Entain's BetMGM venture to blast past $1bn net revenue in 2022

The FTSE 100 gambling giant said BetMGM was achieving market share in line with its long-term target of 20% to 25% in the United States sports betting and iGaming markets.

It was now the number two operator for sports betting and iGaming across the markets in which it operates, with a 24% market share for the three months to November.

BetMGM remained the market leader in iGaming, Entertain said, with a 30% market share for the three months to November in the markets in which it operates.

The venture was live in 19 jurisdictions, including four in iGaming and 19 in sports betting, with the operation expected to reach about 40% of the US adult population, with two further jurisdiction launches as well as launches in Canada and Puerto Rico set down for the coming months.

Looking at 2021, Entain said BetMGM’s net revenue from operations was expected to be about $850m, ahead of management expectations and up nearly five times from the prior year.

Same-state growth in net revenue from operations was pencilled in to be 140% from the previous year, while the venture’s 2021 EBITDA loss was expected to be in the range of $420m to $440m, in line with expectations.

The cost per acquisition was said to be in line with management forecasts, which Entain said reaffirmed its expectation to achieve a long-term acquisition cost of $250.

Player values, meanwhile, were in line with expectations, supporting a long-term total addressable market opportunity in North America of around $32bn.

BetMGM was expecting 2022 net revenue from operations to be over $1.3bn, with its continued growth supported by investment in additional markets and product deployments.

Entain said the venture was expecting to launch online sportsbooks in Illinois and Louisiana in the first quarter, as well as retail sportsbooks in the US territory of Puerto Rico and both online sportsbook and iGaming in the Canadian province of Ontario later in the year.

It was also expanding its first-to-market bingo product and the BetMGM Racing app into additional states, while continuing to enhance its products in existing markets.

The company said it would continue to employ its returns-driven marketing strategy, while further incorporating the MGM Resorts loyalty programme into “all aspects” of its offering, while maintaining its “market-leading” customer service and “prioritising responsible gaming” across all facets of the business.

BetMGM was expecting to reach positive EBITDA in 2023, based on its current assumption of future live markets.

The company said it had achieved positive contributions in several states, some within one year of launch.

To underpin its “continuing success”, the investment from venture partners Entain and MGM Resorts was expected to be around $450m in 2022, which would bring the combined total investment from the two firms to $1.1bn since launch in 2018.

“The highly talented team at BetMGM is executing our plan with purpose, passion and discipline, and our results speak for themselves,” said BetMGM chief executive officer Adam Greenblatt.

“After only three years into our journey, we have cemented the credibility of BetMGM's leadership ambition in sports betting and iGaming in the US.

“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.”

Greenblatt said that, with the support of its parent companies, its technology and data platform, brand and omni-channel strategy, it was looking to the future with confidence.

Jette Nygaard-Andersen, CEO of Entain, added that BetMGM was built on the company’s “best-in-class” technology and capabilities, alongside the “iconic brand and assets” of MGM Resorts.

“Its fantastic success so far demonstrates that BetMGM has really captured the excitement of customers across the states where it operates.

“BetMGM continues to outpace the market as a result of its unique assets and go to market approach, broad and highly engaging range of in-house products and digital marketing capabilities.

“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.”

At 1438 GMT, shares in Entain were up 1.29% at 1,729p, while MGM Resorts was down 0.01% at $43.83 at 0953 EST in New York.