Acquisitions, BetMGM Investment Part of Entain Growth Plans

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BetMGM parent Entain reported a solid year of growth, with plans to spend on acquisitions in 2022.

Entain’s overall revenue in the fiscal year 2021 was up 7% year-over-year from $4.85 billion to $5.19 billion, according to a Thursday presentation. Online revenue jumped 12%, $3.67 billion to $4.10 billion, while retail revenue dropped 8% from $1.14 billion to $1.05 billion.

EBITDA grew 5% year-over-year, from $1.13 billion to $1.18 billion.

“Our full-year results demonstrate yet again that Entain is a business with growth built into its business model,” CEO Jette Nygaard-Andersen said.

That growth includes continued investment in BetMGM, its joint venture with MGM Resorts, and potential acquisitions.

Entain acquisitions coming?

The company is saving money for potential acquisitions later this year, according to CFO Rob Wood.

“M&A is a key part of our business model,” Wood said. “We continue to have a full pipeline of opportunities which vary in size, region, product or capability and we look for transactions that can support our growth.”

The presentation outlined a “disciplined ROI approach” to “value-enhancing acquisitions,” including:

Entain will continue to increase its holdings as it attracts potential suitors of its own. It has seen bids from MGM Resorts and DraftKings in the past year or so.

That aggressive acquisition talk comes as US sports betting competitors start to pull back, including CaesarsWynnBet and TwinSpires. In terms of US marketing spending, Nygaard-Andersen said BetMGM “baked” seasonal upticks into the company’s US plan as a profitable operation.

Yahoo rumors no big deal

Regarding a CNBC report, Yahoo owner Apollo Global is looking for a sportsbook partner, Nygaard-Andersen called it old news.

BetMGM has an affiliate deal with Yahoo.

“Yahoo is a value partner for us. It’s an affiliate partner,” she said. “Yahoo is one of the routes that we have to market as part of the affiliate partner and we continue to work with them there.”

PointsBet was the named operator in the recent report.

Entain touts significant BetMGM growth

Echoing earlier reports from BetMGM and MGM Resorts, Entain executives said BetMGM’s revenue grew to $850 million. Same state revenues were up approximately 140%.

“BetMGM in the US has delivered a five times increase in net gaming revenue versus the previous year, and is ready to challenge for the number one position across the markets in which it operates,” Nygaard-Andersen said.

BetMGM is live in 21 markets and controlled 23% of the fourth-quarter iGaming and sports betting market share in those jurisdictions. The operator will likely launch in Illinois and Ontario in the next two months.

Executives raised BetMGM revenue projections for this year to $1.3 billion in 2022 with profits expected by 2023.

Company looks toward Canada

The executives were optimistic about the potential of online gaming in Canada.

Entain recently acquired gray-market operator Sports Interaction and operates the bwin and Party brands in Canada. Nygaard-Andersen said Entain will apply for an Ontario license with Party.

That existing customer base will help limit necessary investment in Ontario, Wood said.

“There will inevitably be some investment but I don’t expect the J-curve to be as deep as it is in a new US state,” he said.