MGM Resorts International (NYSE:MGM) reported third-quarter financial results on Wednesday. The transcript from the company’s third-quarter earnings call has been provided below.
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Summary
MGM Resorts International reported a strong performance in its Las Vegas operations with an 8% year-over-year increase in casino revenues, driven by record slot wins and high-end play.
The company addressed a withdrawn acquisition offer from People Inc. and amended the voting agreement to align with long-term strategic goals.
MGM China achieved record quarterly revenues and continued to gain market share, with strong October performance attributed to premium customer engagement.
BetMGM North America reported a 7% increase in net revenue and a 112% rise in adjusted EBITDA, focusing on iGaming growth.
MGM Osaka’s development remains on schedule for a 2030 opening, with 11% of the project completed.
Management highlighted the impact of rising airfares on Las Vegas visitation and expressed optimism for upcoming events in Q4, including NFL games and F1 races.
The company discussed capital allocation priorities, focusing on share repurchases and investments in Japan, while maintaining limited refinancing risk due to a strong balance sheet.
Full Transcript
OPERATOR
Good afternoon and welcome to the MGM Resorts International third quarter 2026 earnings conference call. Joining the call from the company today are Bill Hornbuckle, Chief Executive Officer and President; Aisha Molino, Chief Operating Officer; Jonathan Halkyard, Chief Financial Officer; Gary Fritz, Chief Commercial Officer and President of MGM Digital; Kenneth Meng, Chief Executive Officer of MGM China Holdings; and Howard Wang, Vice President, Investor Relations.
Participants are in listen-only mode. After the company’s remarks, there will be a question-and-answer session. In fairness to all participants, please limit yourself to one question and one follow-up. Please note this conference is being recorded. Now, I would like to turn the call over to Howard Wang.
Howard Wang (Vice President, Investor Relations)
Thanks, Rocco. Welcome to the MGM Resorts International third 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 8-K to the SEC. On this call we will make forward-looking statements under the safe harbor provisions of the federal securities laws. Actual results may differ materially from those contemplated in these statements. Additional information concerning factors that could cause actual results to differ from these forward-looking statements is contained in today’s press release and in our periodic filings with the SEC. Except as required by law, we undertake no obligation to update these statements as a result of new information or otherwise.
During the call we will also discuss non-GAAP financial measures when talking about our performance. You can find the reconciliation to GAAP financial measures in our press release and investor presentation, which are available on our website. Finally, this presentation is being recorded. I will now turn it over to Bill Hornbuckle.
Bill Hornbuckle (Chief Executive Officer and President)
Thank you, Howard. Given the active news cycle surrounding MGM Resorts, I want to start today’s call by clarifying the information around People Inc. As you’re aware, MGM received an offer in June from our largest shareholder, People Incorporated. People and the MGM Resorts Special Committee came to terms on price, but in the end People was unable to assemble a syndicate that met their objective and they withdrew their offer. Earlier today we announced an amendment to the existing voting agreement with People which restricts them from purchasing additional shares once their ownership reaches 29.9% and confirms that they will vote with the board in connection with a change of control transaction. We believe this amended agreement aligns our largest shareholder not only with our long-term strategic plan but also with our ongoing commitment to maximizing value for all of our shareholders.
The discussion between MGM and People ends there. Management continues to be focused on the business. It’s clear and consistent. And today you’ll hear that MGM Resorts has a focused operational approach, solid fundamentals and a compelling pipeline. We operate an unrivaled portfolio of offerings in Las Vegas, the sports and entertainment capital of the world, with globally recognized brands, an experienced leadership team and well-capitalized resorts.
Not to mention we have a solid balance sheet and remain the only integrated resort operator with a global brick-and-mortar and digital footprint and a meaningful development pipeline highlighted by MGM Osaka, which we believe is the greatest integrated resort opportunity anywhere on the globe. Our multi-year momentum is best captured when you take a step back and look at the trailing 12 months Las Vegas Strip EBITDAR, which is nearly 70% higher than we reported for the full year of 2019. We’ve come a long, long way. Ultimately, our success is driven by our frontline execution and the teams throughout our diverse business segments drove steady performance of consolidated revenues in the third quarter, a notable achievement considering the macro environment.
This was evidenced by our best third quarter Gold Plus and All Guest NPS scores. During the third quarter, our Las Vegas operations exhibited year-over-year growth in casino revenues of 8% driven by record 3Q slot win. High-end play continues to lead the way, driven by special programming like our second annual $5 million slot tournament. Our group and convention channel also continues to be a bright spot. We actualized over 500,000 room nights in the third quarter, exceeding our internal expectations for convention room night revenue and remain on pace for this channel to represent 20% of total room night mix for the full year.
