Should MGM Resorts International focus on expanding its sports betting app features or investing in more physical sportsbooks at its casino properties?

Introduction

The trade-off question at hand is whether MGM Resorts International should focus on expanding its sports betting app features or invest in more physical sportsbooks at its casino properties. This scenario involves balancing digital innovation with traditional brick-and-mortar expansion in the competitive sports betting market. My response will analyze the key factors influencing this decision, propose a strategic approach, and provide a data-driven recommendation.

Step 1

Clarifying Questions (3 minutes)

• Context: I'm thinking about the current market landscape. Could you provide insights into MGM's market share in both digital and physical sports betting, and how it compares to key competitors?

Why it matters: Helps assess the relative strengths and growth opportunities in each area. Expected answer: MGM has a strong physical presence but is still growing its digital market share. Impact on approach: Would influence whether to focus on strengthening existing advantages or catching up in weaker areas.

• Business Context: Based on industry trends, I'm assuming digital betting is growing faster. What percentage of MGM's sports betting revenue currently comes from the app versus physical sportsbooks?

Why it matters: Indicates the current balance and potential for growth in each channel. Expected answer: Digital is growing but physical still accounts for a significant portion of revenue. Impact on approach: Would help determine if resources should be allocated to accelerate digital growth or protect physical revenue.

• User Impact: I'm thinking about user preferences. Do we have data on user overlap between app users and physical sportsbook visitors?

Why it matters: Helps understand if we're serving distinct user groups or if there's significant crossover. Expected answer: There's some overlap, but also distinct user segments for each channel. Impact on approach: Would influence whether to focus on channel-specific features or cross-channel integration.

• Technical: Regarding app development, what's our current capability for rapid feature deployment and scaling?

Why it matters: Assesses our ability to quickly innovate and handle increased digital traffic. Expected answer: We have a solid foundation but room for improvement in deployment speed. Impact on approach: Would determine if we need to invest in technical infrastructure before expanding features.

• Resource: Considering both options require investment, what's our budget allocation for digital versus physical expansion in the next fiscal year?

Why it matters: Helps understand financial constraints and current priorities. Expected answer: There's a balanced budget with some flexibility for reallocation. Impact on approach: Would guide the scale and pace of investment in either direction.