MGM Resorts Financial Model
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MGM Resorts International is a global gaming and entertainment company operating integrated casino, hotel, and entertainment resorts.
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About this model
This model provides a Sum-of-the-Parts (SOTP) and discounted cash flow valuation to determine whether MGM Resorts International's transition to an asset-light operating model, combined with the profitability inflection of its BetMGM joint venture and the recovery of Macau, is fully priced into the equity.
MGM Resorts International is a global gaming and entertainment company operating integrated casino, hotel, and entertainment resorts. The company has transitioned to an asset-light "OpCo" model, having sold the majority of its real estate to REITs (VICI Properties and Blackstone) and leasing it back under triple-net master leases.
Business segments include:
- Las Vegas Strip Resorts (~48% of net revenue): Includes iconic properties like MGM Grand, Bellagio, and Aria.
- MGM China (~26% of net revenue): Operations in Macau (MGM Macau and MGM Cotai), catering heavily to the premium mass market.
- Regional Operations (~22% of net revenue): Casinos in states like Michigan, Maryland, and Massachusetts.
- MGM Digital (~4% of net revenue): International digital gaming operations (e.g., LeoVegas, Push Gaming).
- *Note: BetMGM (US digital)* is a 50/50 joint venture with Entain and is accounted for using the equity method, not consolidated in top-line revenue.
The company holds a dominant competitive position as the largest operator on the Las Vegas Strip, controlling approximately 25% of the market's rooms. Recent major events include BetMGM turning EBITDA positive in 2025 (generating $220 million in EBITDA and distributing $135 million in cash to MGM), the ongoing development of the $8 billion MGM Osaka integrated resort in Japan, and an aggressive capital return programme that has reduced outstanding shares by approximately 48% since 2021.
The downloadable MGM Resorts financial model includes SEC-sourced historical financials, forecast assumptions, core operating schedules, and valuation outputs in an Excel workbook built for review and scenario analysis.
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Historicals & AssumptionsMGM Resorts financial modelCompany, Historicals & Assumptions used
Source: SEC EDGAR · values in USD
| Line item | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
| Revenue | $9.68B | $13.13B | $16.16B | $17.24B | $17.54B |
| Income before income taxes | $1.46B | $903.8M | $1.47B | $1.12B | $280.8M |
| Operating income | $2.28B | $1.44B | $1.89B | $1.49B | $1.00B |
| Net income | $1.25B | $1.47B | $1.14B | $746.6M | $205.9M |
Forecast assumptions
Defaults used in the downloadable model. Forecast horizon: FY2026–FY2030.
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How to build a detailed financial model for MGM Resorts
A complete walkthrough of every driver, margin, working-capital input, and capital-allocation assumption used in the downloadable model.
Revenue Deep Dive
Las Vegas Strip Resorts
- Segment name: Las Vegas Strip Resorts
- Revenue driver formula: (Available Rooms x Occupancy % x Average Daily Rate) + (Table Games Drop x Win %) + (Slot Handle x Hold %) + F&B/Entertainment Revenue
- Historical growth rate: -4% to +5% (2025 revenue was $8.4 billion, down 4% YoY due to room remodels)
- Key growth levers and headwinds: Convention calendar strength, Formula 1 and Super Bowl comparables, room remodel disruptions.
- Pricing dynamics: Highly dynamic room pricing based on event calendars; table minimums adjust based on peak traffic.
- Revenue recognition notes: Casino revenue is recognised net of payouts; hotel and F&B recognised at the time of service.
- Seasonality: Q1 and Q4 are typically strongest due to major conventions (CES) and events; Q3 is weakest due to extreme summer heat in Nevada.
MGM China
- Segment name: MGM China
- Revenue driver formula: Main Floor Table Games Drop x Win % + VIP Rolling Chip Volume x Win %
- Historical growth rate: 11% to 27% (2025 revenue was $4.5 billion, up 11% YoY)
- Key growth levers and headwinds: Premium mass market recovery, visa issuance policies in mainland China, competition from new Cotai properties.
- Pricing dynamics: Regulated gaming environment; shift from VIP junkets to higher-margin premium mass tables.
- Revenue recognition notes: Recognised net of commissions and discounts.
- Seasonality: Peaks around Chinese New Year (Q1) and Golden Week (Q4).
Regional Operations
- Segment name: Regional Operations
- Revenue driver formula: Slot Handle x Hold % + Table Games Drop x Win %
- Historical growth rate: Flat to 1% (2025 revenue was $3.8 billion)
- Key growth levers and headwinds: Local macroeconomic health, cannibalisation from adjacent state legalisation, promotional environment.
