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COMMITMENTS AND CONTINGENCIES
12 Months Ended
Dec. 31, 2022
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES COMMITMENTS AND CONTINGENCIES
Litigation. The Company is a party to various legal proceedings, most of which relate to routine matters incidental to its business. Management does not believe that the outcome of such proceedings will have a material adverse effect on the Company’s financial position, results of operations or cash flows.

Commitments. MGM Grand Paradise concession contract. Pursuant to the concession contract, MGM Grand Paradise is required to pay (i) a special gaming tax of 35% of gross gaming revenue, which is subject to a minimum annual payment that would be levied in the form of a special premium in the event the minimum amount is not achieved, (ii) a fixed annual premium, (iii) a variable premium based on the number of gaming tables and machines, and (iv) special levies of up to 5% of gross gaming revenue. In addition, MGM Grand Paradise is required to make annual payments in connection with the temporary use of the reverted gaming assets based upon square meters of the reverted casino areas. Based upon the approved number of gaming tables and slot machines, estimates of the Macau average price index, and square meters of the reverted casino areas, each as of January 1, 2023, the minimum future payments for the above obligations are approximately MOP 22.8 billion ($2.8 billion as of December 31, 2022).

The gaming concession also obligates MGM Grand Paradise to invest in various gaming and non-gaming projects and the development of international tourist markets over the ten-year term of the concession in an amount of approximately MOP 16.7 billion ($2.1 billion as of December 31, 2022) of which MOP 15 billion ($1.9 billion as of December 31, 2022) is designated for non-gaming projects, for which the non-gaming commitment is subject to increases of up to 20% in the following years if the market-wide Macau annual gross gaming revenue achieves or exceeds MOP 180 billion ($22.4 billion as of December 31, 2022). The increased commitment is subject to a 4% reduction per year if the triggering event occurs on or after the sixth year of the term of the concession contract. The projects related to the investment are subject to annual review and Macau government approval and, therefore, the timing and magnitude of the projects comprising the investment are subject to change.

The gaming law also requires concessionaires to maintain share capital of at least MOP 5 billion (approximately $622 million as of December 31, 2022), which further required a cash deposit of such amount until commencement of activity under the concession on January 1, 2023 at which point the deposit was available for use in operations, provided that the net asset value of the concessionaire is not at any time less than such amount.

Other guarantees. The Company and its subsidiaries are party to various guarantee contracts in the normal course of business, which are generally supported by letters of credit issued by financial institutions. The Company’s senior credit facility limits the amount of letters of credit that can be issued to $1.35 billion. At December 31, 2022, $31 million in letters of credit were outstanding under the Company’s senior credit facility. The amount of available borrowings under the credit facility is reduced by any outstanding letters of credit.

MGM China bank guarantees. In May 2019, MGM Grand Paradise provided a bank guarantee to the government of Macau in the amount of MOP 820 million, which was increased in September 2022 to MOP 880 million (approximately $110 million as of December 31, 2022) to warrant the fulfillment of an existing commitment of labor liabilities upon
expiration of the gaming subconcession. In connection with the expiration of the gaming subconcession and issuance of the gaming concession in January 2023, the bank guarantees were cancelled and bank guarantees, secured by pledged cash, were provided to the government of Macau in the amount of MOP 1 billion (approximately $124 million as of December 31, 2022) to warrant the fulfillment of labor liabilities and of damages or losses that may result if there is noncompliance with the concession. The guarantees expire 180 days after the end of the concession term.

Bellagio BREIT Venture shortfall guarantee. The Company provides a shortfall guarantee of the $3.01 billion principal amount of indebtedness (and any interest accrued and unpaid thereon) of Bellagio BREIT Venture, which matures in 2029. The terms of the shortfall guarantee provide that after the lenders have exhausted certain remedies to collect on the obligations under the indebtedness, the Company would then be responsible for any shortfall between the value of the collateral, which is the real estate assets of Bellagio owned by Bellagio BREIT Venture, and the debt obligation. This guarantee is accounted for under ASC 460 at fair value; such value is immaterial.

VICI BREIT Venture shortfall guarantee. The Company provides a shortfall guarantee of the $3.0 billion principal amount of indebtedness (and any interest accrued and unpaid thereon) of VICI BREIT Venture, which has an initial term of 12 years, maturing in 2032, with an anticipated repayment date of March 2030. The terms of the shortfall guarantee provide that after the lenders have exhausted certain remedies to collect on the obligations under the indebtedness, the Company would then be responsible for any shortfall between the value of the collateral, which is the real estate assets of Mandalay Bay and MGM Grand Las Vegas, owned by VICI BREIT Venture, and the debt obligation. This guarantee is accounted for under ASC 460 at fair value; such value is immaterial.