The macro headwinds we faced during the third quarter affected our leisure and transient customers across the board and it was especially notable at the end of September when, amplified by short booking windows and a slower event calendar, jet fuel prices hit a record high in September. And while domestic airfares have risen an average of 12% since March 26, we saw airline pricing to Las Vegas up about 45% in 3Q versus last summer. Gas prices also remain high, impacting customer wallets and, consequently, our 3Q performance achieved flat occupancy but at lower room rates.
As we look ahead, October is starting off the fourth quarter on the right foot with solid group and convention activity and the busy citywide event calendar, highlighted by three NFL games and strong table games play. In the final two months of the year, not only are we hosting our very own Players Edge Men’s Championship, but the city will play host to the NFR Rodeo, the Las Vegas Bowl and another exciting weekend of F1. 2027 gets off to a fast start with the NCAA College Football Playoff National Championship and the NCAA Women’s Basketball Sweet 16 all during the first quarter.
Our regional operations continue their steady same-store performance driven by the best third quarter casino revenues and an all-time best quarterly slot win. The main tower renovations at Borgata are underway and we continue making targeted capital investments where we see opportunities for meaningful returns across our regional portfolio. At MGM China we achieved record quarterly revenues. Our market share in September was 19.2% and ended the quarter with a record 3Q market share of 17.1. These trends have continued into the fourth quarter with strong October performance thus far. While the market remains competitive, we are focused on our operations and the execution is paying off. For example, our newly renovated Cotai Supreme Club has resulted in longer playing times and higher playing levels with our high-end customers, and our Cotai High Limit slot area which opened in July is attracting more rated players and driving higher slot volumes.
At our BetMGM North America venture, Adam and Gary Deutsch reported strong third quarter results a few weeks ago. Third quarter net revenue from operations increased by 7% while adjusted EBITDA increased by 112, implying a greater than 100% flow-through from the top line. We continue to prioritize resources towards our iGaming business where we see the most compelling growth opportunities. Our broader focus on premium players, prudent promotional spending and markets where we have a strategic advantage are resulting in greater profitability and cash flows to MGM in the form of both branding licenses and distributions.
It is worth highlighting that during the quarter the 9th Circuit unanimously ruled that prediction market sports event contracts are not federally regulated swaps; they are sports bets. The judge’s opinion that it is disingenuous to deny that the contracts are sports bets under a reasonable person’s understanding and that everyone knows a sports bet when they see it. We couldn’t agree more and are hopeful that the Supreme Court review the case sooner rather than later.
MGM Digital made great strides during the quarter as the BetMGM brand continues to drive 8% top line growth in the B2C channels led by gains in Spain, the Netherlands and the UK. In Brazil the market has shut down and we continue to monitor the situation with our co-investor Grupo Global. MGM Osaka remains on time and on budget for a 2030 opening. Approximately 70% of the foundation piles are completed while concrete and steel fabrication work above ground continues to make progress. On a combined basis the entire project is roughly 11% complete. We’ve included a few new slides in the earnings presentation to help paint a clearer picture of MGM Osaka’s magnitude and scope compared to other global resorts as well as data points on the customer base we are attracting and where those customers will be originating.
We will continue providing additional details as progress continues. MGM remains committed to being the global leader in gaming entertainment and it starts here in Las Vegas. Over the city’s storied history, growth has never been linear, but as the city has evolved over time, growth has always materialized. We are witnessing this evolution of Las Vegas into the sports and entertainment capital of the world and, when considering the additional expansion pipelines in digital and international, there is no one better positioned to capitalize than our company.
I will pass it now over to Jonathan to provide additional details on our performance this quarter.
Jonathan Halkyard (Chief Financial Officer)
Thanks, Bill. In Las Vegas, the decline in third quarter segment adjusted EBITDAR was driven primarily by lower room revenues, which offset benefits from stronger casino revenues. We experienced an increase in mix from the leisure customer over the hot summer months, which resulted in pressured rates against similar occupancy that we had last year. Looking ahead to the fourth quarter, October is shaping up to be a solid month and November will once again benefit from a robust Formula One calendar.
In December, some normal group and convention rotation took place as anticipated and our sales teams are stepping up to secure incremental business to make that month the regional operations. Third quarter same-store revenues increased by 1% driven by all-time record quarterly slot win. Same-store slot drop and win both increased by 4% that were slightly offset by lower table games win. Recall the regional results in last year’s third quarter benefited from approximately $9 million of business interruption proceeds. Thus, when combined with the adjustments related to the sale of Northfield Park, it results in just a 3% decrease in same-store adjusted EBITDAR, and that decline can be attributed to hold at two properties.
Excluding those, we drove EBITDAR growth at the other regional operations. At MGM China, revenue growth grew 5% year over year while reported EBITDAR was down 20 million. But the brand fee to MGM Resorts International increased by 22 million compared to last year’s third quarter. Margins were consistent when taking this brand fee into account. We had strong visitation during Golden Week in October, up 10% year over year at our two properties, and the premium mass continues to drive growth, and the positive response to our refurbished products and premium spaces are proof that our team holds a deep understanding of the Macau market and our customers’ evolving tastes.
