BetMGM blasts prediction markets in earnings call
“Bad results for the house” was BetMGM Chief Financial Officer Gary Deutsch’s summary of a less-than-optimal quarter for the sports betting provider. His remarks came during the company’s first-quarter earnings call 14 April.
“It’s been a steady start to 2026” was how Chief Executive Adam Greenblatt put it. He likewise described the quarter as being below expectations because of adverse outcomes.
“We are better-insulated than most from the ever-increasing noise of prediction markets,” Greenblatt continued, saying BetMGM was focused on growing its cash flow. In igaming, he said more players had been obtained than expected, albeit at a higher cost. Still, he professed himself “very comfortable” with the return on player investment.
Those acquisition costs were up significantly, Greenblatt said, thanks to “new sports betting companies … they call themselves prediction markets.” He denounced the rivals at length, saying BetMGM stood with 40 state attorneys general and was looking forward to US Supreme Court adjudication of what he considered a states-rights issue.
Greenblatt predicted that “the current climate of hyper-spend” would pass. He also implied that the present pace of spending was unsustainable.
The Chief Executive called current financial results “pretty amazing,” with BetMGM having year-over-year growth “despite seeing new, billion-dollar spenders in the category,” a poke at prediction markets. They were, he continued, the hot topic at Indian Gaming Association discussions this month. “Directionally, it’s helpful,” as event contracts were spurring pressure to expedite digital expansion in states like California.
As a reaction, BetMGM would be spending less on marketing to OSB-only states, or as Deutsch put it, “we’re going to focus on our strengths.”
BetMGM, Greenblatt continued, was reliant upon higher-value players. These were described as more volatile but more resilient. Handle from active users was said to be up 23%, thanks to an “improved player mix” and fewer marginal players in the active base. “We are well-positioned to capitalize on several opportunities,” he added, citing the World Cup and July’s scheduled rollout of igaming in Alberta.
Even with prediction-market pressures, BetMGM was seeing “incredibly resilient” upper-end players. Greenblatt said. “The higher up you get, the better.” The same was true of igaming bettors: “We’re seeing no bottom of premium players.”
Asked about the effect of prediction markets on the cost of customer acquisition, Greenblatt laughed. “I don’t control what others choose to spend, underpinning bad investment. We’re controlling the controllable. We’re not assuming that irrational spending continues to become more rational. Long-term, the market is going to come back to us and that’s an exciting moment,” he said.
“The majority of these players will return to us,” Greenblatt continued, because of the quality of BetMGM’s product and its customer service. Another ace in BetMGM’s hole, according to Greenblatt, were the terrestrial rewards MGM rewards can provide.
“The value proposition is better for most players,” Greenblatt asserted, “unless you’re in high school. But that is not our customer.” He applauded the Kentucky Legislature for trying to raise that state’s minimum betting age to 21.
Greenblatt forecast that prediction-market dynamics would end in “shark-on-shark violence. Most recreational players flow back in time.” Event contracts would be dominated by sharps, he forecast, while casual players would “lose too quickly.”
Focusing on igaming growth, Greenblatt said, “what we’re going to do is build on our powerful success and our evolution. We’re at the dawn of our Wizard of Oz franchise and Wheel of Fortune.” He added that BetMGM was seeing multiple days per week of action from its players.
Saying the US market had not been maximized, Greenblatt described its size as “staggering.” Pre-COVID, 40% of US consumers had visited a casino at least once a year. “We have a long way to go” to capture them, Greenblatt said, adding that BetMGM would be building upon the success of its live-studio product.
Parent fees paid by BetMGM to Entain and MGM Resorts International totaled just US$3 million, which was attributed to “the seasonality of our business.” However, BetMGM leadership stood by its goal of US$500 million in annual cash flow by 2027.
Queried about BetMGM’s igaming performance, Greenblatt said it was “just reflecting that we haven’t seen a new state since 2022,” compounded by heightened competition. Of the latter, he said, “we’re just seeing a natural evolution of competition.”
As for new jurisdictions, Greenblatt said Virginia, where igaming was recently tabled in the Legislature, is “pretty positive.” He predicted legalization in 2027.
Igaming in Maine, he cautioned, could yet be repealed by popular vote. “It’s not a needle-mover one way or the other.” Still, he said he remained positive on expansion, saying that we would see greater momentum on the issue and soon.
David McKee is an award-winning journalist who has three decades of experience covering the gaming industry.
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The Backstory
From caution to confrontation
BetMGM’s sharper tone on prediction markets did not emerge in a vacuum. On multiple recent earnings calls, Chief Executive Adam Greenblatt and Chief Financial Officer Gary Deutsch telegraphed unease with event-contract operators and warned of regulatory risk if licensed sportsbooks crossed that line. In an Oct. 14 discussion, Greenblatt said the company would not jeopardize its standing with state regulators who had cautioned against exchanges and even raised the prospect of license consequences. He framed sports prediction markets as unregulated sports betting that skirts consumer protections and tax regimes. The company’s position and regulatory readout were explicit on that call, which emphasized a disciplined approach to player acquisition and a focus on premium customers even as football volatility pressured short-term results. For detail, see BetMGM’s Oct. 14 earnings call.
