MGM Resorts International

Good afternoon, and welcome to the MGM Resorts International First Quarter 2026 Earnings Conference Call. Joining the call from the company today are Bill Hornbuckle, Chief Executive Officer and President, Aisha Molina, Chief Operating Officer, Jonathan Healthyard, Chief Financial Officer, Gary Fritz, Chief Commercial Officer and President of MGM Digital, Kenneth Feng, Chief Executive Officer of MGM China Holdings, and Howard Wong. 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 Wong.

Thank you, Rocco. Welcome to the MGM Resorts International's first quarter 2026 earnings call. This call is being broadcast live on the Internet at investors.mgmresorts.com, and we have also furnished our press release on Form 8K 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 of the GAAP financial measures in our press release and investor presentation, which are available on our website. Finally, this presentation is being recorded. I'll now turn it over to Bill Horbrook.

Thank you, Howard, and thanks again to all of our employees. Their continued dedication and execution drove another Gold Plus MPS record-breaking quarter, reinforcing the strength and sustainability of our business and our ability to deliver unique and lasting experiences that people find incredibly exciting. MGM Resorts once again delivered consolidated net revenue growth in the first quarter, 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 first quarter, and we expect this to carry into the second quarter. The first quarter is typically our seasonally strong group and convention quarter of the year, and we experienced robust business related to both citywide conventions like CES and CONAG, as well as in-house programs at Mandalay and MGM Grand. We achieved record 1Q convention ADRs and catering banquet revenue and drove increased production from our strategic relationship with Marriott. Importantly, we expect this momentum to continue into the second quarter with convention room night mix up two percentage points year-over-year to 20%. As the city evolves, we're making sure we are leaders in innovation. The MGM Gaming Streaming Lounge, which opened at Park MGM and received all regulatory approvals during the quarter, is another exciting step. We developed a premium creator environment where gaming 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 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 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 24th 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 from leagues and respective team owners. If successful, no U.S. 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 masks to support future growth, and the suite conversion and renovated premium gaming areas at MGM Kotai 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, a venture Adam and Gary reported first quarter results a few weeks ago. We continue to prioritize the iGaming segment, where underlying fundamentals are healthy and growing, and we are approaching $2 billion in annual revenue from operators. We are moderating spend in sports to focus on returns while our online sports business also continues to grow, and we remain focused on driving profitable growth and margin. Our core strengths remain unchanged. iGaming, multi-product states, our omni-channel present in Nevada, and our focus on premium math sports players. We remain disciplined and focused on executing our strategy in areas where we have a competitive advantage. MGM Digital reported another quarter of double-digit revenue growth as it continues to make progress towards profitability. Sweden and the U.K. continue to drive our Leo Vegas 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 Tipco's U.S. sportsbook technology. We're continuing to invest in Brazil and plan to leverage our global marketing assets and in-house sportsbook capabilities on the significant World Cup opportunity a little later this year. And in Japan, over 40% of the foundation piles have been installed or completed. The first concrete floor has been poured, and the first structural steel has been erected. I recently visited the site and approved our mock-up rooms, which I found exceptional. and we are an opportunistic as ever, keeping in mind we expect to be the sole licensing 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 first quarter of 26 complete, our optimism across all various business segments continues to hold firm, especially in Las Vegas. We remain on track for growth this year. With that, I'll now hand it over to Jonathan to provide additional details on performance this quarter.

