Friday, June 2, 2023

Bill Hornbuckle: the gamer with a steady hand

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Bill Hornbuckle was born in Japan, raised in Connecticut but became a Las Vegas man through and through.

The boss of the MGM Resorts casino group moved to the city at the age of 23 in 1981 to earn a degree in hotel administration and never left. After working for casino mogul Steve Wynn and at Caesar’s Palace, his MGM career began in 1998. Jim murren announced his departure in February of last year, Mr. Hornbuckle finally rose to the top position, at a time of maximum difficulty.

By the time he took over as interim CEO, the pandemic hit Vegas. MGM has closed all of its casinos and laid off most of its 68,000 employees. It has since reduced its workforce by about a quarter, and while all of its resorts are now open, it is limited by 25% occupancy limits for Nevada state casinos, which is home to the majority of its 29 properties.

In addition to the immediate fallout from a global health crisis, Hornbuckle, who took the permanent leadership role in July, must also adapt the group to cope with the long-term structural changes reshaping the industry. Part of the plan is MGM’s lawsuit of UK gaming company Entain, its partner in a US online sports betting joint venture.

Casino customers are an aging demographic, while the challenge of the traditional resort model of online gambling has been magnified significantly by the pandemic. Added to that, the casino concessions in the group’s other hub, Macau, will expire in 2022 without the Chinese or Macanese governments indicating whether they will be renewed.

MGM has two strategies that it hopes will work in mitigation: increasing its share of the burgeoning online gambling and sports betting market in the United States, and obtaining a license to build one. of the first major casinos in Japan.

It was also in the process of selling the last of its real estate assets to an investment trust when Mr. Hornbuckle took the reins.

“It’s a business that is undergoing change,” said David Katz, analyst at Jefferies, who has followed MGM since 2001. “The Las Vegas Strip will return to a new normal. . .[but]the advent of digital gaming has become so deeply important. “

With the Japanese company – a project to win one of three licenses to operate a mega casino in a country where most forms of gambling are prohibited – blocked by the pandemic, MGM is focusing its efforts on the states -United.

He launched an offer to buy Entain, the UK gaming company with which she runs BetMGM, towards the end of last year. The £ 8billion proposal, which came to light this month, has been greeted with embarrassment by Entain’s board, which said it was ‘significantly undervaluing’ the company.

However, an unexpected change of Chief Executive at Entain may change the dynamics, while Hornbuckle has until February 1 to make a firm offer.

MGM’s largest shareholder, billionaire Barry Diller’s IAC investment group, has said it will back the offer, although Mr Diller has admitted he is.skepticalOn her success, by investing an additional $ 1 billion on top of the $ 1 billion stake she took in MGM in August.

“Now that [Mr Hornbuckle] is Managing Director, he is responsible for driving the share price, ”said Adam Greenblatt, Managing Director of BetMGM. “Look at what the perceived success in sports betting has done for Penn.”

Casino operator Penn National bought a controlling stake in sports media company Barstool Sports in January last year. Since then, its share price has tripled to around $ 104, more than three times MGM’s current value.

According to the testimony of a game executive who worked with both Mr Hornbuckle and his predecessor, the current CEO of MGM should be up to a tough job.

The two men were “chalk and cheese,” the executive said. “Murren was very emotional and towards the end of his time has become very defensive as Bill is a much more measured person.”

Another longtime Vegas executive compared Mr. Hornbuckle to one of the big names in the industry he previously worked for: Steve Wynn.

He said Mr Hornbuckle’s personality was “180 degrees opposite” to that of Mr Wynn, but the MGM boss was “no less strategic, no less clear”.

Prior to joining MGM, Mr. Hornbuckle had worked for Mr. Wynn’s Golden Nugget Casino and at the opening of The Mirage hotel in 1989, then the largest in the world with 3,044 rooms. He also oversaw the $ 625 million renovation of Caesar’s Palace, still one of the best-known resorts on the Las Vegas Strip.

He’s a sports car enthusiast and collects Porsches, but he’s also known to come to work in a Ferrari. “He likes quality things,” said Alan Feldman, a fellow at the University of Nevada in Las Vegas, who has known him for more than 30 years. “He wears beautiful watches and clothes and his house in Vegas is amazingly beautiful but he doesn’t show it.

He was a popular choice to succeed Mr Mürren, who also took over in times of crisis – during the 2008 financial crash.

“Bill’s experienced and consistent leadership is a tremendous asset, not only to MGM, but to the entire gaming industry as we continue to recover from this most turbulent year,” said Bill Miller, President. from the American Gaming Association.

A steady hand will be crucial as Mr Hornbuckle guides the company to meet the expectations of Mr Diller, who told the Financial Times this month that if MGM does not achieve a leadership position in the US market “with all the opportunities we have, we must be taken away and shot down ”.

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