BetMGM 2023 Report In: Overall Loss, But Revenues Up

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BetMGM, the online gambling arm of giant U.S. operator MGM Resorts International in collaboration with Entain, posted its financial year 2023 report this week.

The operator posted an earnings before interest, taxes, depreciation, and amortization (EBITDA) loss of $67 million for the year.

However, revenues were up 36% year-on-year, and it hit profitability in the second half of 2023.

Overall revenues reached $1.96 billion, which is in the upper-end of its guidance range of expectations at the beginning of 2023.

BetMGM says it has a 14% total market share in the U.S. gambling market across sports betting and online casinos.

“Our performance in 2023 demonstrates our commitment to delivering on our promises,” said BetMGM CEO Adam Greenblatt in a press release. “We were able to achieve strong organic growth while executing against key strategic initiatives that lay the foundation for 2024 and beyond.”

Expenses and Income

2023 saw BetMGM expand into four new markets, which have come at some expense. That includes Ohio and Massachusetts sports betting at the start of the year. It also launched the first online sportsbook in Puerto Rico, and later in the year, opened for Kentucky sports betting.

Superstar-led advertising campaigns were heavily featured, including ads with Jamie Foxx.

The year also saw BetMGM spend on preparations to launch in the upcoming North Carolina sports betting market that is set to launch in March 2024. There it has partnered with Charlotte Motor Speedway for market access.

MGM Resorts’ 50% partner in BetMGM Entain also spent big on the business in 2023. It paid out $121 million to purchase sports data firm Angstrom Sports.

The UK-based sports data firm was tasked with upgrading BetMGM’s live in-play markets and other capabilities.

All of this is part of a strategy common to many U.S. gambling operators – spending big and making losses in the short term to acquire long-term market share.

With revenues up 36% year-on-year and market share also increasing, BetMGM seems confident this plan will work out.

Investor Confidence

Despite the strong growth for BetMGM, joint operator Entain had a rough year in 2023.

Management changes — including the departure of CEO Jette Nygaard-Andersen amid investor criticism — and a huge $739 million settlement fine from the UK taxman dragged on the company.

Amid all that, BetMGM also launched in the UK online sports betting and casino market, but without the backing of Entain.

Speculation is this state of uncertainty could lead to the long-rumored buyout of Entain’s stake in BetMGM from MGM Resorts International.

It may well be able to afford that, as its wider U.S. gambling operations, including its Nevada casinos in Las Vegas, are going gangbusters right now.

BetMGM says it expects to have a fully profitable year in 2024, rising to $500 million in EBITDA by 2026.

“The attainment of EBITDA profitability over the last three quarters of 2023 validates the effectiveness of our business model and provides the basis from which to invest further in expanding our sports offering through the integration of Angstrom and leveraging our largely untapped Las Vegas omni-channel advantages,” Greenblatt said.

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