Morgan Stanley shared his research with Casino Life Magazine. Morgan Stanley toured with local management through MGM’s recently acquired Racino. The central theses:
1. Confident that MGM achieved $ 17 million in savings: Morgan Stanley saw several uppers, including:
- Regulatory changes mean that lowering the tax rate will save $ 3 million
- Better focused marketing can increase real estate revenue
- MGM has proven that it can use human capital, including in the areas of analytics and procurement
- Improvement of the real estate layout and the casino mix by diversification of providers and products.
2. Cross-selling opportunities:
The Empire City customer database can visit MGM properties (Borgata and Springfield) and other MGM properties. Conversely, MGM Empire City Casino could resell to its existing customer database. Cross-property games are already running. Launch of the MGM Reward Program at 4Q19.
3. March was an impressive month:
Empire City had the highest monthly GGR since 2011. Note: Moran Stanley sees this as positive for his regional coverage in general.
4. 24 km away from Times Square:
MGM can easily expand the operation of the Empire City Casino with only 97 hectares of built-in space in the existing facility. Morgan Stanley believes that such an investment would require a full casino license, unlikely before 2023.