Our BetMGM North America venture reported a strong 3Q and maintained their full-year guidance that they conveyed last quarter. iGaming drives nearly 70% of our net revenue from operations and remains our primary growth engine. Coupled with our dominant Nevada presence, these resilient channels generate the vast majority of our total revenue, insulating our performance from broader prediction market trends and concerns. Our best-in-class iGaming segment grew 8% in the second quarter and continues to scale.
Player values continue to improve, driven by our emphasis on acquiring premium customers with high predicted returns. We’re also focusing on multi-product states in Nevada and the high flow-through in 3Q is evidence the strategy is working. During the quarter, BetMGM distributions and branding license fees to MGM Resorts International totaled $34 million. MGM Digital increased net revenue by 6% or approximately $10 million during the third quarter and was able to convert that into a $19 million improvement in EBITDAR, narrowing the loss to $4 million this quarter.
In August, we launched online sports betting in the UK on our proprietary platform, which now drives over 80% of our online sports revenue. And on the iGaming side, we’ve revamped our casino product and invested in enhanced data models as we continuously improve the user experience. In Japan, we’ve spent approximately 114 billion yen to date and remain on track to deploy approximately 150 to 160 billion yen, or about US$1 billion in each of 2027 and 2028, which will fully complete our funding commitments. The project remains on time and on budget for a 2030 opening, and none of this progress and success throughout our operations happens without our amazing team, and I want to join Bill in sincerely thanking every team member whose dedication and focus position us for this long-term success.
I also want to take some time to highlight our capital structure because it’s worth noting that there is minimal near-term refinancing risk related to our balance sheet. We have very manageable upcoming debt maturities with only one tranche of domestic debt, a $675 million issue of senior notes maturing within the next 12 months, and our revolving credit facility is undrawn and our balance sheet is well equipped to withstand the current rate environment.
And finally, given the current stock price, I can’t help myself and I’m compelled to revisit our valuation. And this is not a theoretical exercise considering that we have approximately $1.4 billion in remaining authorized capacity under our current share repurchase program. When you calculate the MGM China stake at market value and assign a consensus value to the BetMGM North America venture, which we still view as very conservative given the current trajectory, you end up with roughly $4.1 billion of value, which implies a multiple of less than 3 times trailing 12-month domestic Opco adjusted EBITDA.
This assigns zero value to both MGM Digital and MGM Osaka. But I think most would agree that a conservative valuation of MGM Osaka could easily exceed 4.1 billion, thus providing investors the Las Vegas and regional operations which reliably generate greater than $1.5 billion in EBITDA for free. I’ll turn it back to Bill.
Bill Hornbuckle (Chief Executive Officer and President)
Thank you, Jonathan. To reiterate before I turn this over for questions, we are sharply focused on our business in Las Vegas. We are encouraged by what we see in October, but even more encouraged by what we see on the horizon. The upcoming marquee sporting events and teams further cement the global consensus that Las Vegas remains irreplaceable. There is simply no other market in the world capable of matching its concentrated hospitality infrastructure and unparalleled ability to execute mega-events on a global stage.
Las Vegas, and of note, MGM Resorts International, are at the heart of that experienced economy. Our regional operations are also benefiting from targeted capital investments as they continue generating steady cash flow. MGM China continues to punch above its weight. Our latest quarterly revenue and market share records are just another sign. The deep understanding of our customers and having the dexterity when executing our strategy continuing to pay off. We see near- and medium-term growth opportunities at our BetMGM North America venture, which is delivering accelerated profitability, and MGM Digital will continue on its path to profitability regardless of the outcome in Brazil.
And long-term growth will come from MGM Osaka, which continues to steadily make progress. With much more to come. Our focus remains absolute: executing at the highest operational standard to close the gap between our current market valuation and the true premier value of our enterprise for our shareholders. With that, let’s open this up for questions.
OPERATOR
Thank you. Now begin the question and answer session. To ask a question, please press star then 1. To remove yourself from the queue, please press star then 2. As a reminder, in all fairness, please limit yourself to one question and one follow-up. And our first question today comes from Brandt Montour at Barclays. Please go ahead.
Brandt Montour (Analyst)
Hi everybody. Thanks for taking my question. So I want to start out with Las Vegas. Bill, you gave some comments on October that sounded reassuring and I was hoping you could maybe pull out leisure from those statements and just give us a sense if you feel like leisure demand found a bottom in the months of August, September, or if there’s just some favorable seasonality because of better mix moving into a higher convention month like October.
