BetMGM Sees Long-Term Strength Despite Prediction Market Disruption

BetMGM on Tuesday reported steady first-quarter growth but warned that an aggressive wave of spending by prediction market operators is reshaping the competitive landscape for online sports betting and pressuring near-term profitability.

Key Takeaways

• BetMGM reported modest revenue growth but lowered guidance as prediction markets increase competition and customer acquisition costs.
• Higher-value players remain resilient, while lower-tier users decline amid reduced reinvestment and aggressive targeting by rivals.
• Executives view prediction markets as a short-term disruption, citing unsustainable spending and potential regulatory challenges ahead.

The company posted net revenue of $696 million in the first quarter, up 6% year over year, with iGaming revenue rising 9% and online sports betting up 4%, according to its earnings release. Adjusted EBITDA reached $25 million, a gain of 11%, as BetMGM officials pointed to continued execution of its player management strategy and strength in higher-value customer segments. 

But results came in slightly below expectations, citing rising competitive pressure, partially from prediction markets, as well as a mix of “unfavorable” sports outcomes. Monthly active users declined 16% during that same time, which officials also attributed partially to prediction market sites. 

The company revised its fiscal year 2026 adjusted EBITDA to the lower end of its prior projection of between $300 and $350 million. Net revenue guidance lowered to between $2.9 billion and $3.1 billion, down from the $3.1 billion-to-$3.2 billion range. 

BetMGM CEO Adam Greenblatt made clear on the accompanying earnings call that the headline numbers don’t fully account for the rising online sports betting operating expenses driven by increasing cost per acquisition. Greenblatt said during the past quarter there has been a surge in prediction market promotional activity targeting sportsbook customers, including offering event contracts as American-style betting odds that resemble sportsbooks.

 “This jump is largely driven by new sports betting companies buying media in the category,” Greenblatt said. “They call themselves prediction markets.” 

Financial impacts

 Though BetMGM is feeling pressure on its bottom line,  executives emphasized during Tuesday’s call that the underlying business remains resilient. 

“What we are still seeing, notwithstanding a weak margin in our online sports betting business in the first quarter, year-on-year growth,” Greenblatt said, calling the results “pretty encouraging.” 

That strength, management said, is concentrated among higher-value players. BetMGM officials reaffirmed their prioritization of premium customers, a segment the company has seen remain robust despite the influx of new competition. 

BetMGM saw a 25% year-over-year increase in net gaming revenue per active user in online sports and a 12% increase in iGaming. 

“We’re actually seeing the more premium parts of our database, incredibly resilient,” Greenblatt said. “The higher up you get, the better performing year on year our players have performed.” 

By contrast, lower-value customers appear more exposed to both external competition and internal strategic shifts. The company noted it is intentionally reducing reinvestment in marginal players, even as those users are being aggressively targeted by prediction market operators. 

Executives framed the current environment as temporary, driven by what they repeatedly described as excessive and unsustainable spending. Greenblatt maintained BetMGM was on pace to reach its long-term goal of $500 million in adjusted EBITDA in 2027. 

“My expectation is that the majority of these players will return over time,” Greenblatt said. “Because the product experience in online sports betting is better ... and we have a higher service level.” 

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Challenges for prediction markets

Greenblatt also offered a stark assessment of how prediction markets could evolve if current trends persist. He compared the current customer acquisition pursuit to a “hardcore grinder poker environment, where you have shark on shark,” saying that “recreational players lose too quickly” in those ecosystems. 

Beyond competitive dynamics, BetMGM is positioning prediction markets as a regulatory liability. The company reiterated its alignment with state regulators and tribal partners and pointed to a potential legal battle ahead.

BetMGM is the highest-grossing digital sportsbook operator without a prediction market, a vertical it has not pursued in part over concerns it could jeopardize its brick-and-mortar gaming licenses in Nevada and other states. The nation’s three largest digital-focused gaming operators by revenue, FanDuel, DraftKings and Fanatics, all offer prediction markets. 

BetMGM Q1 notable figures:

- Net Revenue of $696 million, +6% YoY
- iGaming Net Revenue +9% YoY
- Online Sports Net Revenue +4% YoY
- Adjusted EBITDA of $25 million, +11% YoY

— Ryan Butler (@ButlerBets) April 14, 2026

Greenblatt again echoed growing nationwide sentiment that prediction markets’ fate is destined for final determination in the Supreme Court. In the meantime, executives acknowledged that the rise of prediction markets may also help accelerate online sports betting legalization efforts in key states, including potentially California. 

For now, BetMGM is planning for continued pressure. The company said it is refining its marketing strategy and reallocating capital toward higher-return segments, including iGaming and premium players, while assuming current conditions persist. 

The broader long-term message from management was clear: Prediction markets are creating near-term disruption, but BetMGM does not view them as a long-term structural threat. Instead, the company is positioning itself to outlast what it sees as a costly and ultimately unsustainable land grab. 

“You just have to look at the player-level unit economics for prediction market operators and you will quickly conclude that the current spending wave cannot sustain,” Greenblatt said.

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