Thanks, Bill, and I'll certainly join you in thanking all of our employees for their continued hard work and dedication this quarter. We really value 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 EBITDA 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 second quarter, 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 first quarter, exhibiting top-line growth of 2%. And similar to the Las Vegas story, segment-adjusted EBITDA decreased by $20 million, in part due to an increase in self-insurance expense of $9 million and a decrease in business interruption proceeds of $10 million versus last year. Borgata and National Harbor also faced some weather-related disruptions. but we ended March on a very solid footing, and those trends continued into April. We closed on the sale of the Northfield Park operations earlier this month. So just a reminder for your models, Northfield Park will no longer be in our regional operations going forward. As usual, though, we'll provide same-store results for easy 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 to have a meaningful portion of the increase in our self-insurance expenses this quarter, and that's the growing prevalence of frivolous litigation, often backed by large pools of capital, including private equity. As we noted earlier, we were negatively impacted by $37 million in Las Vegas and $9 million across our regional operations this quarter. While we support a fair and balanced legal system, claims that lack merit may 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 first quarter. The decrease in segment-adjusted EBITDA 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 EBITDA, it results in higher cash flow for MGM Resorts. Moving to digital... Our BetMGM North America Ventures first quarter results reflected continued successful execution of refined player management strategy, delivering 6% growth in net revenue from operations and 11% growth in adjusted EBITDA. This was also the first quarter where we earned branding fees from BetMGM, which amounted to about $1.5 million. Separately, no quarterly distributions were made in the first quarter given the seasonality of cash outlays, which included marketing investments around NFL postseason and March Madness, as well as accrued annual compensation payouts. MGM Digital drove growth in net revenues of 43% in the first quarter and reported segment-adjusted EBITDA losses of $26 million. We are continuing to migrate our sportsbooks to our in-house platform, such as BetMGM Sweden, and are investing in the opportunities presented by the upcoming World Cup in both Europe and Brazil. Specific to Brazil, we continue to have confidence in the total addressable market, and we may drive investment beyond our original guidance, reflecting regulatory and tax developments, as well as competitive intensity as we pursue our long-term share objectives. And we'll keep you posted as the year progresses. In Japan... We are expecting our funding for the balance of the year to be approximately $200 to $225 million after investing approximately $140 million in the first quarter. Much of it will be addressed with proceeds from the yen-denominated credit facility we closed last October, so in essence, it's pre-funded for this year. During the quarter, we brought 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, and I can't help myself, we sold Northfield Park for 6.6 times trailing EBITDA. That's a multiple significantly higher than what is implied by our current share price. With the transaction now closed and the proceeds received, We have increased flexibility to redeploy capital, including reaccelerating share repurchases at our current valuation levels. I'll turn it back to Bill.

Thanks, Jonathan. Before we go to questions, maybe I'd like to reiterate just a couple 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. And as I think about the balance of the year, our group and convention business looks strong. Obviously, we have the benefit now of the MGM rooms for the entire year. We have easier leisure comparatives coming up. And the high end continues to demonstrate itself, not only in gaming, but in non-gaming spend. Event-driven, to be sure, and live entertainment, to be sure, but absolutely shows up and shows up often. And regionally, despite headwinds and the ones that were mentioned in the overall economy, we've seen a solid performance, and we expect to continue to see through to the balance of the summer. MGM Macau continues to hold on to a major market share. We're very proud of what's been created and what they're doing there, and we do believe costs and our margins are sustainable now throughout the year. And 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. And EmbedMGM continues to track itself along, and you've seen additional and tremendous growth in Gary's overall digital business for the rest of the world. So with that, Howard, I will turn it open to questions.

All right, thank you. We will now begin the question and answer session. To join the queue, please press star then 1, and to remove yourself from queue, please press star then 2. As a reminder, in all fairness, please limit yourself to one question and one follow-up. Today's first question comes from Dave 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 that a strategy that we could see you deploy in other properties or other areas of the portfolio? Thanks. Go ahead.

Sure, David. This is Aisha 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. So it's going to be – we're going to continue to watch, continue to refine over time, but we have been pleased with the reaction to date.

understood and if I can just as my follow up talk briefly about Macau having been over there the operations and the commentary seem relatively stable but it's always been a market that tends to have surprises around every corner now and again how are you looking out at the rest of the year in general terms or qualitative terms and how do you feel about how that market rolls through the rest of this year And that's it for me.

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

Thank you, Bill. This is Kenny from Macau. As we all know, Macau has always been compacted from day one. Macau market is a premium driven one. It's not simply about supply. It's not like purely like quantity display. It's about quality. So it's about understanding to serve the purpose of the target guests. Here at MDM 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 60 slits at MDM Kutai side. You never saw such products in greater China area. They are unique. They are different. They are refreshing. They are cozy. And we opened, like, nearly for a week. Our customers, they love it. And also, we just opened, like, 40,000 square feet of, like, premium gaming space, a quota area. We have about, like, 40 tables, 15 private rooms. It's also new, the design, the construction, all the services there. I can see, like, a lot of customers, they are very clean, even right now. Secondly, it's the products, and we will continue to refresh our products. Like, for example, we are in the designing stage about the 103 at the McCall, MDM McCall site. and also some kind of a gaming spaces, F&B outlets. We want to spend money wisely to really to reflect the purpose, to serve the purpose of the customers while they are in Macau. It's not a typical like a hospitality products or resort products. They are serving the targeted premium guests, premium eating customers. Secondly, I want to see that the MGM has developed a pretty unique corporate culture here that encourages from the senior management, from myself, to all other senior management members, to our team members, to react fast, effectively, to make changes, in making changes, in developing products and services which are evolving with fast-changing cosmetics. So, 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 a key for us to continue to grow for the rest of this year and the next year. Thanks. Thank you very much.

