BetMGM started 2023 in strong form, putting the internet casino and online sportsbook operator on pace to meet its previously stated goal of turning profitable in the back half of this year.
In its first-quarter financial update, Entain Plc (OTC: GMVHY), which owns 50% of BetMGM, said the online gaming entity notched net gaming revenue (NGR) of $470 million in the first three months of this year. That’s good for a 76% year-over-year increase. MGM Resorts International (NYSE: MGM) owns the other half of BetMGM.
Consistent iGaming leadership with 28% market share and established amongst leading operators with 17% share in sports-betting and iGaming markets where BetMGM operates,” according to a statement issued by Entain.
The Ladbrokes owner added that the Super Bowl and the NCAA tournament were among the events that contributed to a strong run of customer acquisition for BetMGM in the January through March period.
BetMGM Profitability Appears Imminent
Earlier this year, BetMGM forecasted 2023 net revenue from operations of $1.8 billion to $2 billion. It also noted profitability could arrive in the back half of the year.
Entain reiterated those views, noting, “Player economics continue to support state cohort profitability, and BetMGM remains on track to deliver positive EBITDA in the second half of 2023.”
Although Entain merely reiterated previous BetMGM guidance, it’s still positive and well-timed because many rivals are also flirting with profitability. FanDuel will likely accomplish the feat this year, making it the measuring stick for the US sports wagering industry.
Cost management and reduced marketing spending could propel Barstool Sportsbook and Caesars Sportsbook to profitability at some point in 2023. Additionally, DraftKings — BetMGM’s closest competitor in terms of market share — could turn positive based on earnings before interest, taxes, depreciation, and amortization (EBITDA) later this year.
BetMGM Success Could Stir Takeover Talk
The more successful BetMGM is, the more likely some market participants are to speculate that MGM will renew takeover interest in Entain, something executives from the casino operator said isn’t going to happen.
There’s also been chatter that MGM could offer Entain its 50% interest in BetMGM, which would be more cost-effective than an outright acquisition. Neither side has recently made comments regarding such a transaction.
For its part, Entain doesn’t look like a target. It’s been on an acquisition binge of its own, and it seems like more of that will come.
“Looking ahead, we remain confident that our customer focus, diversification, and proven ability to grow organically and through M&A will enable us to demonstrate further progress against our strategy,” said CEO Jette Nygaard-Andersen in the statement.
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