- Pricing dynamics: Highly competitive promotional allowances (free play) used to drive foot traffic.
- Revenue recognition notes: Gross gaming revenue less promotional allowances.
- Seasonality: Relatively stable, though winter weather can negatively impact Q1 foot traffic in the Northeast and Midwest.
MGM Digital
- Segment name: MGM Digital
- Revenue driver formula: Active Users x Average Revenue Per User (ARPU)
- Historical growth rate: 19% to 28% (2025 revenue was $654 million)
- Key growth levers and headwinds: International market expansion, integration of Push Gaming, regulatory changes in European markets.
- Pricing dynamics: Highly competitive customer acquisition costs and promotional matching.
- Revenue recognition notes: Recognised net of player winnings and promotional incentives.
- Seasonality: Correlates with major international sporting calendars (e.g., European football).
Cost Structure
Variable Costs / COGS
- Breakdown: Casino expenses (gaming taxes, licensing, royalties), Rooms expenses (housekeeping labour, travel agent commissions), F&B expenses (food costs, beverage costs, waitstaff labour).
- Gross margin range: MGM does not report a traditional gross margin, but rather departmental margins. Casino margin is typically 45-50%, Rooms margin is 65-70%, and F&B margin is 25-30%.
- Key input costs: Gaming taxes (highly variable by jurisdiction), union labour contracts in Las Vegas, food and beverage wholesale costs.
- Scale dynamics: High operating leverage. Once fixed property costs and minimum staffing are covered, incremental room and casino revenue flows through to profit at very high margins (often 60-70%).
Operating Expenses
- Rent / Lease Expense: The largest fixed cost due to the OpCo model. Triple-net lease cash rent is approximately $1.84 billion annually, subject to fixed escalators (typically 2%).
- SG&A: General and administrative expenses include corporate overhead, marketing, and IT. Corporate expense guidance for 2026 is $450-485 million (excluding stock-based compensation).
- Depreciation & Amortisation: Lower than historical averages due to the sale of real estate, but still significant due to capitalised lease right-of-use (ROU) asset amortisation.
- Stock-Based Compensation: Typically $100-150 million annually.
- Restructuring / one-time charges: Frequent non-cash impairment charges (e.g., $256 million goodwill impairment in 2025 related to the Empire City New York licence withdrawal).
Margin Profile
- Segment Adjusted EBITDAR Margin: Las Vegas Strip (33-36%), Regional Operations (30-32%), MGM China (27-29%).
- Consolidated Adjusted EBITDA Margin: 13-15% (this is lower than EBITDAR because it deducts the massive rent expense).
- Margin trend: Stabilising. Las Vegas margins contracted slightly in 2025 due to union contract wage increases and room remodels, while MGM China margins expanded due to a shift toward the highly profitable premium mass segment.
Balance Sheet Structure
- Total assets: Approximately $40-45 billion.
- Key asset categories: Operating lease right-of-use assets (the largest asset class, representing the capitalised value of the VICI/Blackstone leases), Cash and cash equivalents (~$1.7 billion), Investments in unconsolidated affiliates (BetMGM, CityCenter, MGM Osaka).
- Goodwill & intangibles: Significant (15-20% of assets) due to historical acquisitions (Mandalay Resort Group, Mirage Resorts) and gaming licences.
- Working capital profile:
- DSO: 10-15 days (casino credit and convention receivables).
- DIO: 5-10 days (F&B and retail inventory).
- DPO: 30-45 days.
- Net working capital: Structurally negative. Customers pay cash upfront for gaming and hotel stays, while MGM pays suppliers on 30-day terms. This negative working capital is a source of cash during growth periods.
- PP&E: Drastically reduced post-real estate sales. Now consists primarily of leasehold improvements, furniture, fixtures, and equipment (FF&E), and the physical assets of MGM China.
- Right-of-use assets: Massive. Operating lease ROU assets exceed $12 billion, reflecting the long-term master leases for the Las Vegas and Regional properties.
Capital Expenditure & Investment
- Capex as % of revenue: 4-5% of consolidated revenue.
- Maintenance vs. growth split: Domestic capex guidance for 2026 is $685-735 million, heavily skewed toward maintenance and room remodels (e.g., MGM Grand).
- Major capex programmes: The $8 billion MGM Osaka integrated resort in Japan. This is funded via an unconsolidated affiliate; MGM's equity contribution guidance for 2026 is $350-400 million.