Bill Hornbuckle (Chief Executive Officer and President)
Yeah, I’ll give some overview and then maybe Ayesha can double back for me here. It’s been fascinating. Obviously, last summer was, I think, a story about the lower end of our market mix. This summer, because of pricing, most notably air pricing into this market, it extended beyond just that. We have seen throughout all of it a great penetration into our casino database, great gaming revenues across the board. Convention business in corporate America have held strong.
The event activity has held strong and the participation of folks wanting to have those experiences all the same. We ran the same arc quarter over quarter. So for us the push was the yield on pricing and getting folks to come, particularly from a leisure and an FIT perspective, who were willing to pay up, if you will, in terms of ADRs. And that was the principal gap between this year and last year in terms of quarters. And in terms of the miss in Vegas, it was mostly all about ADR. October has shown well. Part of it is seasonality. You all know March and October are the two best months we generally have.
Event activity has been strong. We’ve had three NFL games which we’ve done well with, as we always do. And so we feel positive about it. Looking into the rest of the quarter, it’s been a last-minute booking cycle and it continues to be. And so it’s a little hard to tell. I think over time we’re going to need relief on fuel, gas and airline pricing as well, which obviously is impacted by the same. But we see a better looking quarter than I think we came out of the summer with.
Ayesha Molino (President & COO, ARIA and Vdara; Chief Public Affairs Officer)
Yeah, I think Bill, you said it really well. I mean, as Bill noted, we are seeing the sequential improvement in October and we’re pleased by that. You know, I do think that as we start to see the event calendar also improve in the fourth quarter and beyond, we’ll continue to see some stabilization of that leisure demand and those rates, particularly on the weekends. So, you know, to answer your question, is it the bottom? I mean, obviously, time to tell, but the macroeconomic impact is—and sort of the sudden spikes in a lot of the consumer inflationary, especially around energy prices—does seem to have disproportionately impacted the latter half of the summer.
Brandt Montour (Analyst)
Great, thanks for that. And then just one more on Vegas from me. One of the themes from last year was a bifurcation with the high end holding up quite well. And so with this sort of step down in August and September, did you continue to see that bifurcation? Did you see the weakness at the low end sort of bleed into your sort of leisure or, sorry, your luxury stronghold? How did those fare this time around?
Ayesha Molino (President & COO, ARIA and Vdara; Chief Public Affairs Officer)
Yeah, we did see some ADR impacts across the portfolio toward the back half of the summer. But as Bill noted, we are seeing some stabilization in that, some improvement in that and sort of return to that bifurcation in October. So we’re continuing to monitor it very, very closely.
Brandt Montour (Analyst)
Great. Thanks all.
OPERATOR
Thank you. Our next question today comes from David Katz at Jefferies. Please go ahead.
David Katz (Analyst)
Thanks so much for taking my question. I’d love to just get a little more, a little more color on how you look at the opportunity set for capital deployment between the buybacks. And I think you’d probably find little argument, Jonathan, that the stock is too inexpensive versus potentially some of the internal investments or even redevelopment opportunities that there may be versus external growth, you know, hypothetically in something like digital, you know, that could produce some long term growth.
Just, just walk us across that range, if you would.
Jonathan Halkyard (Chief Financial Officer)
I’m happy to do that, David. And I’ll certainly invite comment from Bill and Ayesha as well. You know, we’ve been fortunate and able to buy back 250 million shares over the past three or four years without, I think, having to make a single trade-off with respect to other capital deployment opportunities before us. Now, looking forward, we are coming upon two years of investment in our Japan project at a billion dollars per year. So we do that enthusiastically just because of the returns we think are associated with that project. So I think going forward our opportunities to repurchase our shares will be impacted by that somewhat, although we still think there’s tremendous value and we do plan to allocate capital to repurchase stock. On the digital front with MGM Digital, we have made our moves there.
We’ve talked about the investments that we’ve made in Brazil. We will see how that plays out and whether that will require any additional investments. We will allocate capital over the next couple of years to improve our room product and take advantage of some growth opportunities here in Las Vegas. But as we look at really the opportunities before us, it’s going to be Japan, it’s going to be share repurchases, and we think that those are the two most important and remunerative ways to use our capital.
David Katz (Analyst)
Noted. And appreciate that. And as my follow-up, you know, when we get into next year, it’s perhaps the first time in a number of years we have a new competitor, you know, entering right in the middle of the Strip. Right. You know, just talk about how you prepare yourselves and, you know, any strategies you might be deploying to try and capitalize or prepare yourself for that.
Bill Hornbuckle (Chief Executive Officer and President)
Thanks, David. I’ll kick it off and turn it over to Ayesha. First and foremost, we welcome it. And if it’s next year, great. Doesn’t look like it from the outside, but we’ll see. But anytime you’ve had something with that kind of energy and that kind of commitment and that kind of investment, it’s regenerated Las Vegas — the news, the story, the narrative, et cetera. And so we remain excited by that and obviously we remain excited by what we think the A stadium can do and hopefully maybe someday the NBA.
