MGM Resorts International (MGM): 5 FORCES Analysis [Nov-2025 Updated]

You're looking for a clear-eyed view of MGM Resorts International's competitive position, so let's map out the five forces that define its industry structure, using late 2025 data. Honestly, the landscape is a tug-of-war: you've got intense rivalry, especially with Caesars and Wynn, and a growing substitute threat from online gambling-which is projected to hit $26.8 billion in gross revenue by year-end-but you also benefit from massive capital barriers keeping new players out of prime real estate like the Strip. To make smart calls on your position, you need to see exactly where the pressure points are, from supplier leverage to customer price sensitivity near the $159.16 (2023 proxy) Las Vegas average room rate. Dive in below for the full, force-by-force breakdown.

MGM Resorts International (MGM) - Porter's Five Forces: Bargaining power of suppliers

You're analyzing the supplier landscape for MGM Resorts International, a company with massive, recurring needs across hospitality, technology, and gaming. The power your suppliers hold directly impacts your operating margins and service quality. Here's the breakdown of that dynamic as we look toward late 2025.

The supplier base for MGM Resorts is not monolithic; it's a mix of highly concentrated, specialized vendors and a fragmented market for general consumables. This split means your leverage varies significantly depending on what you're buying.

Specialized Gaming Technology Concentration

For the core gaming equipment-the slot machines and related systems-the market is tight. Industry knowledge suggests that suppliers of specialized gaming technology are concentrated, with 3-4 primary manufacturers for machines dictating terms. This concentration inherently raises the bargaining power of these specific suppliers, as switching costs for certified, regulated gaming hardware can be substantial. You can't just swap out a certified slot bank overnight.

Leverage Over General Suppliers

Conversely, for high-volume, non-specialized inputs, MGM Resorts International holds the upper hand. Suppliers of general goods like food, beverage, and linens are fragmented. This fragmentation gives MGM Resorts International high leverage in negotiations, especially given the sheer volume you move. Think about the scale: your consolidated net revenues hit $4.4 billion in the second quarter of 2025 alone. That kind of purchasing volume translates directly into favorable pricing and service terms for commodity items.

Market Power from Procurement Scale

MGM Resorts International's large-scale procurement, particularly across its major footprint in Las Vegas, provides significant market power. We know a large proportion of your overall spend is concentrated there. You use this power to drive your corporate goals, not just cost savings. Here's a quick look at the categories where this scale is most impactful:

It's about using that scale to advance commitments, not just cut costs. That's smart business.

Limited Threat of Forward Integration

The threat of forward integration-where a supplier tries to enter the casino operation business itself-is limited for most vendors. The casino operations are highly regulated, requiring specific licensing and compliance that most general suppliers lack the expertise or desire to obtain. This regulatory moat protects MGM Resorts from many typical competitive threats, though gaming equipment manufacturers must adhere to strict registration and licensing requirements to even sell to you. Still, they are suppliers, not operators.

Supplier Base Expansion and Diversity

To actively mitigate reliance on any single segment and build community value, MGM Resorts International is focused on expanding its supplier base. The company aims to graduate 150 diverse-owned businesses by the end of 2025 through its mentorship program. This initiative is designed to cultivate smaller, certified businesses-those owned by minorities, women, veterans, and others-giving them the tools to compete for your contracts. This directly addresses the fragmentation point by actively developing more qualified, diverse options for categories like foodservice and professional services.

The key elements of this supplier development include:

• Mentorship program structure (eight-month duration).
• Focus on enhancing operational efficiencies for small businesses.
• Goal to graduate 150 diverse-owned businesses by 2025.
• Inclusion of businesses owned by veterans and LGBTQ+ individuals.

If onboarding takes 14+ days, churn risk rises-the same applies to integrating new, smaller suppliers; the process needs to be efficient.

MGM Resorts International (MGM) - Porter's Five Forces: Bargaining power of customers

You're looking at customer power in the hospitality sector, and honestly, it's a mixed bag for MGM Resorts International right now, heavily influenced by price perception.

High customer price sensitivity definitely shows up in the Las Vegas room rates, which have been volatile in 2025. While Strip hotel rates for visitors accommodated by MGM Resorts soared 3% in the first quarter of 2025, the overall trend suggests customers are pushing back on cost. For instance, through the first 10 months of 2025, the average nightly rate was actually cheaper year-over-year at $182.58. By October 2025, the average rate on the Strip was $219.56, but this followed a 5.5% drop in the first half of the year. Furthermore, the average resort fee on the Strip in 2025 hovers between $52 and $59 per night, which customers feel acutely, even if the FTC mandated full disclosure in May 2025. This mandatory transparency definitely puts pressure on MGM Resorts to justify its total price package.

For the typical leisure traveler, switching costs are low. If you're just booking a weekend stay, you can jump over to Caesars Entertainment or Wynn Resorts with minimal friction. To counter this, MGM Resorts is leaning hard on its loyalty program. The MGM Rewards program crossed 50 million members as of the first quarter of 2025, which is a massive base to influence. They introduced Milestone Rewards to keep people engaged between tier levels, offering celebration credits worth between $100 and $500 in property benefits. This structure creates a switching cost because walking away means losing banked progress toward those next-level perks.