- Capitalised software: Minimal relative to physical property capex, though growing within the MGM Digital segment.
- M&A pattern: Historically a transformational acquirer, but currently focused on bolt-on digital acquisitions (e.g., Push Gaming) and organic international development.
Debt & Capital Structure
- Total debt: Approximately $6.3 billion ($3.8 billion domestic long-term debt, $2.5 billion MGM China debt). This excludes operating lease liabilities.
- Debt/EBITDA ratio: Traditional net leverage is low (under 2.0x), but lease-adjusted leverage (capitalising rent at 8x) is closer to 4.5x-5.0x.
- Credit rating: BB+ / Ba1 (crossover/high-yield).
- Key debt instruments: Senior unsecured notes, MGM China revolving credit facility, and massive operating lease liabilities.
- Maturity profile: Well-laddered, with recent refinancing activity pushing major maturities into the 2030s.
- Interest rate profile: Predominantly fixed-rate senior notes.
- Share repurchase programme: Extremely active. Repurchased 37.5 million shares for $1.2 billion in 2025. Reduced total share count by ~48% since 2021. $1.6 billion remained on the authorisation at the end of 2025.
- Dividend policy: MGM Resorts does not pay a material regular dividend. However, subsidiary MGM China pays a dividend (50% payout policy), which resulted in $153 million distributed to MGM Resorts in 2025.
Cash Flow Characteristics
- Operating cash flow conversion: Very strong. OCF often exceeds net income due to massive non-cash depreciation, ROU asset amortisation, and impairment charges.
- Free cash flow margin: 8-12% of revenue.
- Major non-cash items: Amortisation of operating lease ROU assets, depreciation of leasehold improvements, stock-based compensation, and periodic goodwill impairments.
- Working capital cash flow impact: Generally a source of cash due to the negative working capital model.
- Capex intensity: Low domestically (OpCo model), but high internationally (MGM Osaka equity contributions).
- Cash tax rate: Often differs significantly from the GAAP rate due to accelerated depreciation and foreign tax credits. 2026 guidance anticipates a cash tax range from a $75 million refund to a $25 million payment.
Sheet Structure
- Assumptions: Hardcoded drivers for macroeconomic factors, segment growth, margins, capex, and capital returns.
- Summary: Dashboard showing SOTP valuation, implied share price, lease-adjusted leverage, and BetMGM equity value.
- Revenue & EBITDAR Build: Line-by-line build for Las Vegas Strip Resorts, Regional Operations, MGM China, and MGM Digital. Calculates Segment Adjusted EBITDAR.
- Consolidated Income Statement: Bridges Segment EBITDAR to Consolidated Adjusted EBITDA (deducting corporate expense and rent), down to Net Income.
- Unconsolidated Affiliates: Standalone schedules for BetMGM (revenue, EBITDA, 50% equity income, cash distributions) and MGM Osaka (equity contributions).
- Balance Sheet: Standard assets, liabilities, and equity, with specific breakouts for ROU Assets and Operating Lease Liabilities.
- Lease Schedule: Rolls forward the master lease obligations, calculating annual cash rent, rent escalators, lease liability reduction, and ROU amortisation.
- Debt Schedule: Tranches of domestic and MGM China debt, interest expense calculations, and revolving credit facility sweeps.
- Cash Flow Statement: Operating, investing, and financing cash flows, explicitly showing share repurchases and BetMGM distributions.
- SOTP Valuation: DCF of the OpCo free cash flows, plus the equity value of the BetMGM JV, plus the market value of the MGM China stake, less net debt and lease liabilities.
Key Financial Relationships
- `Las Vegas Rooms Revenue = Las Vegas Available Rooms x Occupancy % x Average Daily Rate`
- `Las Vegas Casino Revenue = (Table Games Drop x Table Win %) + (Slot Handle x Slot Hold %)`
- `MGM China Casino Revenue = Main Floor Table Drop x Main Floor Win %`
- `Segment Adjusted EBITDAR = Segment Net Revenue x Segment EBITDAR Margin`
- `Total Segment EBITDAR = Las Vegas EBITDAR + Regional EBITDAR + MGM China EBITDAR + MGM Digital EBITDAR`
- `Consolidated Adjusted EBITDA = Total Segment EBITDAR - Corporate Expense - Cash Rent Expense`
- `Cash Rent Expense = Prior Year Cash Rent x (1 + Rent Escalator %)`
- `BetMGM Equity Income = (BetMGM Net Revenue x BetMGM EBITDA Margin - BetMGM D&A) x 50%`
- `Lease Liability Ending Balance = Lease Liability Beginning Balance - (Cash Rent Expense - Imputed Interest on Lease)`
- `Shares Outstanding = Prior Period Shares - (Share Repurchase Spend / Average Share Price)`
- `MGM China Dividend to MGM Resorts = MGM China Net Income x 50% Payout Ratio x 55.9% Ownership Stake`
- `Lease-Adjusted Net Debt = Total Debt + (Cash Rent Expense x 8) - Cash & Equivalents`
Cross-Sheet Dependencies
- The Revenue & EBITDAR Build feeds the top half of the Consolidated Income Statement.
