Entain shares surge after BetMGM upgrades forecasts and delivers first quarterly profit

Entain shares climbed sharply on Monday after the sports betting and gaming company raised its full-year guidance for BetMGM, its joint venture in the United States with MGM Resorts International.

The stock rose as much as 14% to 857.80 pence in London, marking its strongest intraday performance since September 2021 and bringing its one-year gain to roughly 30%.

BetMGM, which was formed in 2018 following the U.S. Supreme Court decision allowing states to legalize sports betting, now expects net revenue for 2025 to reach at least $2.6 billion. That compares with the prior forecast range of $2.4 billion to $2.5 billion. 

The company also projected earnings before interest, taxes, depreciation, and amortization (EBITDA) of at least $100 million, a shift from its previous indication that the company would be EBITDA-positive without a specific target.

The company attributed the stronger performance to sustained growth in online gambling and sports betting, particularly in the first and second quarters. BetMGM reported EBITDA of $22 million in the first three months of the year, its first-ever quarterly profit. Entain provides the technology platform powering BetMGM, while MGM Resorts manages customer-facing operations.

CEO Stella David

CEO Stella David, who took over permanently in April following the February departure of Gavin Isaacs, has made the U.S. and Brazil central to her strategy for stabilizing and growing the business. Brazil legalized sports betting only recently, and Entain views the country as a major opportunity for expansion.

Barclays analyst Pravin Gondhale described the performance as evidence that Entain’s current strategy is on the right track. “This is a good sign for them… the strategy is working,” he said.

David’s tenure follows a turbulent period for Entain marked by regulatory probes and leadership turnover. In the UK, the company paid £17 million ($22.96 million) in 2022 after regulators cited compliance failures. The following year, it reached a £615 million ($830.46 million) settlement with British prosecutors related to historic bribery allegations in its former Turkish operations. 

In Australia, the company is facing legal proceedings from the financial crimes regulator over alleged breaches of anti-money laundering laws. Entain has stated it is taking the allegations seriously and has begun improving its compliance systems.

These controversies, combined with governance issues and executive changes, had left Entain vulnerable to external pressures. In 2021, U.S. sports betting giant DraftKings made a £16.2 billion ($21.88 million) bid for the company before walking away. 

Meanwhile, activist shareholders, including Eminence Capital and Sachem Head Capital Management, have pushed for changes. Analysts at Shore Capital noted that Entain’s share price had not yet fully reflected the improving operational trends.