The convention and group business segment, however, operates on a completely different negotiation plane. These customers wield significant power due to volume. MGM Resorts is bringing to fruition its goal of industry leadership here, with over 2.2 million room nights on the books for 2025. Plus, the CEO noted in November 2025 that the pipeline for the next 16 months is unprecedented, suggesting strong demand that temporarily shifts some power back to MGM Resorts for future bookings, but current large-volume contracts are negotiated with high leverage on the customer side.

The rise of online booking platforms is a constant check on pricing. Customers use these tools for price transparency, which is amplified by the Federal Trade Commission's rule enacted in May 2025, requiring hotels to disclose all costs upfront. This means customers can easily compare the total cost, including resort fees, across the entire competitive set before committing to an MGM Resorts property.

Here's a quick look at some of the relevant 2025 figures influencing customer power:

The power dynamic for leisure customers is characterized by price sensitivity, but MGM Resorts is actively trying to raise the cost of leaving through its loyalty structure. You see this in the program's structure:

• Dedicated reservation lines for members.
• Status match benefits with Marriott Bonvoy (e.g., Gold matches to Silver Elite).
• Milestone Rewards offering $100-$500 in property credits.
• Ability to earn up to 25,000 Tier Credits that can roll over into the 2026 earning year.

Still, the group business customers hold the upper hand on large contracts, evidenced by the sheer volume of room nights they commit to, even as overall visitor volume in 2025 has been a down year for the destination.

MGM Resorts International (MGM) - Porter's Five Forces: Competitive rivalry

The competitive rivalry facing MGM Resorts International is fierce, particularly in its core Las Vegas market where it faces off against major integrated resort operators like Caesars Entertainment and Wynn Resorts. This rivalry isn't just about property size; it's about controlling the guest experience and the physical footprint on the Strip. MGM Resorts controls approximately 40% of the rooms on the Las Vegas Strip, while Caesars Entertainment holds roughly 25% of those rooms. Wynn Resorts, on the other hand, competes by focusing on premium vibes and curated experiences rather than sheer volume.

While the requested 15.2% overall market share in the Casino Hotels industry was not explicitly found for late 2025, MGM China reported a record third-quarter market share of 15.5% in Q3 2025, showing strong performance in that key Asian market. Conversely, the Las Vegas segment saw a 7% decline in net revenue year-over-year for Q3 2025, with segment EBITDAR falling by $130 million year-over-year to $601 million. Management attributed part of this softness to a $25 million impact from the MGM Grand Room renovation and a $78 million impact from lower occupancy and Average Daily Rates (ADR). To counter this, MGM Resorts executed a 'fabulous 5-day sale' that moved over 300,000 room nights, nearly double their typical pace, showing direct competitive pricing action in the non-gaming segment.

The digital front is an escalating battleground. BetMGM, the joint venture of MGM Resorts and Entain, is locked in a direct fight with DraftKings and FanDuel for dominance in online gaming. The rivalry is measurable in market share percentages across iCasino and sports betting, where BetMGM has seen its position erode against the top two players.

The digital competitive landscape as of late 2025 is starkly divided:

Despite the competitive pressure in the digital space, BetMGM is raising its full-year guidance, with expected 2025 EBITDA around $200 million, and is set to distribute at least $100 million in cash to MGM Resorts in Q4 2025.

Exit barriers are structurally high due to the nature of the assets. MGM Resorts International reported Total Assets of $41.411B as of September 30, 2025. These assets are massive, specialized, and illiquid real estate holdings, primarily the integrated resorts on the Las Vegas Strip. The industry trend of sale-leaseback transactions, where operators sell the real estate to REITs like VICI Properties (which owns assets like Caesars Palace and MGM Grand) to unlock capital, underscores the immense, fixed nature of this capital base. The sheer scale of these fixed assets makes pivoting or exiting the core business prohibitively expensive and slow, effectively locking competitors into a long-term, high-capital-intensity contest.

Rivalry manifests in aggressive non-gaming promotions designed to feed the casino floor. This includes:

• MGM Resorts controlling approximately 40% of Strip rooms.
• Caesars Entertainment controlling approximately 25% of Strip rooms.
• MGM Grand room renovations causing a $25 million EBITDAR disruption in Q3 2025.
• MGM China achieving a record 15.5% market share in Q3 2025.
• BetMGM's Q3 2025 revenue growth being overshadowed by a $23 million EBITDAR loss in the MGM Digital segment.

MGM Resorts International (MGM) - Porter's Five Forces: Threat of substitutes

The threat from substitutes for MGM Resorts International is multifaceted, coming from both digital channels and alternative physical leisure experiences. You need to look at where customer discretionary spending is being diverted.

The threat from other destination leisure options like cruises, theme parks, and non-casino resorts remains a moderate pressure point. For context on the broader leisure landscape, domestic leisure travel spending is forecast to reach $895 billion in 2025, with total U.S. travel spending projected at $1.35 trillion for the same year. Still, Las Vegas saw a dip in June 2025, welcoming just over 3 million tourists, which was about 400,000 fewer than the prior year, marking a drop of more than 11%.