All that said, look, they’re a great competitor. We see them in Atlantic City, so we know them fairly well from that marketplace and they compete well in many respects. You know, I don’t know if you want to add commentary to that, but in terms of, you know, the competitive set, that is what we’re doing.
Ayesha Molino (President & COO, ARIA and Vdara; Chief Public Affairs Officer)
Yeah, sure, absolutely. Both from, I would say, an operational perspective and from a capital perspective, we’re certainly focused on making sure that we’re ready to compete. As Bill noted, we do anticipate that as it opens, we’re going to see new customers enter the market. We’re excited about that and that opportunity because we certainly believe it brings us opportunity as well. And from a capital perspective, we continue to invest in our high-end assets.
So we have the Aria room remodel coming up. Here at Bellagio, we’re getting ready to open a high-limit slot annex. The spa is underway. So there’s a lot of exciting capital that we are deploying here to make sure that we remain ready to both retain and grow our customer.
David Katz (Analyst)
Appreciate it. Thank you very much.
Bill Hornbuckle (Chief Executive Officer and President)
And then, David, I think maybe one last thought there. You know, they have, given the nature of their business and their location, a pretty unique Florida-concentrated database that will be good to get to Las Vegas. And so I feel affirmative by that as well.
David Katz (Analyst)
Absolutely.
OPERATOR
Thank you. And our next question today comes from Robin Farley at UBS. Please go ahead.
Robin Farley (Analyst)
Oh, great. Thank you. I wonder if you could comment. You know, another operator out there talked about how the highest-end players globally just kind of didn’t show up in Q3 in multiple markets. Can you talk about what you may be observing with that in both Macau and in Vegas? And then I just have a little tiny housekeeping follow-up. Thanks.
Bill Hornbuckle (Chief Executive Officer and President)
I’ll kick this off. I don’t necessarily agree with that comment. Matter of fact, to the contrary. As it relates to Macau, of note, I know of some very high-end play, and here back in Las Vegas, we’ve taken on some of the biggest customers in our history, actually. And so I think that end of the marketplace is as productive as it’s ever been for the company.
Robin Farley (Analyst)
Okay, great. Thank you. And then just a little housekeeping follow-up. It looks like your guidance for cash taxes came down a lot. Is that just a sort of a bookkeeping thing, or was it tied to an expectation where you had been accruing something but results lead you to expect something different now? Thanks.
Jonathan Halkyard (Chief Financial Officer)
Yeah, that guidance came down a fair amount for this year. It’s really a result of just fine-tuning our capex and the tax treatment of that under the one beautiful bill, as well as just some work around refunds that we’ve been doing. So we’re pleased to see that estimate for 2026 come down materially.
Robin Farley (Analyst)
Okay, great. Thank you.
OPERATOR
Thanks. And our next question today comes from Sean Kelly at Bank of America. Please go ahead.
Sean Kelly (Analyst)
Hi, good afternoon everybody. Thanks for taking my question for Jonathan or Bill, whoever wants to take it. Just, you know, in Las Vegas, obviously, we’ve gotten a couple questions on just the flow-through of revenues to EBITDA in the quarter. It seems like there’s a lot here going on in mix and, you know, probably a couple of other things, but wondering if we could get a little bit more color on maybe the other revenue side of the equation — non-gaming, non-lodging.
Like did we shift some mix to casino block and then that may have moved some things around, or something else going on? And then, Jonathan, more high level — and this counts as both my questions — where are we at on the cost side right now in terms of your ability to maybe find some additional offsets and control that versus, look, run-rate line-level inflation, which is pressure for everybody in this world.
Bill Hornbuckle (Chief Executive Officer and President)
Let me kick it off and maybe turn it to Ayesha for a second. Go back to Robin’s question a minute ago. A lot of that high-end play — because we had a massive slot tournament with high-end play, we’ve had several high-end baccarat customers in with high-end play — and all of those are, while great cash business, they’re at a higher margin. And so they drove some of that higher-end margin discussion. And so I think that’s part of what you’re seeing.
And then, historically, we have shifted over the last several years, but it magnified itself this summer where we’ve gone from 20% casino marketing mix to a little over 30. And with that — and we’re excited by that — but with that comes marketing programs that are centered on casino customers. And again, they take before they give. And so, Ayesha, I don’t know if you want to…
Ayesha Molino (President & COO, ARIA and Vdara; Chief Public Affairs Officer)
Yeah. And from an operational perspective, yes, Sean, we remain laser-focused on finding ways to drive efficiency out of the business while maintaining the customer service proposition and ultimately supporting the long-term reputation of the brands. You know, that being said, I will note that our FTEs for the quarter were effectively flat year over year with 54,000 additional occupied room nights. And so the teams are very focused on how to manage variable labor given the ADR pressures that we’ve discussed.
And we will continue to stay focused on that.
Sean Kelly (Analyst)
Thank you very much.