By early February, the stance had hardened. On a year-end call Feb. 4, Greenblatt aligned BetMGM with state regulators, attorneys general and major leagues that oppose event contracts, while downplaying any national impact from those markets. He portrayed leakage as confined to sharp bettors and underage would-be customers, a cohort BetMGM does not seek. The message: the company would win back casuals over time with product depth, service and omnichannel rewards. That framing is laid out in BetMGM’s year-end call on Feb. 4.
Why prediction markets became a flash point
The company’s friction with prediction markets has two roots. First, customer acquisition costs rose as new operators spent aggressively, a dynamic BetMGM executives have tied to the rise of event-contract rivals. Second, regulators and attorneys general have intensified scrutiny, creating legal uncertainty for licensed sportsbooks that might consider offering similar products. Greenblatt has repeatedly cast the issue as a states rights question that will be sorted in court, and as a matter of preserving the integrity of regulated wagering ecosystems.
That framing coexists with operational nuance. On April 28, when BetMGM posted a first-quarter profit that topped its own guidance by 17 percent, Greenblatt still acknowledged “a degree of risk” from prediction markets in states with legalized online sports betting. He described the segment as niche based on international experience and said BetMGM would “participate if required,” while remaining cautious on full-year guidance and moderating expectations for handle growth. The balance of opportunity and restraint is detailed in BetMGM’s April 28 first-quarter call.
The company’s recurring message: even if event contracts siphon some action during hot streaks or media hype cycles, regulated operators with established liquidity, product breadth and loyalty economics should outlast hyper-spend phases. That is particularly true, management argues, as states step up enforcement around consumer protections and tax collection.
Financial context and liquidity posture
The strategic line against prediction markets has been backed by a conservative balance sheet and tight capital discipline. In mid-October, BetMGM initiated a US$200 million distribution to its parents, MGM Resorts International and Entain, and set a US$100 million cash floor while keeping a US$150 million credit line untouched. Management said it could pause distributions to fund targeted growth if needed but would avoid spending that risked regulatory backlash. Those moves and guardrails are outlined in the Oct. 14 earnings call.
The parent context also matters. MGM Resorts reported higher fourth-quarter net revenue in 2024 and reiterated expectations for BetMGM profitability as the joint venture scaled North American digital operations. The year showed investment-heavy rebuilding for the JV, with losses narrowing toward break-even exiting the fourth quarter and leadership pointing to stronger run rates. That backdrop appears in MGM Resorts’ fourth-quarter and BetMGM JV update.
As 2025 progressed, BetMGM reported sharper execution: higher online sports betting net revenue and parlay activity, increased average bet per user and US$133 million in igaming profit in the first quarter. Executives flagged tax headwinds in select states and launch costs in Alberta but reiterated focus on product speed, live betting and in-house content. The emphasis on operating leverage over land-grab spending is consistent across the April 28 call and the Feb. 4 year-end review.
Competitors move the goalposts
BetMGM’s rhetoric also reflects a shifting competitive map. DraftKings, which has leaned into national media distribution, announced it will become the sole official sportsbook and odds provider for ESPN starting Dec. 1. In parallel, it unveiled plans to scale DraftKings Predictions into many new states via sports event contracts to capture markets without legalized online sports betting. Management pitched the move as a new customer funnel and revenue stream, backed by media reach and a recently acquired CFTC-licensed exchange. The strategy and early financial markers are in DraftKings’ investor call on its ESPN tie-up and prediction markets.
That competitive pivot helps explain BetMGM’s sharper posture. If media-led rivals use prediction markets to seed brand relationships in closed OSB states, they could enjoy a head start when those jurisdictions open, or at least raise CAC for incumbents. BetMGM’s counter is a premium-player focus, omnichannel rewards through MGM Resorts and content-led igaming growth, while counting on regulators to police event contracts that function like sports betting without comparable oversight.
Expansion bets and regulatory calculus
The stakes extend beyond near-term hold volatility. BetMGM’s growth roadmap relies on selective state expansion, deeper igaming penetration and disciplined marketing. Executives have pointed to likely OSB openings such as Missouri and to igaming opportunities in Virginia and other jurisdictions where tax structures could support sustainable returns. In Canada, the company expects to be a top player in Alberta when the province opens digital betting, drawing confidence from share gains in Ontario. Those targets and timelines recur across first-quarter commentary and the Oct. 14 outlook.
Regulatory views on prediction markets could accelerate or hinder those plans. If states see event contracts as leakage from taxed sportsbooks, they may tighten enforcement while warming to broader regulated frameworks to capture revenue. Conversely, if event contracts gain legal traction, operators may need parallel products to defend share, despite compliance risk. BetMGM’s current bet is that regulatory pressure and consumer protection priorities will curb event-contract expansion, bringing casual bettors back to licensed books. Its recent results — profit in the first quarter, stronger igaming engagement and reduced reliance on broad-based promotions — give management room to hold that line while maintaining liquidity for targeted market entries.
The upshot: BetMGM is wagering that patience, product depth and regulatory alignment will outlast the hyper-spend cycle. Competitors are testing a different path through prediction markets and media scale. The next few quarters — including pivotal state decisions and Alberta’s rollout — will show whether the industry converges on one model or splits along regulatory and media lines.
