MGM Resorts and Entain have issued a business update on their sports betting and iGaming joint venture BetMGM. The brand now expects to deliver net revenue from operations of over $1.3 billion from a prior $1 billion forecast in 2022, when it will receive $450 million investment from MGM and Entain this year, and reach positive EBITDA in 2023, according to a press statement.
According to a press statement, BetMGM is achieving market share in line with its long-term target of 20%-25% in US sports betting and iGaming. The business is the number 2 operator for sports betting and iGaming across the markets in which it operates, with a 24% market share for three months to November 2021.
"The highly talented team at BetMGM is executing our plan with purpose, passion and discipline, and our results speak for themselves,” said Adam Greenblatt, Chief Executive Officer of BetMGM. “After only 3 years into our journey, we have cemented the credibility of BetMGM's leadership ambition in sports betting and iGaming in the U.S.”
The performance update also remarks BetMGM remains the market leader in iGaming for the US, with 30% market share for the three months to November 2021 in the 19 jurisdictions in which it operates -four for iGaming, 19 for sports betting-.
But the company says that it plans to further extend this influence in the coming months. BetMGM expects to reach “approximately 40% of the US adult population, with 2 further jurisdiction launches this year, plus launches in Canada and Puerto Rico.
“2022 is a critical year, where the leading national operators will reach critical mass, paving the way for the next phase of the sector's financial evolution,” added Greenblatt. “With the support of our shareholders, our technology and data platform, brand and omni-channel strategy, we look to the future with confidence."
In a conference call, Greenblatt also discussed the recent New York online sports betting launch, which led the company to break its own records. It was the most successful launch for BetMGM so far: it resulted in the highest registration to deposit conversion percentage for all its state launches, and had the highest new player deposit success rate for any state launch.
“I’m delighted with how it’s gone: we’ve broken all of our records. It was the best first day of any live launch,” the executive said. “We broke records for most registrations, for most first-time depositors, for deposits, for most for bets, for handle, and what I found particularly pleasing was our technology performed flawlessly in line with our expectations, notwithstanding the volume.”
BetMGM is thus now expecting success for the new year on the back of a positive New York launch, and strong performance in FY 2021. Net revenue from operations for the period is expected to be approximately $850 million, ahead of management expectations and up nearly 5 times from prior year.
Same-state growth in net revenue from operations was up 140% from the prior year, and an FY 2021 EBITDA loss is expected to be in the range of $420 - $440 million, in line with expectations. Player values were in line with expectations, supporting a long-term total addressable market opportunity in North America of approximately $32 billion.
Continued business growth is expected to be supported by investment in additional markets and product deployments, including launches of online sportsbooks in Illinois and Louisiana in Q1. Previously mentioned launches in Puerto RIco and Ontario are expected to occur “later this year.”
“We are more confident than ever about BetMGM's future prospects,” said Bill Hornbuckle, Chief Executive Officer and President of MGM Resorts. "BetMGM has made significant progress in gaining a strong foothold in the rapidly growing U.S. sports betting and iGaming market, solidifying its position as the number two operator nationwide in 2021.”
An expansion is also expected for the company’s first-to-market Bingo product and the BetMGM Racing app into additional states. Plans to further incorporate the MGM Resorts’ revamped loyalty program, to launch on February 1, into all aspects of BetMGM’s offering are also in line.
“We are beyond excited about further integrating BetMGM with our MGM loyalty program and land-based operations to elevate the BetMGM player experience,” added Hornbuckle. “These achievements are underpinned by the structural advantages offered through MGM Resorts and Entain as well as a best-in-class team at BetMGM led by Adam.”
The current assumption of future live markets led BetMGM to anticipate reaching positive EBITDA in 2023. The strong performance, and prospects of future success, will be accompanied by approximately $450 million in investment by MGM Resorts and Entain this year, bringing the combined total investment from both parties to about $1.1 billion since launch in 2018.
“Given the long-term opportunity and shareholder value potential in winning in this market, we are very happy to support BetMGM in this investment phase of its growth journey and we are absolutely committed to providing BetMGM with what it takes to win," said Jette Nygaard-Andersen, Chief Executive Officer of Entain.