OPERATOR
Thank you. And our next question today comes from Dan Politzer at JPMorgan. Please go ahead.
Dan Politzer (Analyst at JPMorgan)
Hey, good afternoon everyone. Thanks for the question, Bill, Ayesha — whoever wants to take this. Just another one on Las Vegas. Gaming trends have been resilient for you, but I think that for the Strip RevPAR for you guys has declined, I think, eight consecutive quarters. How should we reconcile the underlying health and maybe the path to recovery for Las Vegas just given that against the broader U.S. travel backdrop, which is very strong right now?
And then maybe asked another way, what is it that MGM and maybe the broader Strip operators can do to better attract more customers, or even a higher-quality customer?
Bill Hornbuckle (Chief Executive Officer and President)
Yeah, fair question and good question. I think if you look at at least summer over summer, air prices are up literally 45%. And so this market, between the loss of Spirit pricing, how certain carriers have looked at this market — are now pricing it at all — jet fuel, et cetera, it has changed the market dynamic. No doubt. We’ve had this whole narrative around value, which we still believe — Las Vegas is an amazing value. And so that’s still something we continue to talk about and continue to push our way through, if you will, because I have watched New York — by the way, New York, there’s not an inventory, there’s a lack of inventory.
So there are certain reasons certain markets are doing better than others. But undoubtedly, Las Vegas has been hurt more than most. The Canada issue, the international travel issue, has not helped. And so we just need to push our way through those things really one at a time. Jet fuel’s up 90%. I can’t imagine next year it’s going to double. I think we’ve hopefully seen, given all our catastrophe, the end of that push, if you will. And hopefully things begin to improve and things begin to normalize. I will go back to my opening comments. While Las Vegas has had a lot of ups and downs and it’s seen its share of whether it was COVID or the Great Recession, historically the CAGR always comes back and we continue to grow this market, and we have every belief that we’re going to continue to do that moving forward.
So time will tell. We all understand the circumstances around macro here as well as you do. And so, you know, it’s not completely within our remit, but that which we can control, we’re very focused on.
Dan Politzer (Analyst at JPMorgan)
Got it, thank you. And then just going back to valuation, I think Jonathan laid out, you know, the 2.6 times implied valuation and there’s no value on Osaka, I guess. How do you think about becoming more aggressive with that repurchase authorization? And just to confirm, have you been locked out of the market just given the circumstances around some of the people stuff?
Jonathan Halkyard (Chief Financial Officer)
Yes, we chose not to repurchase shares in the third quarter because of just the circumstances surrounding the company. But as Bill noted in his opening remarks, those circumstances are now concluded. I would also add, while it certainly comes down to a matter of financial policy, I think that the company’s financial leverage and the nature of our capital structure, such as it is, would allow for us, if we do see that opportunity, to take leverage up a little bit in order to capitalize on what we see as just this incredible dislocation of the value against the underlying cash flows of the business.
Dan Politzer (Analyst at JPMorgan)
That’s helpful, thank you.
OPERATOR
Thank you. And our next question today comes from John DeCree at CBRE. Please go ahead.
John DeCree (Analyst)
Hi, good afternoon everyone. Maybe, Jonathan, on the same topic — with the billion dollars or so of equity contribution for ’27 and ’28 to Osaka, how are you thinking of funding those commitments? Kind of contemplated cash on hand and cash flow? I know you used the yen-denominated facility for a smaller a while back, so just curious how you’re thinking about that over the next two years.
Jonathan Halkyard (Chief Financial Officer)
Well, we, well Sarah put together that yen facility with a few of our relationship banks. Would love to be able to do more of that. It’s a very effective cost of funds for us, so we’ll do that if we’re able to. But the reality is we’ll be funding these out of our cash on hand and our free cash flow over the next couple of years. It’s also the case that the project is fully funded, of course, between our commitments and Oryx’s commitments and a senior credit facility in Japan. But this is an over-equitized project and so, you know, coming out of the gate probably something like two times leverage when it opens. So whether it be before opening or shortly thereafter, I’m certain that it will be on our list to refinance that and potentially repatriate some funds back to ourselves and Oryx.
That’s down the line, but just to give you an idea of what we think is going to be the capacity of this operation to really ultimately finance itself.
John DeCree (Analyst)
Understood. We recognize that the new slides in the deck, which are fantastic on Osaka. Maybe one more as a follow-up internationally for MGM Digital. With Brazil shutting down unexpectedly last month, I don’t think it was a huge piece of the business at the moment, but it was certainly an area of long-term growth. And so, curious, maybe, Bill, if you have any thoughts on Brazil and kind of how that might play out, your best guess, or your appetite to be involved in that market going forward, should it reopen.
Bill Hornbuckle (Chief Executive Officer and President)
John, I’ll turn this to Gary because he’s literally on this every day. He was on the phone call today about it. So, Gary, why don’t you step up?
