BetMGM expects 2023 revenue to be at the upper end of the range, with profitability in the second half
Online casino and sports betting operator BetMGM said on Monday that its 2023 revenue would be at the high end of a previous forecast range of $1.8 billion to $2 billion, but reiterated that it would be profitable in the second half of the year.
CEO Adam Greenblatt commented on the impact during a conference call with analysts on Monday. BetMGM is half-owned by MGM, with the other 50% controlled by British gambling giant Entain Plc. The operator's products are sold in 28 jurisdictions and 38 sports betting sites in North America.
Our financial position improved significantly this year, growing earnings before interest, taxes, depreciation, and amortization (EBITDA) by more than $300 million and becoming EBITDA profitable in the second half, allowing us to act independently. Funding starts now," Greenblatt told analysts.
BetMGM's ability to raise capital is good news for parent companies Entain and MGM, which have contributed $1.26 billion to the online gaming space to date. That figure includes $150 million allocated to BetMGM by owners this year.
BetMGM targets $500 million in EBITDA by 2026
In addition to forecasting 2023 revenue and reaffirming profitability for the final six months of the year, Greenblatt told analysts that BetMGM expects 2026 EBITDA of $500 million.
At a time when competitors like DraftKings (NASDAQ: DKNG ) and FanDuel, two of the largest online sportsbooks, are reporting impressive financial results, BetMGM's ability to control losses, achieve profitability and grow EBITDA is critical . FanDuel expects to be profitable this year, while DraftKings recently said it expects to be EBITDA positive in 2024.
CFO Gary Deutsch also highlighted BetMGM's iGaming growth, an important area as internet casinos offer operators better margins and greater room for regional growth.
“While discussions around holding rates and margins often focus on the esports space, we are also seeing NGR margin expansion in the iGaming space,” said BetMGM CFO. “This is also due to bonus optimization for our casino players as well as our iGaming attracts an increase in recreational players in the state. Casual players tend to prefer slot machines to table games. Slot machines offer higher profits.”
He added that in the third quarter, 65% of BetMGM sports bettors also played poker or online casino games in jurisdictions where the company offers all three products.
BetMGM Product Progress
With Fanatics and ESPN Bet recently entering the online sports betting space, competition in the industry has never been greater, which means product development is crucial.
Additionally, operators need to improve their deposit/withdrawal processes to retain customers. BetMGM wants to check those boxes.
"We continue to invest in making our apps more intuitive and discoverable, including redesigning the event page that now covers more markets while highlighting the most popular logical content groups to enable navigation and same-game parlay creation Getting even easier, he said of Glenblatt. “We’ve also added new payment methods to make it easier and faster for users to deposit, bet or withdraw winnings, and more than 70% of our withdrawals are Through express channels such as Visa, Venmo and Apple Pay. "
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Source: www.casino.org
