BetMGM, a billion dollar venture with a vision

Lea Hogg July 31, 2024

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BetMGM, a billion dollar venture with a vision

Entain saw its US sports betting and iGaming operator, BetMGM, cross the $1 billion revenue mark in the first half of 2024. Despite this milestone, the company reported a loss due to substantial investments made during this period.

On 30 July, Entain’s shares were valued at 564.00p, marking a decrease of 5.46 percent or 32.60p.

BetMGM’s loss of $123 million on an EBITDA basis in the first half of 2024 was in line with Entain’s projections. The company anticipated 2024 to be a year of investment, aimed at enhancing customer acquisition and player experience initiatives. A similar financial outcome is expected for the second half of the year.

Despite the loss, BetMGM’s net revenues showed a promising increase. The company reported a 6 percent rise in net revenues from operations, reaching $1.0 billion. This growth rate accelerated from 3% in the first quarter to 9 percent in the second quarter, bolstered by double-digit growth in both online sports betting and iGaming monthly active users.

BetMGM also expanded its geographic footprint in the first half of 2024, launching digital sports betting in North Carolina in March and extending its reach to the District of Columbia in July. As a result, the company now commands a 13 percent market share of gross gaming revenue across the US and Ontario in the sports betting and iGaming sectors.

Adam Greenblatt, Chief Executive of BetMGM, commented on the company’s performance, “The first half of this year has been very important in laying the groundwork for BetMGM’s future. We are encouraged to see this strategy delivering accelerating momentum. We have exceeded our goals for both acquisition and retention, which should lead to higher year-over-year revenue growth for the second half of this year into 2025.”

As BetMGM continues to invest and expand, the future looks promising.

Entain’s Q1 performance

Entain, one of the world’s largest sports betting and gaming groups, has been making significant strides in its financial performance

Here are some key H1 highlights:

Entain reported a Q1 2024 performance that was in line with their expectations. The company saw a 6 percent increase in Total Group Net Gaming Revenue (NGR), including a 50 percent share of BetMGM. However, on a proforma basis, the Group’s proforma Online NGR (excluding US) saw a decrease of 2 percent. This was supported by an 11 percent proforma growth in active customers..

In the UK and Ireland, NGR was down by 7 percent (Online -9 percent, Retail -6 percent) as the company continued to experience the effects of regulatory implementation.
International NGR was up by 8 percent, but down by 2 percent on a proforma basis (Online -1 percent, Retail -8 percent). Despite strong volume growth, NGR in Italy was impacted by customer-friendly sports margins.
Entain is fully engaged in delivering operational improvements, product enhancements, as well as greater organisational agility and efficiency. With an enhanced player experience and exciting pipeline ahead, BetMGM is well positioned to invest for future growth.
However, it’s important to note that Entain warned of a hit to its 2024 earnings from regulatory measures, expecting its core profit for 2024 to reduce by about 40 million pounds..

Fitch Ratings affirmed Entain at ‘BB’ with a stable outlook, noting that Entain’s expected EBITDAR margin at about 19 percent-20 percent over the next four years is solid.