The above chart shows that net revenues declined heavily over the last two quarters. Net revenues fell by 3.7% from the last quarter to $2,485 million. This is mainly due to decreased revenue. Revenue decreased by 4.4% in the Las Vegas Strip and 4.1% in MGM China.
In the Las Vegas Strip, revenues were negatively impacted by a decrease in table games’ hold percentage. Hold percentage is the portion of money gambled that’s retained by the casino. MGM China’s revenues were negatively affected by lower VIP gaming activity on account of macroeconomic factors in China.
However, net revenues for 3Q14 increased by 0.9% on a year-over-year (or YoY) basis. On a YoY basis, quarterly revenues were driven by mass market growth.
MGM pays dividend
MGM China paid a $137 million dividend in September 2014. $70 million was distributed to MGM Resorts. $67 million was distributed to non-controlling interests.
Key takeaways from the 3Q14 earnings call
James J. Murren, chairman and CEO of MGM, said that MGM’s mass gross gaming revenue (or GGR) grew 34% in the quarter. The market only grew by 16%. MGM China grew by 34%—compared to Cotai. Cotai was up by 19%. He said that the Peninsula is the region where the premium mass has been outperforming.
In the next part of this series, we’ll discuss why MGM’s gaming revenues decreased despite growth in mass participation.