Thank you. And our next question tonight comes from Dan Policer with J.P. Morgan. Please go ahead.

Hey, good afternoon, everyone. 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 first quarter kind of progressed and how you kind of saw that resonate in your customer base and then, you know, the expectations for how the second quarter should evolve given your competitor last night had some comments on April?

Yeah, I'll start it, John, and kick it off. Look, we had, interestingly in the quarter, we had an amazing January last year, so we had a tough kickoff, mostly in gaming. But as the quarter progressed, and obviously I think you heard yesterday, you heard from us, CONAG was tremendous. And so as the quarter progressed, each month got successively better, March being obviously for us the best month yet. The market's changed. Consumer has changed. And, obviously, luckily for us, we have a lot of luxury product and brands that can cater to that. And it's going to 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 because booking cycles still remain short. But, 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 Spirit went bankrupt has been picked up. We see a couple additional international flights coming into the market. Now, it's a little early to tell what gas will mean to all of it, but to date we feel good about it. Our April is fine. We just had a very successful Baccarat tournament come through here last weekend. May will be a good month, and we like the second quarter, but it's early. It's just the end of April, and so time to tell on these short-term bookings and where leisure will ultimately go.

Got it. Thanks. And then just on that self-insurance, $37 million, you know, I think that you guys had $13 million charged last year, maybe in the third quarter for this. So 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. 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. And, you know, and the impact of that examination is this additional accrual that we took across our businesses in the first quarter. So, Of course, we expect that that's adequate now, but on the other hand, it has been an increasing cost in our business. It's the reason I wanted to call it out. You know, but for that charge, our results this quarter would have been, I think we'd all agree, you know, even much better on an operating basis. But 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. And our next question today comes from Steve Wazinski with Stifel. Please go ahead.

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

Yeah, thanks, Steve, for the question. Look, one comment you did make, I want to be clear about the leisure customer at the lower end of the spectrum. So for us, obviously, it's Luxor Excalibur. Midweek is still a challenge. Now, 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. And to answer the core question, we do see growth through the balance of the year. It's got to be tempered modestly, and it's got to be tempered with, you know, it's a crazy world out there right now. But based on what we see, particularly in advanced bookings, et cetera, we still remain optimistic that we will have growth by year end.

Okay, gotcha. Thanks for that, Bill. And then second question. We heard last night from Caesars, and obviously you probably listened to that call, that they've been starting to work a little bit more aggressively with the LBCVA to help kind of find and identify bigger events or corporations to bring into the Vegas market. I'm wondering if you could maybe expand on that a little bit more and maybe help us understand if you're involved with that process and then what the potential upside could eventually be there.

Well, A, it's 40,000 feet. Yes, we're involved. Gary Fritz, who's sitting next to me, is on the board. So we have been and will continue to be active. I think you know this about our business. Remember, we have over 4 million square feet 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 other CISCOs coming in with a massive group this summer. So, you know, the question becomes, because ConAg rotates, are there other groups in the world like ConAg? And the answer is yes, there are. And, yes, we have been cooperative and 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. And so they're not as easy just to pick up by, you know, some value proposition. There's generally more to it than that. But no, we are active. No, we completely agree with the sentiment that was laid out yesterday, and we'll continue to pursue it. Okay, great. Thanks, Bill. Appreciate it.

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

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

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. And I think over recent years, that number has been in the 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% to 40%. Obviously, we hope to improve that. We've had a couple of 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. And, you know, it's interesting. The majority of first-time visitors, actually many of them come to 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 want to come back. So they come back with family, friends, et cetera. And so, you know, I think the only real differentiator for now is that internationally it's hurting that number. To see it grow again through this package has been great because it's important, obviously, for the future growth of Las Vegas as we continue down the road here. I don't know, Aisha, if you want to add anything, but.

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

Great. Thanks for that. A second question would be a follow-up on Macau. Looking at the first quarter, 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 in this call in the past. Under the new structure and sort of considering the comment you made about March's exit rate for market share being a little bit better than in the first quarter, how should we kind of think about, you know, target margins for that segment under this new structure?

