MGM Resorts Int'ls (MGM - Get Report) new National Harbor casino resort is expected to exceed the $170 million in EBITDA analysts are forecasting that the property will add to the company's bottom line in 2017, CEO Jim Murren told TheStreet Friday.
"We are highly confident we can exceed EBITDA estimates and we expect margin growth will be commensurate with revenue growth," Murren said.
The $1.4 billion, 23-acre casino resort located in Oxon Hill, MD, which held its grand opening yesterday, features 300 hotel rooms, a 4,000 seat concert hall and up to 50,000 square feet of event spaces. Those amenities make MGM National Harbor a destination resort that will attract a wider array of patrons than its smaller casino competitors throughout the state, Murren noted.
"There is no other location in Maryland, or the mid-Atlantic region, that has the type of venue we built," Murren added. "We are minutes from the nation's capital and there are three airports in the area. We expect to get a lot of visitors from not just the Washington, DC area, but across the country as well."
MGM is entering a state where Maryland Live!, about a 30 minute drive from National Harbor, and the Horseshoe in Baltimore, about 45 minutes away, dominate gaming market share (56.7% and 27.1%, respectively).
Murren reiterated that National Harbor is a much broader concept than those entities.
"Our business model is not based solely on Maryland. It is based on international tourism and the entire mid-Atlantic region. But part of our goal is to drive revenue to Maryland," Murren said.
The purchase comes at a time when Atlantic City's struggles have reached a tipping point, resulting in the state of New Jersey rejecting the city's five-year turnaround plan and taking over conservatorship of its finances. But Murren sees brighter days ahead for Atlantic City.
"One of my more important jobs is to project out over the next five to 10 years. I believe Atlantic City has bottomed and we are making the necessary investments now to benefit from its rebound," Murren said.
The Borgata accounted for about 32% of gaming revenue in Atlantic City in October. Its closest competitor brought in less than half of that amount.
Turning to Macau, Murren reiterated MGM's commitment to the gaming region, and noted that its low exposure in Macau (20% of revenue) compared to competitors (40% of Las Vegas Sands (LVS - Get Report) revenue, 60% of Wynn Resorts (WYNN - Get Report) ) was criticized when spending was ramped up in the region. But MGM's diversity has proven to be the right move.
"A few years ago we were criticized for not having enough exposure in Macau. There is no doubt we are a diverse company and Macau is still important to us, but Macau has been very clear about the fact that they will be very deliberate about their path to growth, and we are listening," Murren said.
About Japan, Murren has expressed optimism that the preliminary vote this week there to legalize casino gambling was a positive legislative development. He also agreed with a Bernstein note earlier this week, estimating that the first casinos would not be built until 2023.
Despite that, Murren said that MGM is "keenly, keenly interested" in extending its operations to the country of 127 million.
MGM shares were up 1.88% to $29.19 on heavy trading volume early Friday afternoon.