Posted on: December 4, 2023, 03:20h.
Last updated on: December 4, 2023, 03:45h.
Online casino and sportsbook operator BetMGM said Monday that its 2023 revenue will come in at the high end of a previously forecast range of $1.8 billion to $2 billion while reiterating it will be profitable for the back half of this year.
CEO Adam Greenblatt made comments to that effect on a conference call with analysts on Monday. BetMGM is half-owned by MGM, with the other 50% controlled by UK-based gaming giant Entain Plc. The operator’s products are available in 28 jurisdictions and at 38 retail sportsbooks in North America.
Also this year, we have significantly improved our financial position, growing earnings before, interest, taxes, depreciation, and amortization (EBITDA) by well over $300 million, and achieving EBITDA profitability in the second half, putting us in a position to be self-funded from here on,” Greenblatt told analysts.
BetMGM’s ability to self-fund is good news for parents Entain and MGM, which have contributed $1.26 billion to the online gaming unit to date. That figure includes $150 million allocated this year to BetMGM by the owners.
BetMGM Targets $500 Million in 2026 EBITDA
In addition to the 2023 sales forecast and the reiteration of profitability arriving for the final six months of this year, Greenblatt told analysts that BetMGM is expecting to generate $500 million in EBITDA in 2026.
BetMGM’s ability to stem losses, turn profitable, and grow EBITDA is crucial at a time when rivals such as DraftKings (NASDAQ: DKNG) and FanDuel, the two largest online sportsbook operators, are achieving impressive financial results. FanDuel is expected to be profitable for all of this year while DraftKings recently said it expects positive EBITDA in 2024.
CFO Gary Deutsch also highlighted BetMGM’s iGaming growth, a vital arena because internet casinos offer operators better margins and more room for regional growth.
“While discussions of hold percents and win margins often focus on sports, we’ve also seen expansion of our NGR margin in iGaming,” said the BetMGM CFO. “This is also driven by bonus optimization across our casino players as well as an increase in recreational players that we’ve acquired in the iGaming states. Recreational players tend to prefer slots to table games. Slots are higher margin.”
He added that in the third quarter, 65% of BetMGM sports bettors also played poker or online casino games in the jurisdictions in which the company offers all three products.
BetMGM Product Advancements
With the recent entries of Fanatics and ESPN Bet into the online sports betting fray, well-heeled competition in the industry is as intense as it’s ever been, meaning product development is paramount.
Additionally, operators need to make the deposit/withdrawal process more efficient in an effort to retain customers. BetMGM is attempting to check those boxes.
“We continue to invest in making our app more intuitive and discovery easier, including a redesign of the event pages that now feature more markets, while simultaneously elevating the most popular logical groups of content to simplify navigation and creation of Same Game Parlays,” noted Greenblatt. “We’ve also added new payment methods, making it easier and faster for users to deposit and place a bet or withdraw their winnings with greater than 70% of our withdrawals coming from fast channels such as Visa, Venmo, and Apple Pay.”