The US online gambling market represents a significant and growing substitute. Industry forecasts show this market is projected to reach $26.8 billion in gross revenues by the end of 2025, up from $23.4 billion in 2024. This digital shift offers a low-cost, convenient alternative to the land-based gaming experience.

Non-gaming entertainment, such as concerts and sporting events, is an increasing substitute competing for the same leisure dollar. While consumers plan to travel more, they are leaning toward more free or low-cost local options; 32% of leisure entertainment consumers plan to do more local activities than the previous year, favoring options like beaches and parks.

MGM Resorts International actively mitigates this by diversifying its revenue streams away from pure gaming. For example, the company reported that its Q3 2025 Regional Operations revenue was $957 million. Furthermore, the digital arm, BetMGM, is now a profitable business, raising its full-year 2025 EBITDA guidance to about $200 million and announcing an initial cash distribution to MGM Resorts expected to be at least $100 million in the fourth quarter of 2025.

Here's a quick look at the competitive landscape of substitutes:

The pressure from online sports betting and iGaming is direct because they offer a low-cost, convenient substitute, which pressures the high-overhead model of land-based gaming.

The alternatives competing for consumer time include:

• Cruises and theme parks.
• Non-casino resorts and attractions.
• Local, low-cost leisure activities.
• Digital entertainment and social media.

MGM Resorts International (MGM) - Porter's Five Forces: Threat of new entrants

You're looking at the barriers to entry for new players in the casino and integrated resort space, and honestly, the deck is stacked heavily in favor of established giants like MGM Resorts International. The sheer scale of investment required is the first wall.

The capital expenditure needed for a world-class integrated resort is staggering. Look at the MGM Osaka project in Japan; the total investment is now expected to reach JPY1.51 trillion, which is about $10.24 billion currently, as of September 2025 updates. MGM Resorts International's own equity commitment for its 44-percent stake has increased to JPY428 billion, or around $3 billion. That kind of upfront cash commitment immediately screens out almost everyone. Here's the quick math: a new entrant needs billions just to break ground in a prime international market.

Government licensing and regulatory hurdles are the second moat protecting MGM Resorts International. You have to prove suitability across every market you touch. For instance, MGM Resorts International accepted an $8.5 million fine in April 2025 to settle charges regarding its anti-money laundering (AML) protocols in Nevada. That shows you the level of scrutiny; one slip in one place can jeopardize billions in investment elsewhere. International expansion is no easier; in the UAE, MGM Resorts International is still awaiting the government to pass a gambling decree before it can even seek a casino gaming license in Dubai or Abu Dhabi. It's a long, drawn-out process that only deep-pocketed, experienced operators can navigate.

Established players benefit from massive economies of scale and brand equity that new entrants cannot easily replicate. MGM Resorts International is booking over 2.2 million room nights for 2025 across its domestic operations, showing deep market penetration and operational scale. New entrants face the immediate challenge of building brand trust against incumbents who have decades of operational history. To be fair, this scale also means that when things go wrong, the fines are substantial, like the $8.5 million settlement MGM paid in April 2025, or the $7.8 million fine Caesars Entertainment received for similar AML issues.

The digital space is where the threat is definitely more acute, but even there, the incumbents are strong. New entrants like Fanatics and ESPN Bet are aggressively pushing into digital, but they are fighting for scraps against the established leaders. ESPN Bet, for example, held only a 3.2% share of the U.S. online sports betting market as of May 2025, far behind DraftKings at 37% and FanDuel at 35%. Fanatics, while a financial juggernaut with a $31 billion valuation and over $2 billion in funding raised, is still establishing its footing in this specific vertical, even as the overall market is projected to hit a $25 billion Gross Gaming Revenue market beyond 2027. The digital barrier is lower, but the competitive intensity is higher.

Access to the best physical real estate is nearly impossible to replicate. The Las Vegas Strip is a finite resource. As of early 2025, there were about $30 billion worth of major projects planned, proposed, or under construction in the Las Vegas area, including the $6 billion LVXP Arena and Casino Resort project. Securing a prime location like Yumeshima Island for the Osaka IR, which is projected to draw 20 million visitors annually, took nearly two decades of planning and regulatory navigation. That scarcity locks out potential competitors from the most desirable markets.

Here is a snapshot of the competitive landscape for digital entrants:

The regulatory environment demands massive compliance budgets, as shown by the fines levied against major players:

• MGM Resorts International AML Fine (April 2025): $8.5 million
• Caesars Entertainment AML Fine (Late 2025): US$7.8 million
• Resorts World AML Fine (Prior to late 2025): US$10.5 million

For physical integrated resorts, the capital hurdle is the primary deterrent:

• MGM Osaka Total Project Investment (Latest Estimate): $10.24 billion
• MGM Equity Commitment to Osaka: Approx. $3 billion
• Las Vegas Strip Projects Under Construction/Proposed (Late 2024/Early 2025): Approx. $30 billion

Finance: draft 13-week cash view by Friday.