- The Lease Schedule is the critical chain. It calculates Cash Rent (which feeds the EBITDA bridge on the IS), Imputed Interest (feeds IS interest expense), and ROU Amortisation (feeds the CFS non-cash add-backs).
- The Unconsolidated Affiliates sheet calculates BetMGM equity income (feeds the IS) and BetMGM cash distributions (feeds the CFS investing/operating section).
- The Debt Schedule calculates interest expense, which feeds the IS, which impacts Net Income, which feeds Retained Earnings on the Balance Sheet.
- The Cash Flow Statement calculates the net change in cash, which feeds the Cash line on the Balance Sheet, ensuring the model balances.
Sign Convention
- Revenues and Assets: Positive.
- Expenses and Liabilities: Positive (subtracted in subtotal formulas on the Income Statement and Balance Sheet).
- Cash Flow Statement: Cash inflows are positive; cash outflows (capex, share repurchases, debt paydown) are negative.
- Margins and Ratios: Positive percentages.
Things Most Likely to Go Wrong
- "Failing to deduct rent expense from EBITDAR to reach EBITDA; the OpCo model means rent is a massive, mandatory cash outflow that must be accounted for in valuation."
- "Consolidating BetMGM's $2.8 billion revenue into MGM's top line; BetMGM is a 50/50 JV and must be modelled strictly as equity income and cash distributions."
- "Ignoring the minority interest in MGM China; MGM Resorts only owns ~56%, so 44% of MGM China's net income must be deducted to find Net Income Attributable to MGM Resorts."
- "Miscalculating the lease liability roll-forward; the cash rent payment is split between imputed interest expense and principal reduction of the lease liability."
- "Overestimating domestic capex; because VICI/Blackstone own the buildings, MGM's maintenance capex is lower than a traditional asset-heavy casino operator."
- "Forgetting the MGM Osaka equity contributions; the model must include $350-400 million in annual cash outflows for this development through 2030."
- "Mismodelling working capital; casino operators structurally operate with negative net working capital, meaning revenue growth generates a working capital cash inflow."
- "Applying a standard corporate tax rate to pre-tax income; MGM's cash taxes are heavily shielded by lease accounting and foreign tax credits (2026 guidance is near zero)."
Validation Checks
- "Consolidated Net Revenue should be approximately $17.5 billion in the first projected year; flag if it deviates by more than 5%."
- "Las Vegas Strip Adjusted EBITDAR margin must remain between 33% and 36%; flag if outside this band."
- "Cash rent expense must be at least $1.84 billion and grow by approximately 2% annually."
- "BetMGM cash distributions to MGM Resorts should be positive (>$100 million) in 2026 and beyond."
- "Balance sheet must balance: Total Assets = Total Liabilities + Equity in every period."
- "Share count must decrease annually if the $1.0 billion+ share repurchase assumption is active."
- "Lease-adjusted debt to EBITDAR should remain between 4.0x and 5.0x; flag if leverage spikes."
- "MGM China revenue should represent roughly 25-28% of total consolidated revenue."
