BetMGM has raised its 2022 revenue forecast to $1.3 billion for 2022 after reporting a surge in demand over the past few months.
The operator previously expected to earn $1 billion this year, but it increased the outlook in a performance update on Wednesday.
BetMGM is the number two operator for online gambling in the United States, behind only FanDuel. It is the market leader for online casino gaming – known as iGaming – but it trails FanDuel and DraftKings in the online sports betting arena.
BetMGM Could Become Profitable in 2023
Despite the revenue surge, BetMGM still expects to incur a loss this year. It needs to invest heavily in promotional credits to maintain and grow its market share, while it must also invest in new licenses as it expands across the country.
During the investors’ call, chief executive Adam Greenblatt was asked when he expects BetMGM to achieve profitability. He believes it is possible in 2023.
“Let’s not lose sight of our reality,” Greenblatt said. “We are not selling toothpaste in a very mature market in a price-stable environment. That’s not this business, right? The market is still in relatively exciting, exciting stages, with lots of new states becoming addressable at different uncertainties.
“So, while we cannot commit as we stand here today to profitability for the full year 2023, at this stage, we expect to enjoy many months of positive EBITDA as the year progresses.”
He said that EBITDA – earnings before interest, tax, depreciation, and amortization – was positive in 2021 in New Jersey, while Michigan was positive from midway through 2021. BetMGM offers online casino gaming and sports betting in both of those states. It added that it expects Arizona – where it only has sports betting – to become EBITDA positive this year.
“The highly talented team at BetMGM is executing our plan with purpose, passion, and discipline, and our results speak for themselves,” said Greenblatt. “After only 3 years into our journey, we have cemented the credibility of BetMGM’s leadership ambition in sports betting and iGaming in the US.
“2022 is a critical year, where the leading national operators will reach critical mass, paving the way for the next phase of the sector’s financial evolution.”
Partners to Invest $450M in BetMGM
BetMGM is a joint venture between MGM Resorts International – the owner of properties such as Bellagio, Borgata, and MGM Grand – and UK company Entain.
The partners have already poured $650 million into the JV, and they plan to invest another $450 million in 2022, bringing the total spend to $1.1 billion. Shares in both companies ticked up slightly after the trading update was revealed.
The JV was threatened last year when DraftKings mounted an ambitious $22.4 billion takeover bid for Entain. That would have proved detrimental to MGM Resorts, but it ultimately collapsed, leaving Entain and MGM Resorts to maintain their partnership.
They plan to launch online sportsbooks in Illinois and Louisiana in the next couple of months, along with online casino gaming in Ontario and sports betting in Puerto Rico later in 2022. BetMGM also aims to expand its online racebook into more states this year.
BetMGM’s net revenue is expected to be roughly $850 million in 2021, up nearly five times from 2020.