BetMGM 3Q26 adjusted EBITDA soars to US$86 million

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2026/06/26: Entain divesting European interest, selling 20% of Entain CEE to Emma Capital for US$484 million 2025/02/04: BetMGM execs bullish, despite wider losses 2025/03/14: MGM Resorts CEO cites digital as top focus in 2025 2026/09/24: BetMGM joint venture unchanged as People Inc. drops MGM Resorts bid

The Backstory

Profitability has become the central test

BetMGM’s latest quarterly update lands at a point when investors are looking less for proof that the U.S. online gambling market can grow and more for evidence that leading operators can turn scale into durable cash flow. The company, a 50/50 venture between MGM Resorts International and Entain, was built during a period when U.S. sports betting expansion rewarded aggressive marketing, bonus spending and rapid state-by-state entry. That phase has given way to a more selective model, with operators trying to retain higher-value customers while pulling back in markets where returns are thinner.

The shift is visible in BetMGM’s own messaging over the past year. Management has emphasized better player economics, more disciplined marketing and a larger role for igaming, which generally carries stronger margins than sports betting. The latest numbers show that strategy beginning to work through earnings, even as active customer counts soften. That trade-off — fewer marginal customers but higher revenue per active player — has become one of the defining metrics for the business.

The approach also reflects a broader industry recalibration. U.S. sports wagering remains competitive and tax-sensitive, while online casino expansion has been slower than operators hoped. For BetMGM, the stakes are especially high because its results feed directly into the digital ambitions of both parent companies and influence how investors value MGM’s and Entain’s exposure to North America.

A pivot from losses to operating discipline

Only a short time ago, BetMGM was still explaining why wider losses should not undercut confidence in the business. In early 2025, the company said its losses had expanded to US$291 million in 2024 from US$97 million a year earlier, even as management argued that the platform had been repositioned for a stronger year ahead. Chief Executive Adam Greenblatt described the operator as an “igaming juggernaut” and said the company had rebuilt momentum through product improvements and more efficient spending, according to BetMGM’s investor update on widening losses.

That period was important because it marked a change in how BetMGM wanted to be judged. Rather than highlight raw acquisition or market access, executives directed attention to revenue quality, sports handle, igaming receipts and cross-sell. The company had already identified higher-end recreational players as a priority, with Greenblatt saying BetMGM was targeting customers likely to wager across multiple products and channels.

Management also acknowledged that growth would be slower if the company spent less to acquire lower-value users. The bet was that reduced marketing waste, improved product speed, stronger parlay offerings and the MGM Rewards connection would generate more value from the existing base. The newest earnings update fits that framework: active users declined, but net gaming revenue per active rose in both sports and igaming.

MGM put digital near the top of its agenda

For MGM Resorts, BetMGM has become more than an investment in online wagering. It is part of a broader digital strategy that sits alongside Las Vegas, regional casinos and international development. MGM Chief Executive Bill Hornbuckle told investors in 2025 that digital was the company’s top priority, with BetMGM expected to generate about US$2.5 billion in revenue and the company’s broader interactive business positioned to benefit from Brazil and future igaming states, as detailed in MGM’s comments on digital as its leading 2025 focus.

Hornbuckle’s remarks were notable because they showed MGM linking online gambling to the rest of its ecosystem. The company has leaned on sports, entertainment, loyalty and resort relationships to differentiate BetMGM from digital-only rivals. It has also acknowledged earlier missteps, including high-cost mass marketing, and shifted investment toward product features such as single-game parlays, omnichannel capability and a single wallet.

That strategy depends on igaming expansion. Sports betting provides national visibility but is volatile because of hold rates, promotional pressure and tax changes. Online casino revenue is steadier and more profitable, but it is legal in only a limited number of U.S. states. MGM executives have pointed to states such as Maryland, New York and Illinois as possible opportunities, while warning that legislative progress can be slow. One new major state could meaningfully change BetMGM’s revenue trajectory.

Entain is freeing capital while holding its U.S. option

Entain’s position adds another layer to the story. The British gambling group has been reshaping its balance sheet and portfolio while maintaining its half of BetMGM, which remains one of its most strategically important assets. In June, Entain announced a phased exit from its Central and Eastern Europe operation by selling a 20% interest in Entain CEE to EMMA Capital for €425 million, with proceeds earmarked for debt reduction. The transaction, described in Entain’s plan to divest part of its European joint venture, implied a €2.1 billion valuation for Entain CEE.

The divestment mattered for BetMGM because it showed Entain prioritizing leverage reduction and capital discipline while preserving exposure to the U.S. market. Entain said it would use proceeds from a fuller exit to push reported leverage below 3x, with excess capital potentially returned to shareholders. That balance sheet focus raises the value of any asset capable of producing rising earnings without requiring fresh equity support.

BetMGM’s move toward positive adjusted EBITDA therefore has implications beyond its own income statement. Earlier funding needs had required substantial support from MGM and Entain, but management has said a revolving credit line would help shield the parents from further equity contributions. If BetMGM can fund growth internally, it becomes a more attractive long-term holding for Entain at a time when the company is pruning other assets.

Ownership questions underscored BetMGM’s strategic value

BetMGM’s importance was reinforced when People Inc., formerly IAC, explored a takeover of MGM Resorts. The proposal raised questions about whether a change in MGM ownership could lead to follow-on changes involving the BetMGM joint venture. MGM later said it would remain independent after People Inc. withdrew its bid, leaving the venture structure unchanged, according to MGM’s announcement that the BetMGM joint venture would remain unchanged.

The episode highlighted why digital assets have become central to casino company valuations. People Inc. cited MGM’s digital growth opportunities as part of its rationale, while MGM’s own chairman pointed to BetMGM’s momentum as a reason the company could create value as a standalone business. Even without a deal, the process signaled that BetMGM is likely to remain a focal point in any future debate about MGM’s structure, capital allocation or strategic alternatives.

For investors, the question is whether BetMGM’s earnings improvement can narrow the valuation gap with digital peers and justify the strategic importance both parents assign to it. Sustained EBITDA growth would strengthen that argument. A reversal, whether from sports results, taxes or promotional intensity, would revive doubts that the venture can consistently convert scale into profit.

Partnerships and new markets widen the runway

BetMGM has also continued to reinforce its brand through major sports relationships and geographic expansion. MGM Resorts and BetMGM renewed multiyear partnerships with Major League Baseball, keeping BetMGM’s brand across MLB platforms and preserving MGM Resorts’ role as the league’s exclusive integrated resort and casino partner. The renewal, covered in BetMGM and MGM’s MLB partnership extension, also includes MLB-themed casino games and event tie-ins in Las Vegas.

Sports partnerships help customer acquisition and engagement, but the larger financial prize remains online casino penetration and effective cross-sell. BetMGM operates sports betting across two dozen U.S. jurisdictions, Ontario, Alberta and Puerto Rico, while its iCasino footprint includes Alberta, Ontario, Michigan, New Jersey, Pennsylvania and West Virginia. Alberta is particularly important because it offers a recent test of BetMGM’s ability to apply lessons from Ontario to a new regulated market.

The company’s current performance suggests that the model is becoming more disciplined: fewer broad incentives, more focus on profitable users and deeper integration with MGM’s hospitality and loyalty network. The risk is that the market remains exposed to regulatory delays, tax increases and intense competition from larger sports-betting rivals. The opportunity is that BetMGM’s igaming base, combined with improved sports economics, gives it a path to reach the higher EBITDA targets management has outlined. That is why the latest quarter is less a standalone beat than a progress report on a multiyear reset.