Key Assumptions (Default Values)
| Assumption | Default Value | Unit | Rationale |
|---|---|---|---|
| Las Vegas Strip Revenue Growth | 1.0 | % | Normalised growth following 2025 room remodel disruptions. |
| Regional Operations Revenue Growth | 1.0 | % | Mature market with stable, low-single-digit growth expectations. |
| MGM China Revenue Growth | 8.0 | % | Continued premium mass market share gains in Macau. |
| MGM Digital Revenue Growth | 15.0 | % | Scaling of international digital operations and Push Gaming. |
| Las Vegas Strip EBITDAR Margin | 34.5 | % | Blended average reflecting recent union wage increases and normalisation. |
| Regional Operations EBITDAR Margin | 31.5 | % | Stable margin profile based on 2024/2025 actuals. |
| MGM China EBITDAR Margin | 28.0 | % | Margin expansion driven by shift from VIP to premium mass. |
| Corporate Expense | 465 | $M | Midpoint of management's 2026 guidance ($450-485M). |
| Cash Rent Expense (Base Year) | 1,840 | $M | Management guidance for 2026 master lease payments. |
| Rent Escalator | 2.0 | % | Standard fixed escalator on VICI/Blackstone master leases. |
| Domestic Capex | 710 | $M | Midpoint of 2026 guidance ($685-735M). |
| MGM Osaka Equity Contribution | 375 | $M | Midpoint of 2026 guidance ($350-400M). |
| BetMGM Net Revenue | 3,150 | $M | Management guidance for 2026 ($3.1-3.2B). |
| BetMGM EBITDA | 325 | $M | Midpoint of management guidance for 2026 ($300-350M). |
| Share Repurchases | 1,000 | $M | Run-rate assumption based on remaining $1.6B authorisation. |
| Cash Tax Rate | 0.0 | % | 2026 guidance ranges from $75M refund to $25M payment. |
| WACC | 9.5 | % | Standard discount rate for US gaming operators. |
| Terminal Growth Rate | 2.0 | % | Long-term inflation and GDP growth proxy. |
Data Sources & Benchmarks
- Filings: SEC EDGAR (Form 10-K, 10-Q, 8-K) and MGM Resorts Investor Relations page (Earnings Presentations, BetMGM Updates).
- Peers for Benchmarking: Caesars Entertainment (CZR) for Las Vegas/Regional OpCo comparisons; Wynn Resorts (WYNN) and Las Vegas Sands (LVS) for Macau premium mass comparisons; Penn Entertainment (PENN) for regional and digital comparisons.
- Industry Data Sources: Nevada Gaming Control Board (monthly gaming revenue reports), Macau Gaming Inspection and Coordination Bureau (DICJ monthly GGR reports).
- Consensus Estimates: Bloomberg or FactSet for forward EBITDAR and BetMGM profitability estimates.
- Proprietary Data: Eilers & Krejcik Gaming for US sports betting and iGaming market share data (BetMGM benchmarking).
Sources
- MGM Resorts International SEC 10-K Report (TradingView summary)
- MGM Resorts International shares full-year 2025 financial report (Focus Gaming News)
- Earnings call transcript: MGM Resorts beats Q2 2025 expectations (Investing.com)
- MGM Resorts: The Chips Are Falling Into Place (Seeking Alpha)
- MGM Q4 2025 presentation slides: China operations and BetMGM drive growth (Investing.com)
Do more with the MGM Resorts model
Frequently asked
What is MGM Resorts' core business model?+
MGM Resorts operates as a global gaming and entertainment company, managing integrated casino, hotel, and entertainment resorts. The company has transitioned to an asset-light "OpCo" model, selling most of its real estate to REITs and leasing it back under triple-net master leases.
What are the primary revenue drivers for MGM Resorts?+
MGM Resorts' revenue is primarily driven by its Las Vegas Strip Resorts, which account for nearly half of its net revenue. Significant contributions also come from its MGM China operations in Macau and its various Regional Operations across the US.
What is the assumed capital expenditure strategy for MGM Resorts in its financial model?+
The financial model assumes capital expenditure at approximately 5.5% of revenue, reflecting MGM Resorts' focus on maintenance and room remodels for its existing properties. Major growth projects like the MGM Osaka integrated resort are funded through unconsolidated affiliates, with MGM's equity contributions noted separately.
What is the main purpose of the MGM Resorts financial model?+
The financial model aims to provide a Sum-of-the-Parts and discounted cash flow valuation for MGM Resorts International. Its purpose is to assess whether the market has fully priced in the company's transition to an asset-light operating model, the profitability inflection of its BetMGM joint venture, and the recovery of Macau operations.
Is an Excel financial model available for MGM Resorts, and what is its forecast horizon?+
Yes, an Excel financial model for MGM Resorts is available for download. This model provides a forecast horizon spanning from fiscal year 2026 through fiscal year 2030.
How does MGM Resorts' asset-light strategy impact its balance sheet structure?+
MGM Resorts' asset-light strategy significantly impacts its balance sheet by reducing its directly owned Property, Plant, and Equipment. Instead, the largest asset class is now operating lease right-of-use assets, reflecting the capitalised value of its long-term leases with REITs.
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