Baccarat is a favored game among high rollers in the gambling world, known for its low house edge, fast-paced action, and high minimum bet limits. VIP rooms in Las Vegas casinos often attract big spenders looking to enjoy this simple yet thrilling game, and their presence can have a significant impact on the quarterly financial results of major casino companies.
In the third quarter of a recent year, MGM Resorts International experienced a notable downturn in its financial performance, primarily attributed to the play of just six or seven high roller baccarat players. This resulted in an $80 million decrease in year-on-year table game revenue for the company. Jonathan Halkyard, the Treasurer and CFO of MGM Resorts International, acknowledged that such fluctuations are inherent in the casino business, emphasizing the volatile nature of high roller activity.
During an earnings call, Bill Hornbuckle, the CEO and President of MGM Resorts International, mentioned that if the baccarat results were excluded, the company’s gross profit would have actually increased by 12%. Only three out of MGM’s ten Las Vegas casinos experienced lower revenue in the third quarter compared to the previous year, with baccarat play and extreme temperatures reaching up to 120 degrees in July being cited as contributing factors to the decline in business.
Looking ahead, MGM Resorts International is gearing up for the upcoming F1 Las Vegas Grand Prix. While room sales for the event have not been as rapid as they were for the previous year’s inaugural race, the company remains optimistic about the strong demand for accommodations during the Grand Prix.
Overall, the influence of high roller baccarat players on the financial performance of major casino companies like MGM Resorts International is undeniable. Despite the inherent risks and volatility associated with catering to this elite segment of gamblers, the allure of baccarat and the potential for substantial revenue gains continue to drive casino operators to prioritize the VIP gaming experience.