It's Jonathan, and I certainly invite Kenny to comment as well. But, 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. And then... uh, reducing their EBITDA by the amount of the new fee would get you to the kind of the new going forward margin. But I think we feel that safely in the mid twenties.

Perfect. Thanks everyone.

Thank you. And our next question today comes from Don decree at CBRE. Please go ahead.

Hi everyone. I wanted to ask, uh, Question two about the digital business. You know, revenue growth in the quarter was really strong, a little bit more than we thought. And is that a comparison to the heavy marketing in Brazil last year? Was there something else in terms of revenue uplift? And then just for my follow-up in there, how do we think about the kind of timeline to profitability in that MGM digital business from here?

Hi, Gary. Thanks for the question. The real growth engine on the top line of digital business has actually been the Leo Vegas business, the consumer business. So most of that concentrated in Europe with particular emphasis markets in the U.K. and Sweden. We've also had a lot of success launching the business in the Netherlands and expanding it there. Brazil helps, obviously, because It comps against very little revenue. But the core Leo Vegas business-to-consumer business, as I believe noted in the prepared remarks, is growing north of 30% year over year. So it's not all down to Brazil. In terms of the path to profitability, I believe we've indicated in the past that we would see the loss this year for the digital segment 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. But we're definitely anticipating the loss to materially narrow vis-a-vis last year, which then sets us up into 27 for close to a break-even year, if not 100% getting there.

Right. Thanks, Gary. I appreciate it.

Thank you. Our next question today comes from Sean Kelly 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. But just wondering, you know, 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. But in terms of what you're seeing right now and just trying to put into context what the RevPAR performance for the company sort of relative to some of the market numbers we saw out there, which I think would have bridged it a bit higher.

Yeah, Sean, thanks for the question. I should probably be best suited to start this off. You go ahead.

Yeah, sure, Sean. You know, with regard to the RevPAR question, I think that we look at it in a couple of different ways. Overall, we think the fundamentals of the business are, are healthy from a REFAR perspective, 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, and all of that's been positive, and all indications for it 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 the second quarter, toward the second quarter of last year, and that's been pretty consistent. We have been deploying strategies against it, as you know, with the all-inclusive as well as with overall cost control there, and I think that's been productive. We're continuing to watch closely as the summer unfolds in terms of what happens with that customer. But as Bill noted, we feel pretty good about The weekends, in terms of the midweek, we're hoping to continue to see more stability as the year progresses. And certainly I think there are pockets where we have evidence of that, whether this convention group business continuing to stabilize, including those properties midweek. And then 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. Exactly.

And remembering MGM, we've got about 54,000 more room nights in the bucket this year because, obviously, they were offline. So just pure math, that's going to – yeah.

Yeah, fair point on that. Thanks for that. And then as a follow-up, but 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, but, 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.

Yes, I appreciate the question. Fun question. I will start by saying I'm already under three NDAs. So the good news is the NBA has clearly earmarked Las Vegas and Seattle. We have had huge interest, and obviously whether Timo becomes in Las Vegas becomes the ultimate site or not, time to tell. Obviously, that will be up to the Board of Governors sometime next year. That said, we're excited by it. How could we not be? We've all seen the success and what it means to Las Vegas where 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. And so we're intimately involved in many of those conversations. And I hope, I believe that the answer is, well, yes or no. I think we'll know hopefully by this time next year. A process is beginning to start. We've been asked how we would position T-Mobile for any and all bidders, and we're beginning to do that with our partner at AEG and Bill Foley. But, you know, we're open to all comers, and there has been extensive interest in Las Vegas. And so it's exciting. It's very exciting, actually. Good to hear. Thanks.

Thank you. And 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. And 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 ask you. It hasn't impacted the ultimate timing, i.e., construction. We're now a 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 provided or not, reminding the balance of the crew who may not be as familiar with that project. They're allowing us to hold a quarter of a million square feet of space for a potential casino, on one of the podium floors there, and so it could be very exciting. For us, that is our key focus, not Abu Dhabi, to answer that part of the question. 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. So it'll take some recovery time, no matter what happens here over the next couple of months. But long-term... We remain very excited. The project is fascinating, fabulous. And so, you know, we're going to be all over it to continue to push both the agenda, the initiative, and the opening.

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

On the second question, no, not yet. 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. But there's obviously a long way to go. We still have four years to go there. And This is the first part of the question.

First part of the question. Oh, is this about additional licenses now?

