BetMGM has adjusted its expectations, no longer anticipating to reach its $500 million annual EBITDA target next year. Increased competition from both regulated and unregulated prediction markets is a major factor in this shift. CEO Adam Greenblatt acknowledged the challenge Tuesday, stating the company now expects to hit the lower end of its previously projected 2026 guidance.
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Prediction Markets Impact Financial Outlook
The joint venture between MGM Resorts and Entain is feeling the squeeze from a crowded market. And prediction markets, in particular, are exerting pressure on both their online casino and sports betting operations. “It’s tough out there,” Greenblatt admitted. He highlighted prediction markets as a key challenge, exacerbated by broader economic issues like high gas prices and limited consumer discretionary spending. The difficult market is causing new competitors, such as Hard Rock Bet in Michigan and Ontario, to raise the cost of acquiring new customers by roughly 15% compared to last year. Greenblatt implied these entrants compete in ways “less commercially rational,” aiming to make a mark in well-established markets. Despite this, he praised BetMGM’s ability to maintain momentum and customer loyalty.
Soccer’s Growing Influence Post-World Cup
BetMGM is also riding high on its World Cup success. The tournament tripled BetMGM’s handle from the previous year, surpassing even major league events like MLB and NBA playoffs. Greenblatt sees soccer as increasingly major for the company, noting its potential to rival traditional American sports in engagement. This comes despite some skepticism from within—his CFO, Gary Deutsch, humorously reminded him not to count out the NHL. Greenblatt believes soccer’s growing popularity could be transformative. “Soccer is a real sports category and growing,” he stated, forecasting its role as a key feeder for the betting sector.
Strategic Growth in North America
BetMGM launched in Alberta on July 13, using MGM Resorts’ brand power. Nearly 10% of the new Alberta sign-ups already had ties with MGM Resorts, underscoring the company’s omni-channel strategy. While it’s early days, Greenblatt remains optimistic about potential growth in the Canadian market this year. In Nevada, BetMGM continues to capitalize on MGM’s dominant presence. Online handling surged by 10% in the first half. Yet, Greenblatt sees more potential, particularly in the Nevada locals market—a segment they’ve only begun to tap into. “Making a concerted effort into the locals market” is now a focus, he revealed, identifying it as an untapped opportunity.
Retail Division Faces Setbacks
BetMGM’s retail business isn’t often spotlighted, but a Q2 revenue shortfall—resulting from several high-stakes wins—caught attention. And with no revenue from retail sports betting this quarter, compared to $16 million last year, it’s clear the segment is shifting towards VIP clientele while typical bettors gravitate online. Greenblatt remains optimistic overall, though. The brand is strong, and its omni-channel approach is yielding dividends. However, whether these strategic adjustments will propel BetMGM back on track for its EBITDA target remains to be seen. And the next milestone? Tracking further growth in Alberta and facing upcoming competitive pressures. BetMGM’s next financial update should shed more light on these fronts, likely by their end-of-year report.
Marcus Chen brings a quantitative approach to poker strategy and sports betting analysis. With a background in data analytics and over eight years covering professional poker circuits, his articles combine statistical insights with practical advice for serious players looking to sharpen their edge at the table.
