting back to Las Vegas?

William J. Hornbuckle — Chief Executive Officer and President

Let me kick this off, John, quick and turn it over to Corey. Kind of the international — one of the interesting things is, and I mentioned in my comments, the 80% return in international air. Despite the success we’ve seen so far, particularly in the last 90 days or last 75 days, Canada has not fully returned yet. And so, that’s good news and why. But the good news is, we’ve only seen about half of that come back. And so, we think there’s a substantial uptick to come when that finally opens up. We think Mexico is there. Europe’s been about half as well. And then, obviously, we have not seen much from the far East, whether it’s either leisure or at the higher end of the business.

Although, the international marketplace is holding up from a casino perspective. And so, I think the genesis of all of that between Canada, Europe and ultimately, whether it be six months, a year or God knows from now, the balance of Asia returning, it will all be accretive and additive to where we are today.

John DeCree — CBRE Securities — Analyst

Thanks, Bill. That’s helpful. Maybe one on Japan. I know you gave an update, hopefully, towards the end of the year, licensing process and if you’re successful, could you give us a ballpark sense of what a time line might look like from there, one of the probably most exciting projects you guys have on the horizon. Curious as, rough outline as to when you might be able to get a shovel and ground and potentially get moving, if the licensing process kind of goes under the current timeline?

William J. Hornbuckle — Chief Executive Officer and President

Yeah. Thanks, John, for the question. And we agree to think we have a crack in this market at scale and be one of the long-standing survivors, I think, will be pretty compelling for all of us. That said, I’d hope to be doing pylons by late ’23, early ’24. And then, this is — given its scale, this is a 4.5 year project to build. So this is a 20 — late ’28 into ’29 project is really the way to think about it, I think.

John DeCree — CBRE Securities — Analyst

Got it. Thanks, Bill. Thanks, Jonathan.

William J. Hornbuckle — Chief Executive Officer and President

Thanks, john.

Operator

The next question is from Chad Beynon with Macquarie. Please go ahead.

Chad Beynon — Macquarie — Analyst

Hi. Good afternoon. Thanks for taking my question. I wanted to dissect the casino segment. You noted in the slide deck that slot revenue on a two year — or I guess, on a three year stack basis was up 20% to 30% in the regionals in Vegas, where tables was flat to up 10%. I understand that Vegas is probably, because of the higher end baccarat, hasn’t returned, that you just touched on, Bill. But what’s the disconnect in the regional markets? And is this something that could be a structural change to the business, just higher percentage of slots versus table revenue going forward? Thanks.

Corey Sanders — Chief Operating Officer

Hi, Chad, it’s Corey. In the regionals, and particular, — and Jonathan touched on this a little bit with the room limitations, especially at properties like Borgata and Beau that had an impact on tables. We are starting to see some of that play come back. In Las Vegas, the typical game play is pretty solid, and you’re doing that without any Asian player. So just to even be up there, I think, is a testament to the strength of that market.

And Chad, I think to your core question, fundamentally, is there a change? I mean time to check, there might be, we don’t see one. I mean, I think we’re seeing some of the same activity case, whether it’s the extreme amount of cash business we see in Maryland. We just had a very successful tournament this weekend in Borgata, which proved once again, the marketplace is there for us on tables for Blackjack. And so fundamentally, we don’t see it. We understand the numbers you’re dissecting, but you look at a place like here were all in Detroit, by the way, for the day. If you look at Detroit, where they still have some restrictions here that are hampering this business and when they begin to ultimately and finally come off, we hope to see some of this as well.

Chad Beynon — Macquarie — Analyst

Okay, great. And then regarding the Cosmopolitan and Las Vegas acquisition, how quickly after the close, can the asset be implemented into your — I guess, your portfolio in Vegas and just your loyalty system? Thank you.

William J. Hornbuckle — Chief Executive Officer and President

It will take depending on the system and the environment. Some stuff is pretty quickly and some of it will take ultimately out through a year. When you think because we want to do it properly, we want to integrate the property, we want to make sure for both employees and guests, particularly their rewards guests that there are no takeaways. And so it just depends on what segment and what piece of that environment you’re talking about. But again, it’s anywhere from 90 days to a year depending on how we’re — what the particular subject matter is. We’re in [Indecipherable] I think we’ve said earlier, to make a mistake. That place has done exceptionally well. I think it’s like if you look back trailing 12, like $450 million of cash flow or something around that number. And so we’re going to go cautious and relatively slow.

Chad Beynon — Macquarie — Analyst

Perfect. Thank you very much. Appreciate it.

Operator

The next question comes from Barry Jonas from Truist Securities. Please go ahead.

Barry Jonas — Truist Securities — Analyst

Great. Thanks. I appreciate you’re not seeing any impact to the consumer yet from inflation, but can you just talk about how long the booking window is in Vegas today? And then to what extent you have forward visibility across your markets, given all the macro uncertainty out there?

William J. Hornbuckle — Chief Executive Officer and President

Yeah. Barry, the booking window is similar to what it’s been in the past, it’s past 90 to 120 days, we have plenty of visibility there, and we’re pretty comfortable with that. We’re not seeing any slowdown in those areas.

