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MGM Resorts International has confirmed it will acquire game developer Push Gaming via its LeoVegas subsidiary, alongside the release of its Q1 2023 financial results.


Topline numbers

The operator’s digital brand BetMGM generated net revenue of $476m during Q1 2023, an increase of some 76% year-on-year as previously reported by MGM Resorts’ joint venture partner Entain.

The brand was responsible for some $81.9m of operating losses for MGM during the quarter, down from $92m in operating losses in Q1 2022.

MGM Resorts expects to generate net revenue from BetMGM’s operations of between $1.8bn and $2bn in the full year 2023, with the brand expected to turn EBITDA positive during the second half of the year.

Across all of MGM’s operations, the business generated consolidated net revenue of $3.9bn in Q1, up 36% year-on-year.

Growth was driven by significant increases in revenue across MGM’s Las Vegas Strip, regional US and Macau operations.

Net income attributable to MGM Resorts reached $467m during the quarter, compared to a net loss of $18m in the prior-year period.

That gave the business adjusted diluted earnings per share of $0.44, compared to just $0.01 in Q1 2022.

News nugget

As exclusively revealed by iGaming NEXT in April, the biggest news from MGM in Q1 was the deal to acquire game developer Push Gaming through LeoVegas, which MGM bought out last year.

The acquisition marks LeoVegas’ first major investment since it was acquired by MGM.

The operator said Push’s proprietary technology, IP and development expertise would bolster LeoVegas’ content production capabilities and support its plans for continued growth through expansion.

Push will remain under its existing management team, and its 100+ employees will continue to develop and distribute games via the company’s own platform and remote gaming server, MGM added.

The transaction is expected to complete during Q3 2023.

​​”The acquisition of Push Gaming by LeoVegas is consistent with our vision to expand MGM Resorts’ digital gaming presence internationally to grow our capabilities and products over the next several years,” said Gary Fritz, president of MGM Resorts International Interactive. 

“We are pleased to bring Push Gaming into our business as it brings a track record of developing games that are popular and have staying power in the industry as well as an exceptional management and operating team.”

LeoVegas CEO Gustaf Hagman said he was thrilled to welcome Push Gaming to the “extended family”.

He added: “The management team at Push Gaming has had a phenomenal journey, quickly growing the company from a small start-up to a player with outstanding proprietary content and a strong customer base. We look forward to contributing to their continued success moving forward.”

Davis Catlin, managing partner at Discerning Capital, said the Push Gaming deal is further evidence of a potential rift between BetMGM joint venture partners MGM and Entain.

“MGM is doing what’s best for its shareholders, which is to directly compete for deals ex-US and create its own digital offering,” wrote Catlin on LinkedIn.

“Entain has its own strategy and roadmap for deals. I wish the two of them would quit their lovers quarrel and just get married already.

“Its like watching an engaged couple each buy their own houses a year before the wedding,” he added.

Best quote

“We’re interested in live dealer. There’s nothing that suggests, given the nature of our business, that we should not be in that business, and I think through LeoVegas there’s an opportunity to do that.”

– MGM CEO Bill Hornbuckle on the future expansion of the company’s digital division

Best question

David Katz of Jefferies asked MGM CEO Bill Hornbuckle to add some colour on future synergies between MGM’s land-based and online customer databases.

In response, Hornbuckle said: “We’re very excited by what’s been created. Obviously, to think after this amount of time, that we could have a $2bn top line business this year which is showing all signs of profitability is exciting for us. 

“We have tens of thousands of customers that are driving on an omni-channel basis over $100m a year back and forth, and so that part of the business is starting to click in and starting to work.”

Still, looking to the future, he conceded: “We have work to do on product. We need single wallet, single account to be really effective in places like Maryland, New Jersey, Pennsylvania, and New York. 

“Obviously, we’re market leading in iGaming at 28% share, and no-one even comes close to that, but we’re mindful that people are trying so we’re very focused on it.”

Overall, he concluded: “I think we’re in great shape. We’ve got another couple of years to mature this business and see where it ends up, and then we’ll take it from there.”

Current trading and outlook

According to MGM, BetMGM continues to maintain its market-leading position in US iGaming, with some 28% market share in the vertical and a podium position in online sports betting, behind FanDuel and DraftKings.

However, the latest estimates from Eilers & Krejcik Gaming (EKG) suggest that DraftKings has now overtaken BetMGM as the online casino market leader in the US.

DraftKings recorded iGaming GGR share of 25.8% versus 25.1% for BetMGM per EKG estimates for the month of March.

The wider MGM business has several opportunities for growth, however, not least following its approval to develop a $10bn integrated resort in Osaka, Japan.

The business also continues to press on with its application to build a land-based casino in New York, after the state announced last year it would grant up to three licences for venues in the downstate area.

MGM completed the sale of the Gold Strike Tunica in Mississippi during the quarter, receiving $450m in cash proceeds as a result.

The business currently holds $4.5bn of cash on its balance sheet, and said it expects to continue to return capital to shareholders through ongoing stock repurchases, as well as pursuing long-term growth opportunities via digital acquisitions and development opportunities in Japan and New York.

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