BetMGM is the second US sports betting app to turn a profit.
Parent companies MGM Resorts and Entain announced the milestone Wednesday in their financial update for the first half of 2023, projecting that BetMGM will become “self-sustaining” in the second half of the year.
BetMGM reported positive EBITDA for Q2, joining FanDuel as the only other online sports betting company to achieve a quarterly profit. Both companies, along with their competition, are still targeting longer-term profitability.
As of noon ET Wednesday, MGM stock shares were up around 1%. Entain was up nearly 5% on the London Stock Exchange, trading at its highest price since May.
CEO: sustainability focus going forward
CEO Adam Greenblatt addressed longer-term profitability in Wednesday’s press release:
“Our financial guidance for the year remains on track – we expect to deliver $1.8 to $2.0 billion in full year revenue, as well as to be EBITDA positive in the second half of 2023. In fact, we have already achieved positive EBITDA for the full second quarter of this year. Our focus remains on building a sustainable, scalable and returns focused business with leading products that our players enjoy responsibly.”
That aligns with Greenblatt’s previous comments and suggests expected profit over three straight quarters into NFL betting season. In Q1, BetMGM launched in Ohio and Massachusetts, two densely populated and competitive markets where it had to spend. Kentucky is the only state set to launch sports betting in the second half of this year.
MGM and Entain have invested more than $1 billion into their joint digital gaming venture, which reported $440 million in EBITDA losses last year. There is another $150 million committed for this year already, split between parent companies.
On pace for revenue target
BetMGM’s net revenue rose slightly quarter-to-quarter.
It reported $944 million in net revenue for H1, based on previous guidance, a $4 million jump from Q1 to Q2.
More than halfway to its $1.8 billion to $2 billion end-of-year target, BetMGM’s revenue is in a good place heading into its busiest months of the year.
BetMGM market share slips
In a less positive place is BetMGM’s share of the market.
BetMGM reported an 11% share of the North American online sports betting market in Q2, down from its previous 13%. Its hold on iGaming, where it had been the market share leader, fell as well, to 27% from 30% quarter-to-quarter.
Its market share in states both forms of digital gaming rose to 18% from 17%. Rollout of a single wallet for iGaming and sports betting transactions is on track for the end of the year, according to the release.
Key states trending better
The brand has been faring better in a few key sports betting states since the end of the reporting period, increasing its share of Michigan‘s market in June and Illinois in May. It also ranks third in Massachusetts handle since the market launched in March.
The release adds that Entain’s recently acquired Angstrom Sports will help supplement BetMGM’s parlay and in-play products heading into football season. The nine-figure product investment is in line with how competitors like Hard Rock have prepped for the most important time of the year.