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Has Myvegas been profitable for MGM?

Discussion in 'MyVegas' started by Jonnyvegas, Apr 26, 2014.

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  1. Jonnyvegas

    Jonnyvegas Low-Roller

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    Now that the game has been around close to 2 years I was wondering if any reports have been published whether or not the game has proved to be profitable for MGM resorts.

    I saw something that MGM claims to have given away $6,000,000 in rewards. I'm sure the game brings traffic in to some of their properties. I'd love to see a study on some of the details of the program.

    I'm sure a bunch of tech types are employed running / maintaining the games. How much people on average spend when going to a hotel for a free buffet. The built in advertising. These are all factors someone would have to figure in to the equation, plus many others.

    I know some love the game and others hate it. I've put LOTS of time into the game, but I will be using over $400 in freebies on my upcoming trip from playing a game.

    If it is profitable, how come CET hasn't started their own version?
     
  2. bryan1650t

    bryan1650t Tourist

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    Interesting question. I don't have a clue as to the financials, but I know a few people who live in Las Vegas. Nightclubs will often give locals, especially hot women, free nightclub passes to keep the vibe up in a club. I've heard comments that in the past, the mega-resorts would hire people to party, basically like a promoter flying under the radar screen. These days, my local friends say they get attractive club and food offers which makes the locals de facto promoters.
     
  3. dankyone

    dankyone VIP Whale

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    That is a great question. There are so many factors involved they can massage the numbers either direction!

    My guess is that it has driven traffic to the properties and has probably been a net positive for MGM.
     
  4. bryan1650t

    bryan1650t Tourist

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    Just chatted with an old friend who lives in Vegas. She mentioned that we likely should notice that the "comps" are attractive in the resorts that are large and not as popular as they used to be. I concur. If you think about it, you can get a heck of a deal at Excalibur, Luxor, and Circus Circus. Personally, I think the MC, NYNY, and MGM Grand rooms are good deals. Aria, Bellagio, Mandalay Bay, and Mirage don't need to entice people in to keep the place lively. A room at those older properties has low value; the value is keeping the population or vibe up. Excited people spend money. Loose the vibe, and you have a ghost town-- making no money.

    Basically, in her opinion, the mega resorts use the locals to "liven up" the environment. She said all kinds of deals are thrown at the locals. Think of it this way as a tourist, would you rather go into an empty club or one that's rockin'?
     
  5. luci5

    luci5 Low-Roller

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    CET do have their own version which is Social Rewards. It pays in real $$$ that you can spend as you like at their properties.
     
  6. keno60

    keno60 VIP Whale

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    I always give them some play that they would not get. They make money on their 2 for 1 buffets and resort fees for an otherwise empty room. So when they
    say they gave away x amount of $, that not the market price for their rooms or the cost of their meals and services.
     
  7. sweetcanadian

    sweetcanadian High-Roller

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    i think it has to be pretty profitable.

    A person such as myself would have never stayed at MB or spent money there but i did because of the game.

    I would have stayed at the cheapest place possible otherwise, probably downtown. I may have not spent a ton of money but every dollar to them counts.

    Giving away free show tickets works too, it fills up shows that would not normally be full and have people spending money on the concessions.
     
  8. BigGTMike

    BigGTMike Low-Roller

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    It turned my one planned trip last September into three trips (Sept, Jan, April) so far and am scheming a fourth this September.
     
  9. illdonk

    illdonk Tourist

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    What we count as $400 or whatever worth of comps isn't the same as a casino expenditure of that amount, so factoring in additional traffic, dining, gambling, plus what people are spending to buy the MV chips (though minus development and support)...I'd imagine it's been profitable.
     
  10. The Furry One

    The Furry One Low-Roller

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    I'm sure it's been more than just profitable for them. For players the rewards obviously still seem worthwhile (or no-one would play it) but those rewards costs cents in the dollar to actually provide thus making it nowhere near as expensive an operation to maintain as it may look at first glance. As others have said when you add in chip buys and on-site spending that may not have happened without the extra footfall to props this game provides via redemption of it's rewards I doubt MGM execs fail to see this as anything other than a very successful venture. Personally I think it was a stroke of genius in terms of brand marketing.

    We've eschewed the Strip for quite a while now, as I'm sure plenty of other seasoned Vegas goers do, this next trip though we will be making at least two separate trips to Aria and Bellagio purely because of this game and will undoubtedly toss a little cash in their direction whilst there. Whilst some that redeem rewards will almost certainly be in and out without spending a dime I'm sure there are many, many more that will be like us.

