BetMGM might be a top three sports betting and iGaming operator, but the sportsbook product is still not where it needs to be, its partners sare saying.
Both Entain and MGM feel they will need another year of investment, at least, with the focus on “building the momentum,” Entain’s Interim CEO Stella David said during the company’s recent first-quarter trading update.
“We are aligned with MGM that 2024 is a year of investment for BetMGM, investing in marketing and building momentum behind our improved player experience with more US tailored products and new game launches,” David said. “For example, the tangible capabilities of Angstrom are just starting to reach players now and our differentiated Parlay and Parlay+ offerings are live for MLB and will follow shortly for NBA and later this year for NFL.”
Just how much both companies will invest after $150 million was jointly invested in 2023 has not been announced. MGM reports its first-quarter earnings next Wednesday.
2024 investment not always the plan
It did not sound like MGM CEO Bill Hornbuckle expected more investments into BetMGM beyond 2023 when asked last February.
“We all have to be rational players,” he said. “There is growth left. … But no, there’s no large-scale capital. That business should begin to mend and take care of itself.”
Hornbuckle mentioned in August that the product still is “not where we want it to be.” David blamed that on Entain not reacting quickly enough to provide BetMGM with more US-tailored products.
As long as BetMGM remains on track with its plan, that $500 million in EBITDA target is still possible in 2026, CFO and Deputy CEO Rob Wood said.
BetMGM bolstered by iGaming momentum
While the sportsbook offering still needs some improvement, BetMGM’s iGaming product will help drive revenue, Wood said.
March was the best month ever for iGaming at BetMGM, he said, with five of the last six weeks ranking in the top seven iGaming weeks of all-time.
Net revenue would have been up high single digits in the first quarter without the drag on sports betting margin. Increased marketing investment led to strong growth in first-time depositors and actives, Wood said.
The gap between gaming and sports betting was about 11 percentage points last year, but that is shortening. It was a 4 percentage point gap in the first quarter, he added.
Parlay mix increasing on MLB
Wood noted that the MLB products are now “fully Angstromised,” meaning a deeper parlay offering than before.
There is already a positive change in terms of parlay mix and in-play products, he added.
“So, it’s early days in terms of seeing the benefit of Angstrom Markets, but we can already see progress in baseball and therefore with NBA being added to Angstrom Markets,” Wood said. “But more importantly, NFL launch in September, we would logically expect the win margin to progress through the year.”