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

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 that I think would make sense and be successful. Whether there's the political will at the end of the day to do that or not, time to tell. We've all witnessed first time around that there was not. And then knowing Japan as well as we do, I'll remind everybody we're in our 17th year of this. So I don't think it would impact us too quickly no matter what happens. And frankly, if they were able to get better terms and or conditions, that would only work to our betterment. And with 120 million people to share, I'm not overly concerned. To the contrary.

Perfect. Thank you.

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

Hey, thank you. Can you hear me? Absolutely, Stephen. So, Jonathan, you mentioned the multiple for Northfield versus the current trading was higher than where the baseline is. I guess, does that make you reconsider monetizing other assets or 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 products. 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 nice double-digit multiple, the sale of our Gold Strike property in Tunica at the same double-digit multiple, and now Northfield Park, I mean, you know, a slot-only facility with no hotels. And while performing nicely, I mean, you know, a pretty good multiple and well in excess of what our enterprise trade's 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. They're all done really for strategic reasons. I just think they do, these valuations just highlight what we think is a real disconnect with the enterprise valuation. So, in short, no, it doesn't really cause us to say, hey, what other properties might we be able to sell because that's usually informed by a strategic approach.

Fair enough. And then an unrelated question just on Macau. It looked like the mass market hold was better than kind of a 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, like Kenny's comment. You know, there's a lot of prop bets now. I mean, I think a Baccarat, some Baccarat tables have made six prop bets, huh? And so that has changed the game, the nature of the game, in fact, the odds of the game. Ken, I don't know if you want to comment a little further.

Yeah, thanks, Bill. We are seeing, like, increasing adoption of some side bets on gaming floors. As you know, like, side bets in general carry a house advantage. are higher than the traditional games. We are ruling out some more side bets, literally this week at MGM, following some recent approval by CICG. But the future of side betting in Macau is still relatively short. These games only got popular after the pandemic. Along with volatility in a premium dream market, we do not think it is the right time to adjust the theoretical math code. We will keep monitoring the adoption of the games, the player, and the DDR trend, et cetera.

Thanks. That's helpful. Thank you so much.

Thank you. And our next question today comes from Chad Baynon with Macquarie.

Please go ahead. Hi, good afternoon. Thanks for taking my question. Wondering if you can talk about the international business in the first quarter in Las Vegas, either around Chinese New Year or Super Bowl. As you know, those prompts have been fairly easy over the past couple of 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 26.

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 and 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 this April, or last weekend this April. And so we, and it was, as always, full of international players. So 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 it hasn't changed. And I don't think there's anything out there other than, you know, an outright war that would change that anytime soon.

Okay, thanks. And then on the Leo Vegas or the digital business, there's been some contraction in public multiples on affiliate companies and sports data companies and even so on the B2C given regulatory 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, but don't see any glaring holes in our portfolio at the moment. So it would take something extraordinary probably to see us deploy additional capital.

Thank you. And our final question today comes from Ben Chicken at Mizuho. Please go ahead.

Hey, thanks for taking my question. I've got one kind of two-parter. If I recall, maybe clarify, I think there was a small fine in the prior year, one Q. I don't know if that sticks out or if it kind of just gets caught in the wash. And then maybe you could help us think about two Q last year in the correct base. In Las Vegas, you reported around 710. $711 million, but I think you flagged $60 million of headwinds, $20 from grant, $20 from some event spend, and $20 from hold, I believe. I guess if you think about the business today, do those three buckets still kind of make sense to you, or have things changed? Thanks.

You're correct. There was a small sign in the first quarter of 2025 that we incurred that affected our results there. And so, 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. Second quarter of last year, you're correct that we were underway with the renovation at the MGM Grand during the quarter. That affected us for months. pretty much all of the year. We did have, I think, kind of a negative impact on hold during the second quarter last year. That was roughly $20 million. And so I guess those are probably the two things that I would call out, that when I look at this quarter, we certainly have the benefit of the MGM grant in those rooms back. And then, you know, you never know how old it's going to go. But last year in the second quarter, we were impacted negatively by hold.

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

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

And did well. And did well with it.

Got it. Thank you. Okay. Thanks, Ben.

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

Thank you, Alfred, and thank you all for listening in. I hope there's nothing we've shown that we're resilient, that this market is resilient, that people, and this weekend's another good example. I think we have Morgan Waller here at Allegiant. People are so excited by what we do, and despite all the noise in the world, and we all know there's a lot, we're pleased when we are, and we're excited for the future. So 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 minds and have a wonderful day.