BetMGM has exceeded its commercial targets for 2022, according to a joint-statement by venture partners Entain and MGM Resorts, as the US sportsbook achieves full year revenues of $1.44bn.
The headline figure is above guidance issued 12 months ago, in which JV partners set a target of $1.3bn, as the firm’s revenue growth objectives are more than on track.
However, this is not to say it has been entirely smooth sailing during the course of 2022. The JV recorded an EBITDA loss of around $440m, in contrast to its goal set last year of achieving an EBITDA positive month by 2023, having been conducting business since 2018.
Despite setbacks, Entain asserts FY22 EBITDA falls in line with established guidance and that the joint venture’s digital operations have been taking strides, recording same-state revenue growth of 51%.
Looking ahead, the group expects net revenue of between $1.8bn and $2bn by the end of 2023, as leadership believes that BetMGM can achieve its EBITDA positive target by the end of H1 trading.
Venture commitments will be supported by a further investment from both Entain and MGM of $150m over the next 12 months.
Adam Greenblatt, CEO of BetMGM, said: “The talented team at BetMGM continues to execute our plan with purpose, passion, and discipline. 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.”
Entain attributed the rise in revenue to higher gross gaming margins due to improvements made to products and customer experience, a better approach to bonusing and a reduction in costs per acquisition of 21% year-on-year.
Although the $400m EBITDA loss somewhat dampens BetMGM’s FY22 outlook, much of the costs can be attributed to the costs of expansion and market access, as the brand secured entry into Kansas in Q3 2022.
Post Q3, Entain and MGM were able to line up costly market entries to New York, Louisiana, Illinois, Ontario, Kansas, and Maryland, whilst four new retail sportsbooks were opened across the mainland US and Puerto Rico.
Reflecting on 2022, Entain explained that BetMGM has secured market share of around 30% across all gambling verticals, with a 13% share in online sports betting and 20% share in markets where the brand went live on day one.
New year developments have seen BetMGM launch successfully in Ohio, whilst preparations are underway to commence operations in Massachusetts after a licence was secured.
Greenblatt concluded: “With continued and unwavering support from our shareholders, we look to 2023 confident in achieving further key milestones, including $1.8 to $2bn in net revenue from operations and being EBITDA positive in the Second Half of 2023.”
The results also come within the context of renewed interest from MGM in acquiring its FTSE partner, according to the Daily Mail’s This is Money business news site.
MGM had previously made a £8.1bn bid early last year – this was rejected by Entain and MGM later abandoned the proposal – but reports indicate that the firm may reconsider a buyout depending on the outcome of the 2005 Gambling Act review.