Gary
Thanks. Sure. Yeah, I think Brazil is a case study, perhaps not believing the prediction markets. So all jokes aside, I believe Bolsonaro was an 80% favorite, so certainly the election result caught us by surprise. I think it caught everybody by surprise. But that being said, when the provisional measure was put into place last month in September, we certainly began the contingency plan in Brazil. We were able to reduce some of our fixed cost in Brazil accordingly.
I do want to thank our team in São Paulo, the team that is continuing to remain with the business for their perseverance in what I think is a challenging set of circumstances. So we have contingency planned for a variety of scenarios, you know, ranging around different ways the market may or may not reopen. So, you know, I think we are, as much as anybody else, watching what the Brazilian Congress is going to do, what the Brazilian courts are going to do. And we feel blessed to have, you know, our partner down there who can help navigate through some of the noise, perhaps better than anybody else in the country can. So we feel privileged to have them as partners, and we’ll just see how the regulation shakes out.
We’re planning for a variety of different scenarios. I think that’s the best we can do right now.
John DeCree (Analyst)
Understood, Gary, really appreciate your color on that. Thanks, all.
OPERATOR
Thank you. And our next question today comes from Barry at Truist. Please go ahead.
Barry Jonas (Analyst at Truist Securities)
Hey, guys, thank you for taking my questions. We’ve covered the Strip a bit, but I just want to make sure I understand. Can you talk about kind of the month-to-month cadence? It sounds like the end of September was really challenging, but how are trends before that? I guess what I’m getting at is I’m trying to better understand thinking for visibility for Q4, whether that’s growth or contraction, if there’s any visibility as we update our models here.
Thank you.
Jonathan Halkyard (Chief Financial Officer)
I mean, I’ll give you a sense of the cadence in terms of the, you know, the room rates through the quarter because, as we’ve talked about, that was really the source of the EBITDAR decline in Las Vegas year over year. In July, you know, coming off of July, the last time we spoke, we were pretty much flat year on year. If anything, maybe down very low single digits. August was down about mid-single digits and September was down high single digits for us just broadly in terms of ADR.
October right now is looking a lot more like July. And I think, as I noted, November F1 has been really shaping up very nicely across the spectrum. December, we’ve had, you know, we’ve had some convention business rotate out as we expect, and we need to work to fill that back up for December. So, you know, all of this is combined with a bit of a shorter booking window than we’ve seen over the last year or so. So with that note of caution, I would say the quarter is off to probably a little bit better start than it was when we last spoke.
Barry Jonas (Analyst at Truist Securities)
Great. And then just shifting gears, Virginia came close to legalizing iGaming and Maryland has discussed it in the past, as I believe D.C. has. So as we look to ’27, Bill, is this the year iGaming moves in the Mid-Atlantic? And I guess how do you see it impacting National Harbor if the answer is yes?
Bill Hornbuckle (Chief Executive Officer and President)
Look, we’ve always been encouraged and we have the Detroit, the Michigan obvious example to lean on, which is probably the best live example anywhere in the world for that. You know, is it taking from or giving to? We’re optimistic on both. It doesn’t mean it happens. We’ve all seen this cycle. But you’re right, Virginia came very close. We’ve had real dialogue with the government of Maryland and I think there’s opportunity in both. I can tell you this: we’ll be all over it.
You all understand the impact really of the five states we’re in, and iGaming is almost 60-odd percent of that business, closer to 70. And it’s really three states, and those two would be extremely accretive to that business. And so we’ve got lobbyists, we’ve got ourselves. I’ve been involved in this for a while with certain government officials as well and will continue to be. So no promises, but we are hopeful for both of those, actually.
Barry Jonas (Analyst at Truist Securities)
Thank you.
OPERATOR
Thank you. And our next question today comes from Chad Bennion at Macquarie. Please go ahead.
Chad Beynon (Analyst at Macquarie)
Afternoon. Thanks for taking my question. Wanted to ask about the regional gaming same-store margins. I know removing Northfield kind of brought down where that level is, but the flow-through was also a little bit more negative than I think we all expected. Is there anything to call out for this quarter, which is seasonally one of the stronger ones?
Jonathan Halkyard (Chief Financial Officer)
Jonathan noted in his remarks we had a bit of a hold impact at a couple of our properties, which was material for the quarter. Beyond that, nothing really to call out. There was a little bit of BI impact year over year. But really I think that the teams there have done a good job. We’ve got a net reduction in same-store FTEs and they continue to stay very, very focused on running those businesses efficiently.
Chad Beynon (Analyst at Macquarie)
Okay, great. Thank you. And then as we think about ’27, you highlighted some of the bigger events that are coming to the Strip, and I think we understand the historical seasonal patterns. International business was something that we’ve kind of cycled through, I think a year and a half or almost two years of that negative growth. Does that need—do we need to see lower airfare prices for that to come back? Are you starting to see that at least inflect in terms of not getting worse with that piece of business?
