Entain CEO: Taking BetMGM Public In Play After Hitting Profitability


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BetMGM

An initial public offering to take BetMGM public is one of the options on the table if its sports betting joint venture breaks even next year.

That is according to Entain CEO Jette Nygaard-Andersen, who tackled the question on the company’s third-quarter trading update call Thursday.

Companies listed in London are not required to give detailed reports in the first and third quarters so the four-page update was short on specifics. Entain called out BetMGM‘s successful start to NFL betting and $400 million in US quarterly net gaming revenue, though.

BetMGM IPO comment

Entain should reach sustainable positive EBITDA next year based on current expectations of state launches, the company said. That led one analyst to reference back to the second-quarter call when Nygaard-Andersen said it would be time to look at how to get value out of BetMGM once it was profitable.

Do not expect a quick decision if that profitability does arrive, though, she cautioned:

“So you know there is no real hurry for us or our partners to do further – to crystallize the value here. And then when we reach that point, that could open up further opportunities for us, so whether it’s through dividend, or whether we at some point could look at an IPO.

“But I just want to reinforce, again, that right now our focus is on building the best business here, supporting BetMGM, we do that 24/7, every single day. … So you shouldn’t expect us to have a plan for the minute that we hit profitability next year, but it is certainly a main milestone for us.”

NFL season started ‘strongly’

Nygaard-Andersen spoke glowingly about the start of the NFL season:

“The NFL season has started strongly, volumes have been fantastic with strong performance across all metrics, actives, handle, bet count, reactivations, margins – all really positive.”

The only concrete number for the US is that $400 million in net gaming revenue (NGR.) That represents 90% growth over last year’s third quarter and 50% on a same-store basis. BetMGM remains on track for more than $1.3 billion in NGR this year.

The promotional environment had its usual increase in offers but the market is “relatively rational and in-line with our expectations,” she said.

California sports betting polling is ‘disappointing’

Nygaard-Andersen tried to spin a positive narrative on California sports betting, which does not look like it will pass in November:

“And, while that is, you know, disappointing in itself, we still have another go at it potentially in two years’ time. … over time, we do expect legislation in sports betting in California to happen. I think it’s difficult to imagine that a state like California with more than 21 major professional sports franchises and a population that loves their teams will not, at some point, legislate around sports betting.

“But, if it doesn’t happen in November this year, then we remain excited about it, and we’ll look at it again next year.”

A delayed launch in California is at least good for BetMGM’s profitability, she said. All operators likely would have invested significantly if the market opened.

BetMGM chipped in $25 million to the Prop 27 push, which has $169.3 million in contributions.

Single BetMGM app, wallet by year end

BetMGM began the rollout of a refreshed sportsbook app with a revamped user experience during the quarter. A single app and wallet will launch by the end of the year.

The brand is the “clear number two” in its markets, Nygaard-Andersen said. Market share is 23%, which increases to 25% if New York is stripped out.

BetMGM leads the way with a 31% iGaming market share, and made gains in Pennsylvania and New Jersey.

‘Delighted’ by Kansas

The most recent state launch was Kansas, where BetMGM is “doing great,” Nygaard-Andersen said.

“… we are delighted with the customer activity and engagement levels we have seen so far,” she said.

Entain was “really pleased” with the conversion of customers that registered before Kansas sports betting went live into registered players.



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