Entain and MGM Resorts International have shared a business update for BetMGM, their joint sports betting and iGaming venture for the North American market. The partners now expect their platform to turn profitable in the second half of 2023, after the operator beat its own forecasts, aided by strong gaming markets.
BetMGM finished Fiscal Year 2022 with a strong financial performance, with net revenue from operations of $1.4 billion – ahead of prior guidance of over $1.3 billion. Same-state growth in net revenue from digital operations was 51%. An EBITDA loss of approximately $440 million for the period was also posted, in line with prior guidance.
Adam Greenblatt, CEO of BetMGM, commented: “2022 was a year in which we delivered against many key strategic initiatives and achieved several company milestones, including exceeding our financial targets, launching a redesigned BetMGM mobile app and furthering our commitment to Responsible Gambling.”
The operator said the previous forecast was beaten thanks to higher gross gaming margins, resulting from product improvements; and same-state CPAs reduced by 21% year-over-year due to a data-focused marketing strategy and increased scale. Moreover, BetMGM also noted an “improved approach” to player bonusing, delivered by its data science team.
The brand ended the year with market leadership in iGaming with an approximately 30% market share, while for online sports betting it had a share of 13%. It also closed 2022 with double the online sports net revenue margin in Q4 than it had in the fourth quarter of 2021, as the operator seeks to continue to optimize its bonus environment.
The company is now live in 25 jurisdictions in North America, with access to approximately 45% of the adult US population, as well as now operating in Ontario, Canada. In addition to launching in the Canadian province, the brand also expanded its online footprint in 2022 into five other new markets: New York, Louisiana, Illinois, Kansas and Maryland. In the new year, the company has already launched in Ohio, going live on January 1 with online betting and two retail sportsbooks at MGM Northfield Park and at the Reds’ Great American Ball Park.
As for presence in the brick-and-mortar sector, BetMGM launched four new retail sportsbooks over the past year, including Nationals Park in Washington, DC; Casino del Mar in Puerto Rico; The Cosmopolitan in Las Vegas; and at State Farm Stadium, Arizona, billed as the first retail sportsbook at an NFL stadium and home of the upcoming Super Bowl.
“BetMGM is well positioned to achieve net revenue from operations of between $1.8 and $2 billion in FY 2023 and be EBITDA positive in the second half of 2023,” the company said. In support of the brand’s “stellar performance,” Entain and MGM Resorts are also committing to invest a combined additional $150 million in the new fiscal year. This brings the total combined investment to build the company in less than 5 years to approximately $1.25 billion.
BetMGM expects the first half to be investment-focused as it enters new markets in the United States, Greenblatt told Reuters, adding that activity is expected to ramp up from U.S. sporting events in the second half of 2023.
“Expected profitability in the second half of 2023 should comfort investors around the ongoing market rationality. We see profit delivery in North America as a key catalyst for the sector,” analysts at Jefferies said in a note.
Original article: https://www.yogonet.com/international/news/2023/01/27/65878-betmgm-beats-own-forecasts-at-14b-in-revenue-for-fy22-expects-profitability-by-h2-2023
