BetMGM targets profit from 2023 as 2021 losses look likely to reach $440m

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BetMGM expects to turn a profit in the US by 2023 but is primed to report an EBITDA loss of around $440m for full-year 2021.

Providing a full-year trading update to investors, BetMGM said net revenue for 2021 would reach approximately $850m, ahead of management expectations and a near fivefold increase on the previous year.

Same-state growth, excluding new state launches during the year, increased by 140% on 2020.

According to management, the brand captured an overall market share of 24% for the three months to November 2021 and is the number two operator in the US for both sports betting and iGaming across the states in which it operates, while BetMGM remains the market leader in pure iGaming, with a 30% market share over the same period.

US operators are targeting long-term profitability in the US, but not before racking up huge losses in the near term on marketing spend and acquiring customers.

Investors in public US gambling companies – many of which were swept along by an initial wave of excitement following the repeal of PASPA in 2018 – are now asking the same two questions. When will these businesses start to make a profit and when will shareholders get paid out as a result?

In the case of BetMGM, the business expects to become EBITDA positive next year (2023), despite estimating a loss of between $420m-$440m for the year just gone (2021).

Cost per acquisition (CPA) was in line with management’s forecast for 2021, which reaffirms BetMGM’s expectation of achieving a long-term acquisition cost of $250 in the US.

Player values for 2021 were also in line with expectations, which BetMGM said supports its previously communicated long-term total addressable market (TAM) estimation in North America of approximately $32bn.

BetMGM is also expecting to break the $1bn revenue barrier for the current year (2022) after issuing full-year guidance of around $1.3bn.

BetMGM is currently live in 19 jurisdictions overall. It offers sports betting in all 19 and has launched iGaming in four of those states to date; New Jersey, Pennsylvania, Michigan and West Virginia.

With regards to the 2022 roadmap, the firm expects to reach approximately 40% of the US adult population with two further jurisdiction launches into Illinois and Louisiana, as well as launches in both Canada and Puerto Rico in the coming months.

Expanding its bingo product and the BetMGM Racing app into additional states is also in the pipeline, while co-owners Entain and MGM Resorts have pledged to invest a further $450m into the business throughout 2022.

This will take the total investment from the joint venture partners up to $1.1bn since the BetMGM brand launched in the US in 2018.

About the author

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Jake Evans

Jake Evans is an NCTJ-accredited journalist and editor who has covered the online gaming and sports betting industry since 2017. He is the managing editor of iGaming NEXT and has previously worked in both content and data for EGR, Stats Perform and Football Radar.

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