Barry Jonas — Truist Securities — Analyst

Great. That’s great to hear. And then just as a follow-up question, you noted in the deck, and I think in the remarks, how BetMGM will integrate seamlessly into MGM Rewards. But how are you thinking about cashless gaming, maybe the ability to allow players to use their BetMGM wallet to fund purchases and play at your physical casinos? Thanks.

William J. Hornbuckle — Chief Executive Officer and President

I don’t want to take Adam’s thunder, but he’ll go over that product offering come May 12. But a single wallet is literally in the making, and he’ll talk more about that on Investor Day.

Barry Jonas — Truist Securities — Analyst

We’ll talk about integrating that with your physical casinos?

William J. Hornbuckle — Chief Executive Officer and President

Yeah. Obviously, given the environment, given the state, there’s a lot of regulatory that goes along with that, but structurally and from a technology perspective, our ability to do that is coming soon.

Barry Jonas — Truist Securities — Analyst

Great. Looking forward to it. Thank you so much.

Jonathan Halkyard — Chief Financial Officer

Thanks Barry.

Operator

And the next question is from Ben Chaiken from Credit Suisse. Please go ahead.

Ben Chaiken — Credit Suisse — Analyst

Hey, how is it going? In Vegas you get some very helpful intra-quarter margin commentary. Could you give us some color on where we stand on a same-store sales basis on some of the non-gaming non-hotel spend? So, I guess, F&B, entertainment, etc., just ballpark versus ’19?

Corey Sanders — Chief Operating Officer

Sure. Ben, it’s Corey again. The food and beverage numbers are at ’19 levels now, even with less covers, a little bit less covers, so as occupancy picks up, we come pretty close to there. The entertainment spends are pretty close to where it is in ’19 also. There’s a lot more supply out there. So, we’re seeing our average ticket prices up in many of our venues with occupancy remaining fairly consistent. So all-in-all we’re pretty comfortable with what we’re seeing in the spend in the other areas. And then eventually, the catering and banquet business comes back and March was a great month for that. We have some properties that had actually record catering banquet business. Once again, that is a higher margin business than just normal restaurant business. So we’re pretty optimistic about that also.

Ben Chaiken — Credit Suisse — Analyst

That’s really helpful. Thank you. And then on Downstate New York, if you do receive one of the licenses, you mentioned slots, tables, some new amenities. Would it ever make sense to start on those new amenities now and then, I guess, dial up or back the project based on the outcome? I guess the thought process being to get a head start. At one point, there was discussion of netting out any spend at the property against the license fee. I’m not sure where we stand there, if that was just noise?

William J. Hornbuckle — Chief Executive Officer and President

Yeah. I don’t know that given the competitive nature of this, the netting out piece will sustain. I suspect it won’t. Look, we don’t want to be presumptuous. Obviously, we like where we stand. I think we’ve served that community well and in turn, they’re prepared to support us. We’re going to go like hell to make sure that the day this happens that slot machines are ready to go into the building. And we’re going to flip out roughly 1,000 machines give or take, to bring in tables as soon as we possibly can within months.

And we’re going to make an assessment on a parking facility and when to go on that with a master plan. We had to ultimately get our head around the master plan, which we’re working on diligently now. I wouldn’t mind under any circumstance parking needs to be a real piece of this. But it’s a couple of billion dollars, and we’re going to be thoughtful about how quickly we do go when it’s all said and done.

Ben Chaiken — Credit Suisse — Analyst

Make sense. Thank you.

Operator

Ladies and gentlemen, this concludes our question-and-answer session. I would like to turn the conference back over to Bill Hornbuckle for any closing remarks.

William J. Hornbuckle — Chief Executive Officer and President

Thank you. So thank you all for joining us today. Again, I just want to emphasize the resiliency of our team and the company, in fact, even the industry. I mean, given how quickly we all came out of COVID and what we were able to do in particular examples like the one I mentioned in Bellagio in March, kind of unprecedented. So I couldn’t be more excited by it and thankful for everyone’s effort on that.

Our future has never been brighter. We’re sitting on an extensive amount of liquidity. You saw us put it to work immediately with LeoVegas in the space that we’re highly interested and highly motivated by. And our balance sheet is fortress. I mean, we have never been in this position. And so we’re going to continue to look at proper ways to allocate capital, whether it’s stock repurchase or more notably, I think, at this venture, ways to grow our cash flow. And we’ve continued to enjoy the growth of Las Vegas in the context and events capital of the world.

Now in sports, with all the things I mentioned earlier, Formula 1 of note coming forward, every weekend that we had a game or an event down in the South end, was a teens digit growth norm for those properties. And so that’s all inherently built into our future now. And so we’re very excited by that as well and what’s happening in Las Vegas. We’re excited by New York, of course. And then ultimately, I think Jon put a point on it, long-term, Japan is a very exciting thing for the company, will help massively diversify our revenues more globally. And so with that, operator, I thank you, and I thank you all for joining us today.

Operator

[Operator Closing Remarks]