BetMGM Aims for €500m EBITDA in 2026
Entain, the parent company of Ladbrokes betting firm, revealed its objective on Monday to achieve a core profit of $500 million by 2026 for its BetMGM U.S. sports-betting venture in partnership with MGM Resorts. This ambitious goal for 2026 follows BetMGM’s projection of aligning with the higher end of its guidance for the ongoing year.
Entain, owner of the Ladbrokes betting firm, unveiled its new goal of achieving a core profit of $500 million by 2026 for its massive BetMGM U.S. sports-betting brand.
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BetMGM Is Now Third-Largest Betting Operator in the United States
Entain, the betting company behind Ladbrokes, unveiled its ambitious target on Monday for BetMGM, its U.S. sports betting service. The goal is to attain a core profit of $500 million by 2026, a testament to the brand’s aspirations for market growth and revenue enhancement. BetMGM, a joint venture with MGM Resorts, disclosed its anticipated performance for 2023, projecting revenue between $1.80 billion and $2.00 billion, surpassing prior expectations.
Adam Greenblatt, CEO of BetMGM, highlighted the upcoming phase as an “investment period” scheduled for 2024, reinforcing the company’s trajectory towards profitability. Despite an expected negative EBITDA in 2024, BetMGM anticipates turning EBITDA-positive by 2025 after demonstrating profitability in 2023.
Entain, a prominent FTSE-100 firm headquartered in London, manages various popular online brands like partypoker and bwin. The company provided stakeholders with insights into BetMGM’s performance and financial outlook through a virtual presentation held at 1600 GMT on Monday, as reported by Reuters.
BetMGM currently operates in 28 markets across North America, and CEO Adam Greenblatt unveiled plans for the brand’s expansion into North Carolina. The company is also eyeing promising opportunities in New York, Maryland, and Illinois for future growth. Regarding market share, Greenblatt indicated BetMGM’s ascent, positioning it as the third-largest online operator in the U.S. The brand holds a substantial 17% market share, trailing only FanDuel and DraftKings.
To bolster its offerings and position in the market, Entain finalized the acquisition of U.S.-based Angstrom Sports in July. The deal, potentially valued at up to £203 million ($256.3 million), underscores Entain’s commitment to strengthening BetMGM’s foothold and expanding its portfolio.
BetMGM Owner Entain Continues Expansion into Canada and Europe
Entain, in tandem with its partnership alongside MGM Resorts, has significantly expanded its reach across Canada, the Netherlands, and various European territories through strategic acquisitions. This expansionary move underscores the company’s proactive approach in adapting to the evolving landscape of the gambling industry.
The revival of live sporting events following the pandemic-induced hiatus has notably contributed to the resurgence of the online sports betting sector. With the U.S. Supreme Court’s decision in 2018 to lift a federal ban on sports betting, gambling firms have been actively fortifying their presence in the American market.
However, despite a revenue increase of 9% reported in the third quarter, Entain has revised down its online profit margin forecast for 2023, resulting in a decline in its stock value. While the reported revenue showed growth, the pro forma basis indicated a 6% decrease, prompting the adjustment. The altered profit margin forecast reflects persistent challenges encountered by gambling entities, including stringent regulations and the economic impact of rising living costs. Entain’s recent announcement revealed a downward revision in its anticipated online core profit margin for the year, expected to be around 25%, down from the 27.1% reported in the previous year.
In pursuit of a resurgence in 2024, Entain is now focused on revitalizing growth prospects. The company anticipates a return to positive momentum in online net gaming revenue on a pro forma basis for the upcoming year. Forecasts predict a low single-digit growth in online gaming revenue, projecting the online core profit margin to range between 24% and 25%. These strategic measures indicate Entain’s proactive stance towards recalibrating its position for future growth amidst evolving market conditions.
BetMGM and Revolutionary Racing Kentucky (RRKY) Announced Partnership in August 2023
BetMGM, a prominent entity in the sports betting sphere, has finalized a significant market partnership with Revolutionary Racing Kentucky (RRKY), heralding a potential shift in the betting landscape by laying the groundwork for BetMGM’s advanced online and retail sports betting platforms to enter the eager Kentucky market. The partnership’s effectiveness is contingent on the approval of sports betting legalization in the state.
