SBC News MGM Resorts targets earnings swing of $250m for BetMGM in 2025

MGM Resorts targets earnings swing of $250m for BetMGM in 2025

MGM Resorts has provided a strategic update on the financial performance of the BetMGM (US) joint venture partnership with Entain Plc, in which the partners mark 2024 as “a year of investment to strengthen its online offering.”

The update underscored the view that the BetMGM joint venture is progressing towards “break-even” despite reporting a full-year EBITDA loss of $244 million, with losses of $121 million and $123 million recorded in H2 and H1, respectively.

Of consequence, BetMGM accounts recorded a “negative impact of $50 million” from customer-friendly results during the December period, a factor that has affected all US sportsbooks.

Headline results saw BetMGM achieve a net revenue of $2.1 billion, up 7% on FY2023 comparatives of $1.9 billion. Accounts detailed that in H2, BetMGM benefited from accelerated momentum, as net revenues increased by 19%, generating an income of $1.1 billion.

A breakdown of segments detailed that online iGaming (online casino) continues to be the primary source of revenue for BetMGM, contributing a net income of $1.47 billion (71%) and generating an EBITDA contribution of $424 million.

For iGaming, the update detailed that BetMGM had achieved its ‘market-leading objectives’, which saw the segment report record average monthly actives of +55% during Q4 trading.

Focus shifts to the continued development of BetMGM’s online sportsbook offering, which generated FY2024 net revenues of $554 million (+17%) on an increased handle (total wagering) of $13 billion, reflecting a product hold of circa 8.6%.

Accounts provided no detail on sportsbook earnings contribution but cited that performance had improved due to greater market availability, richer pricing, and unique features improving parlay betting and engagement, as well as improved cross-sell opportunities with the iGaming segment.

For the sportsbook segment, joint venture partners will continue to prioritise optimising the promotional strategy with enhanced segmentation and predictive modelling, as well as unlocking unique omnichannel opportunities.

MGM Resorts stated that it was confident in BetMGM’s acceleration in 2025, in which it expects full-year EBITDA, with guidance reflecting a $250 million earnings swing and revenue standing at $2.4 billion to $2.5 billion. The guidance is issued with the caveat that “online sports to be contribution positive for the full year 2025”.

SBC News MGM Resorts targets earnings swing of $250m for BetMGM in 2025
Adam Greenblatt: BetMGM

Adam Greenblatt, Chief Executive Officer of BetMGM, commented: “2024 was a year of investment and rebuilding of momentum for BetMGM. Our successful strategic refinement saw BetMGM exit the year with encouraging run rates across our key metrics, and Q4 EBITDA trended towards breakeven on a normalised basis.”

“With BetMGM’s renewed acceleration across both iGaming and online sports, we expect to achieve positive EBITDA in 2025, and our scaled podium position in the world’s largest gaming market underpins our confidence in our pathway to $500 million EBITDA in the coming years.”

JV-Partner Entain, communicated to investors in January, confidence of achieving its FY2024 upgraded guidance of a group-wide EBITDA at the top range of £1,040m-£1,090m. Entain’s growth is led by the recovery of its online brands in the home markets or the UK-&-Ireland and continued expansion in Eastern and Central Europe.

Led by new CEO Gavin Isaacs, Entain is committed to delivering improvements to the BetMGM sportsbook product, driven by Angstrom upgrades across all major US professional sports leagues, enhancing parlay efficiencies and improving the hold of GGR on sports wagering.

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