BetMGM projects revenue at the upper end of 2023, profitability in the second half of 2023, and $500 million in EBITDA by 2026. CEO Greenblatt highlights the iGaming industry's importance while emphasizing financial gains, EBITDA growth, and app enhancements. The ability of BetMGM to finance itself in the face of fierce industry competition is a critical milestone for parent companies MGM and Entain.
The owner of online casinos and sportsbooks, BetMGM, announced on Monday that it will turn a profit in the second half of this year and that its revenue in 2023 will be between $1.8 billion and $2 billion, higher than previously anticipated.
Adam Greenblatt, the CEO, stated as much on a Monday analyst conference call. Half of BetMGM is owned by MGM, and the other half is controlled by Entain Plc, a significant UK-based gaming company. In North America, 28 jurisdictions and 38 retail sportsbooks carry the operator's products.
In a statement to analysts, Greenblatt highlighted substantial financial improvements for 2023, citing a rise in earnings before interest, taxes, depreciation, and amortization (EBITDA) of more than $300 million. After the company achieves EBITDA profitability in the second half, it can start operating on its own funds.
With $1.26 billion invested in the online gaming division, BetMGM's parents, Entain and MGM, find encouragement in the company's ability to finance itself. This amount includes the $150 million the owners gave BetMGM this year.
In addition to providing analysts with an estimate of sales for 2023 and proof of profitability for the latter part of this year, Greenblatt told analysts that BetMGM expects to generate $500 million in EBITDA in 2026.
BetMGM needs to be able to stop losing money, turn a profit, and boost EBITDA in a time when rivals like the two largest online sportsbook operators, DraftKings (NASDAQ: DKNG) and FanDuel, are reporting impressive financial results. Although DraftKings recently declared that it expects positive EBITDA in 2024, FanDuel is predicted to make money for the whole year.
CFO Gary Deutsch also highlighted BetMGM's iGaming division's expansion.
The BetMGM CFO credited the rise in the Net Gaming Revenue (NGR) margin in iGaming to the optimization of bonuses for casino players and the recruitment of recreational players in iGaming states. Noting that slot machines have higher profit margins than other games, he highlighted the fact that, in Q3, 65% of BetMGM sports bettors either played poker or at online casinos where all three products were available.
Product development is essential because the recent entry of Fanatics and ESPN Bet into the online sports betting fray has resulted in the industry's most competitive environment. Operators need to make the deposit/withdrawal process more efficient in order to retain customers. BetMGM is attempting to fulfill those requirements. BetMGM CEO Adam Greenblatt emphasized the company's ongoing efforts to enhance Same Game Parlays, simplify navigation, and enhance the app. The updated event pages now feature more markets, ensuring that users can navigate them with ease. Additionally, BetMGM provides faster bets, deposits, and withdrawals with new payment options; at the moment, more than 70% of withdrawals are made using temporary channels like Visa, Venmo, and Apple Pay.
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