BetMGM says it is and will remain profitable this year, but the operator is also reporting its share of the online sports betting market is declining.
Figures for the first half of 2023 reported on Wednesday by BetMGM, a joint venture of Entain PLC and MGM Resorts International, included net revenue of $944 million from its sports betting sites and online casinos.
This, the operator said, puts it in line for full-year revenue near the “upper end” of its previously provided $1.8-billion to $2-billion guidance range.
BetMGM also said, without disclosing numbers, that it achieved positive earnings before interest, taxes, depreciation, and amortization (EBITDA) in the second quarter of 2023 and that it will remain in the black during the latter half of the year.
“Our focus remains on building a sustainable, scalable, and returns-focused business with leading products that our players enjoy responsibly,” BetMGM CEO Adam Greenblatt said in a press release. “We look forward to the remainder of the year, buoyed by ongoing product improvements, tremendous support from our shareholders providing access to new assets and partnerships, and – above all – our extraordinary team at BetMGM."
BetMGM says it generated positive earnings before interest, taxes, depreciation, and amortization in the second quarter of 2023, and that it remains on track to stay in the black during the latter half of this year. Full H1 2023 update here:https://t.co/hvzUyXGNE6 pic.twitter.com/sK80kgsif2
— Geoff Zochodne (@GeoffZochodne) July 26, 2023
But BetMGM’s profitability comes as it is losing market share in one of its key businesses, legal sports betting. The bookmaker was live in 26 jurisdictions, including the Canadian province of Ontario, during the first half of 2023.
While it launched in new jurisdictions like Massachusetts and Ohio during the first six months of the year, the company reported its overall online sports betting market share — going by gross gaming revenue and excluding New York, where BetMGM has taken issue with the high tax rate — was 11% for the three months ended April 2023. That was down from the 13% share the company reported in January.
Moreover, BetMGM said it had a 13% share of the online sports betting market in jurisdictions where it was live on the first day of legal wagering. That was down from the 20% share reported at the start of 2023. The reporting for BetMGM is consistent with a report released earlier this month by investment banking firm Jefferies, which showed the operator’s online sports betting market share fell from 16% for the first quarter of 2021 to 9% as of the second quarter of 2023.
Those figures suggest DraftKings and FanDuel are pulling away from BetMGM in the realm of sports betting. Despite this, BetMGM’s casino ties have helped it maintain a strong position in iGaming, which is typically a more profitable business than sports betting. BetMGM said it leads the iGaming sector with a market share of approximately 27% in online slots and table games.
Sustain and enhance
BetMGM also says its plans for positive EBITDA in the second half of 2023 include its spending on upcoming launches of online sports betting in Kentucky and North Carolina that were not baked into the forecast coming into this year. Additionally, the company says it will become “self-sustaining” in the second half of this year, with no further cash injections anticipated from MGM or Entain after the $150 million already budgeted for 2023.
And, while market share may be down, BetMGM says other metrics are improving and that it has some strategic initiatives that could give it a boost. Among other things, the company said its first-half revenue for digital sports betting was up by 65% for players acquired in 2021 or earlier.
One of BetMGM's owners, Entain, recently announced the acquisition of “pricing and risk specialist” Angstrom Sports as well, which BetMGM said will enhance its sportsbook, “particularly in the fast-growing markets of parlay and in-play wagering, and provide players with a greatly improved experience.”