A foreseeable timeline suggested that retail sports betting would make its debut on September 7th, 2023, followed closely by the digital iteration, online betting, launching on September 28th. Adding to the anticipation, a notable development is set to unfold – an expansive 5,200 square foot BetMGM-branded sportsbook will soon find its place at Sandy’s Racing and Gaming. This state-of-the-art gaming and entertainment complex, valued at $75.0 million and owned by RRKY, will be the host site for this innovative sportsbook.
Sandy’s Racing and Gaming had hinted at this strategic venture in June this year, when they revealed they were in advanced negotiations with a potential sports betting partner. Now, with the deal inked between BetMGM and RRKY, expectations are soaring for the imminent arrival of a vibrant sports betting experience in Kentucky, both within the physical premises and across the digital platform.
The approaching launch date for sports betting operations in Kentucky stands as a testament to the collaborative efforts involving Governor Andy Beshear, the Kentucky Horse Racing Commission, and state legislators. The finalized agreement, sealed in July 2023, marks a pivotal milestone in shaping the state’s gambling landscape.
The journey leading up to this landmark moment was set in motion by the passing of House Bill 551 in April 2023, a significant legislative stride that earned Governor Beshear’s endorsement. As per the bill’s provisions, nine racetracks are eligible to offer retail sports betting, while an innovative facet allows all racetracks to engage with up to three online operators, fostering market diversity.
In terms of taxation, the bill introduces a tiered structure. Online operators face a tax rate of 14.25% on their gross gambling revenue, while retail operators are tasked with contributing 9.75% of their revenue in taxes. As the imminent go-live date for Kentucky’s sports betting draws near, the industry and stakeholders stand poised for a transformative period of change and potential opportunities.
BetMGM Arrived at Massachusetts Betting Market in February 2023
In the continually expanding landscape of sports betting within the United States, BetMGM, a leading casino and sportsbook operator, recently confirmed the imminent launch of its retail sports betting service in Massachusetts. This development follows the opening of the regulated market on Tuesday, January 31st, 2023.
The inaugural legal wager in the state was placed at the BetMGM Sportsbook & Lounge within the MGM Springfield casino on January 31st. The bet was made by Springfield’s Mayor, Domenic J. Sarno, accompanied by the esteemed Boston ice hockey legend, Ray Bourque.
BetMGM’s long-awaited debut in Massachusetts was made possible after Category 1 license-holders received approval from the Massachusetts Gaming Commission (MGC) to commence sports betting operations. The roll-out of mobile sports wagering is expected to closely follow, tentatively set for March 2023.
Patrons interested in engaging in sports betting in person can anticipate a remarkable experience at the BetMGM Sportsbook & Lounge situated at MGM Springfield. The venue boasts a 45-foot LED viewing wall and four betting windows, accompanied by 18 strategically positioned sports betting kiosks within the gaming area.
Delving into the backstory, BetMGM was one of 15 operators that submitted license applications to the Massachusetts Gaming Commission ahead of the November 21st, 2022 deadline. This date was established after the formal signing of sports betting into law in August 2022 by then-Governor Charlie Baker. Initially, a substantial 29 operators had expressed interest in applying, a number that significantly diminished over time.
Mayor Domenic J. Sarno, who also put down the very first bet, noted how lengthy the process had been:
“Yet another first for our city of Springfield (the City of Firsts) and for the Commonwealth of Massachusetts. This has been a long time coming and brings yet another chapter of innovation to enhance the operations and development at MGM Springfield. As a strong proponent of MGM Springfield and their marquee Sports Betting Lounge, which will bring more jobs and economic spin-off effect to Springfield and the region, I am honored to join with MGM Springfield President Chris Kelley, BetMGM CEO Adam Greenblatt, MGM Resorts VP Chris Gumiela, and Bruins Legend and Hall of Famer Ray Bourque, to make the first sports wager in the state – maybe I’ll pick a winner for the Super Bowl.”– Domenic J. Sarno, Mayor of Springfield, Massachusetts,Press Release
