MGM continues US online casino gaming lead
BetMGM continues to lead the US online casino market, placing it in the driver’s seat of the most lucrative component of digital gaming.
MGM’s flagship digital gaming product has nearly 30% iCasino gross gaming revenue share in operating markets, according to figures released as part of the company’s second-quarter earnings results Wednesday. That is nearly 50% higher than both its two closest iGaming competitors, FanDuel and DraftKings, and significantly ahead of Caesars, the fourth closest.
Though full commercial online casino offerings such as slots and table games are only available in five states, these options have proven far more lucrative per capita than digital sports betting. Digital casino games are also not subjected to the boom-or-bust swings of the sports calendar, which rises with football in the fall and craters with the season endings of most other major sports in the summer.
In New Jersey, operators have generated $815m in online casino gaming revenue during the first half of calendar year 2022. Online sportsbooks have generated $309m in revenue during that same time.
“It is the key to the bottom line of the business,” MGM CEO Bill Hornbuckle said about online casino gaming during Wednesday’s earnings call.
MGM, best known for its brick-and-mortar properties, continues to hold a sizeable lead for its online compliment despite the success of its competitors in other verticals. By MGM’s own estimates, FanDuel has a significant advantage in sports betting revenue market share.
Because online sports betting is legal in more than 20 states, FanDuel has topped all other competitors in combined US digital casino and sports betting market share, per MGM estimate. MGM is second by that metric and DraftKings, which per estimates has roughly equal market share in both iCasino and sports betting individually, is third. Caesars, whose company officials Tuesday acknowledged their internal iCasino gaming struggles, is a distant fourth.
MGM CEO Bill Hornbuckle: “(iGaming) is the key to the bottom line of the bussiness.”
Combined, the four companies have roughly 80% of the US iGaming market. All four operate in New Jersey, Pennsylvania, Michigan and West Virginia. FanDuel and DraftKings are the exclusive legal operators in Connecticut, the only other state with a competitive commercial iGaming market.
Ontario has been a major focus for these four – and nearly two-dozen other operators- as the most populated legal commercial iGaming and sports betting jurisdiction in North America. Though revenue figures have not been released publicly since the province’s licensed market opened in April, Hornbuckle said Wednesday BetMGM has “high single-digit market share.”
“We’re exactly where we thought we’d be, particularly with our iGaming business,” Hornbuckle said about the Ontario market. “It’s clearly a real marketplace that is used to iGaming and sports betting and our entry to that is productive and we’re excited about where that ultimately all goes.”
MGM expects to finish acquiring European online casino operator LeoVegas by the end of 2023. Though there are no specific US plans for LeoVegas currently, Hornbuckle said, it could offer potential avenues for additional American growth in the future.
While MGM and its 50/50 joint venture partner Entain have combined to lose more than $300m from BetMGM in just the first six months of 2022, Hornbuckle said profitability is still possible by the end of 2023. With few remaining potential brick-and-mortar casino gaming markets left, online casinos and sportsbooks are a key growth area in the future, Hornbuckle said.
On Wednesday’s earnings call, BetMGM exceeded its overall consensus Q2 revenue projections, largely on the strength of its brick-and-mortar Las Vegas Strip properties. The acquisition of the high-end Cosmopolitan, Vdara and Aria casinos in the past 12 months helped the company generate more than double its year-over-year hotel room revenue compared from Q2 2022 to Q2 2021.
Despite the revenue beat, the company missed its consensus earnings per share projections.
The stock was up more than 4% during regular trading hours on a strong trading day for markets overall. MGM’s stock spiked nearly 5% following its after-hours earnings release before ending extended trading up more than 2%.