    Furry
     
  11. leo21

    leo21 VIP Whale

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    It may be profitable but they are talking on a big risk. Some people will get a room and food rewards and spend most of their cash with MGM but others like me will just hit and run. They are set up to monitor the return in the casino but I don't know if they are really set up to track other retail activity.
    As for CET, Total Rewards already does what MyVegas does. It's set up to funnel people into Vegas. I don't know why CET would be interested in giving comps to folks for free that they know little about when they can just comp people from their local casinos and already have a good idea what they could possibly make off them.
     
  12. zignerlv

    zignerlv Low-Roller

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    Corporations do not publish data on this micro level to the public or even to analysts. It is confidential data. If you asked how profitable Bellagio was last quarter vs MGM Grand, that kind of information as well is of the same type, confidential. Any answer you get here telling you otherwise is a pure guess.
     
  13. Kickin

    Kickin Flea

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    CET has their social media TR platform as well as a mobile and Facebook gaming platform under Caesars Interactive Entertainment (CIE) since way before MGM and it became the biggest one in the social casino gaming market even before the legal online gambling in NJ.

    [​IMG]
    http://venturebeat.com/2013/07/01/zynga-no-longer-the-largest-social-casino-game-publisher/

    There are also two different questions being answered: Is myVegas profitable? And is myVegas profitable for MGM?

    Remember that myVegas is owned by PlayStudios, they are just partnered with MGM. I haven't read anything about what type of partnership that is, but given there is not a single mention of it in MGM's annual report it is probably a pure marketing arrangement. It could be as simple as PlayStudios simply buying rewards from MGM, much like a credit card company buys airlines miles from an airline. That is all the revenue the airline (or MGM) sees. Or it could be a more involved relationship that includes profit share. My guess is its closer to the former, particularly since myVegas/PlayStudios has partnered with some non-MGM entities as well.

    They do publish the profitability of individual resorts, it starts on page 19 of their latest annual report: http://mgmresorts.investorroom.com/index.php?s=120

    Why would that be confidential and what investor would be ok without knowing that information?
     
  14. zolar31

    zolar31 Low-Roller

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    MGM claims to have given away $6,000,000 in rewards, but in reality the cost to MGM is a very small percentage of this number.

    Reality: The cost to run a show is always about the same. If the theater has a 800 seat capacity, but only averages 600 tickets sold. How much does it cost to give away 200 tickets per night ? Very little, maybe an extra usher, bartender.

    Rooms, attractions, buffets are the same.

    Food rewards (non buffet) are different and have a higher cost. Now these rewards are spend $150 and get $75 off. At the start, these rewards were $75 and $100 gift certificates.
     
  15. pac1971

    pac1971 Tourist

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    Not to mention the people that have never been to Vegas that decide to go because of free hotel nights etc. Good chance they'll want to come back after that first trip..tell their friends etc.
     
  16. mgill1974

    mgill1974 Low-Roller

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    I have no interest in MGM properties but will be staying and eating there for free next trip, thanks to MyVegas.
     
  17. luci5

    luci5 Low-Roller

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    Staying at the Mirage at the moment courtesy of MyVegas. Got upgraded to a suite free of charge and haven't been charged the resort fee so win win.

    We have just had breakfast at Cravings so that is a bit of revenue for them, but haven't dropped a cent in the casino yet. Might do tonight when we got and see Love for free too.
     
  18. lvjeremylv

    lvjeremylv Tourist

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    I think the simple way to answer that question is like this: if it weren't profitable for them, they wouldn't still be doing it.
     
  19. bjpcyclone

    bjpcyclone High-Roller

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    I think its the opposite. It's almost no risk for MGM.

    I saw they have paid out $10 million in rewards. Seems low considering they have 2 million players. Let's be conservative and say their costs are 35% (I bet its WAY lower). So the game cost them $3.5 mil. To put that in context, a 30 second ad for the Super Bowl cost $3.5 million. But instead of 30 seconds to be in front of people, they get hundreds of hours while people play their game. Every one of their properties gets direct and repeated face time with the consumer. That just doesn't happen these days without spending tons and tons of money.

    The room rewards have to be the best deal for them. Cost the hotel nothing as they are usually never completely full and the resort fees covers their costs. Then they get people to eat, drink, and gamble at property.

    So its not risky at all. It's pretty genius marketing actually.
     
  20. lithium78

    lithium78 High-Roller

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    Since I live in NJ and do the majority of my gaming in AC, I generally stay and play at TR resorts. I also have the TR credit card and I participate in the CET Social Rewards program for free comps.

    However, since I've started also playing My Vegas, I changed some of my plans for my next Vegas trip to include free shows at MGM resorts, which means I will also be having some meals there and giving them some of my gaming.

    Will I switch from CET to MGM? Well, that depends on the experience I have on this trip. My Vegas could help MGM earn a lot more revenue from me and my friends. A big game-changer for me could be the results of MGM's application for a NJ gaming license.
     
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