Bill Hornbuckle (Chief Executive Officer and President)
Yeah. Chad. We see—look, interestingly, Mexico has never gone down. To the contrary, Mexico continues to come up and is now the number one import market. Canada has rebounded. Now, having said that, it was down 30‑something percent through Las Vegas, and it’s rebounding—not to the extent we’d all like to see it—and it will take time, particularly out of Canada, for Canadian airline operators to get, if you will, refocused. That said, some of that has to tie to political rhetoric and we’ll see where this all goes.
Generally speaking, though, part of value of the dollar when it comes to Europe, etc. But see international travel on the mend is how I would paraphrase it.
Chad Beynon (Analyst at Macquarie)
Great. Thank you very much.
Bill Hornbuckle (Chief Executive Officer and President)
Appreciate it.
OPERATOR
Thank you. And our final question today comes from Steve Wyszynski at Stifel. Please go ahead.
Steve Wyszynski (Analyst)
Yeah. Hey guys, good afternoon. Want to ask a Macau question, if possible, Bill? Obviously your market share over there is—it’s really in a good spot, it’s really high. Yet at the same time we understand the promotional environment over there is elevated. So just wondering how much of the decline that we kind of witnessed here in the third quarter from a margin perspective in Macau is somewhat promotional-related versus other factors that are weighing on that that could be labor or other things like that.
Bill Hornbuckle (Chief Executive Officer and President)
Well, Steve, we kept Kenny up, so Kenny, I’m going to let you answer this one.
Kenny
Okay, thank you Bill, thank you for the question. Actually, like you can see, our margin—I think pretty consistent—this quarter at MGM China level, we are at about 26.9%, and compared to the previous quarter we are down a little bit. But as you know, there are a lot of factors impacting our margins, like luck factor and also the event calendars and high-end play, etc. But we are very focusing on the overall efficiency. We have been guiding the Street our margin range at MGM China level would be in mid‑20s to high‑20s.
We have been consistently delivering this for the past few years. All competitors and the Street, they are watching about the reinvestment levels. Like I always said, reinvestment level or the cost level is just a percentage. It doesn’t represent all of what MGM China is. We are competing here for the underlying products, the services, the innovations. Every employee from myself to the frontline colleagues—it’s an ecosystem—and this is kind of a positive structure that we are focusing on. So we are focusing—we utilize our advantage about our deep understanding of our customers, our quick actions—so to target our targeted, like, premium mass customers.
I think that’s what we are competing. This whole weapon is not purely like a figure.
Steve Wyszynski (Analyst)
Okay, thanks for that. And then, Bill, you know, look, I don’t think you’re going to answer this question but let’s—anyway, in your prepared remarks, you noted that all discussions between you and People Inc. are done. And I assume that means that goes both ways. Meaning, look, there obviously were some talks, there were some rumors out there about you guys kind of flipping the table and potentially going after those guys. So whatever you can say about that, if anything, would be—
Bill Hornbuckle (Chief Executive Officer and President)
I will answer it, yeah. Look, we are done, and I meant that. We’re going to refocus on our business. The dialogue back and forth between us and People—on you buy us, we’ll buy you—you know, it was all about trying to unlock the value of that 25% of our shares. We’re done, and that’s our position. That’s People’s position. Barry, of note, and Joey have been both great board members from IAC and now People. They’re participating heavily in our vision and our thinking for longer term, and we encourage them and we encourage that activity.
So we’re excited to get to, quote, the way it was, and continue to focus more on the business that we have in front of us here.
Steve Wyszynski (Analyst)
Okay, great. Thanks, Bill. Appreciate that answer.
OPERATOR
Thank you. Ladies and gentlemen, that concludes our question and answer session. I’d like to turn the conference back over to Bill Hornbuckle for any closing remarks.
Bill Hornbuckle (Chief Executive Officer and President)
Really none. I think, you know, obviously we understand this quarter. We remain very optimistic about Las Vegas and its long-term future. We always have, and Frank, we always will be. We love the stability our regionals bring. The activity pace the team has brought in Macao is just second to none, literally. And it’s proving that. And I’m most excited by Digital. You know, despite predictive, despite everything else, Digital had a great quarter. We’re showing real growth in the UK and some of our other markets.
On MGM Resorts International’s wholly owned digital, Brazil is unfortunate, but the good news is it wasn’t—you know, it was costing us money; now it’s costing us less. And we’ll see where this ultimately ends up over the next couple of months. That won’t drag on forever for us. We will make a decision on that come sooner or later on how to handle that market and what to do. But I thank everybody for their time and have a great evening.
OPERATOR
Thank you, sir. That concludes today’s conference call. We thank you all for attending today’s presentation. You may now disconnect your line and have a wonderful day.
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