BetMGM App Achieves Profitability as Sales Increase
BetMGM, an app for online sports betting, achieved profitability in the most recent quarter, surpassing expectations by reaching this milestone earlier than anticipated.
The company, a joint venture between MGM Resorts International and Entain Plc, said on Wednesday that it had achieved a positive result for the second quarter. The company previously estimated that it would achieve the goal in the second half of the year.
Shares in Entain rose 4% in London, while MGM Resorts gained 1.1% in New York.
BetMGM said optimization of player bonuses contributed to its strong financial performance, suggesting the turnaround was partly down to controlling costs. First half revenue increased by 25% in states where BetMGM already operated.
The company continues to achieve revenue of $1.8 billion to $2 billion in 2023, and expects to be self-sustaining in the second half of the year, with no additional equity investments expected from owners.
Since 2018, when the U.S. Supreme Court overturned a federal ban on sports betting, gambling companies have sought to attract online gamblers with expensive advertising campaigns and free bets. This has led to large losses, and now investors are putting pressure on the companies to become profitable.
Founded in 2018, BetMGM has an 11 percent share of online betting, the company said. It follows the industry’s two biggest players: DraftKings Inc. and FanDuel, a division of Flutter Entertainment Plc.
Recently, there has been speculation that MGM is looking to merge with Entain again. Entain rejected the proposal in 2021. Citigroup analyst Monique Pollard wrote on July 24 that another offer was “hard to rule out.”
