BetMGM execs bullish, despite wider losses

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BetMGM’s losses grew from US$97 million in 2023 to US$291 million in 2024. Negative return on investment went from US$62 million to US$244 million.

Even so, “We are an igaming juggernaut,” proclaimed Chief Executive Adam Greenblatt during a February 4 investor call. “We are on the right path already.” The past year, added Chief Finance Officer Gary Deutsch, “positioned us for a big year in 2025.”

Greenblatt was undeterred by the latest figures, saying that in 2024 BetMGM was “focused on rebuilding momentum,” scoring US$2.1 billion in revenue. He guided investors toward US$2.4 billion to US$2.5 billion in revenue in the new year, along with a positive return on investment, saying BetMGM was now “a stronger business in every respect.”

The chief executive said BetMGM had seen upward trends across all of its key performance indicators and had done so without any new markets coming online. “Our progress and opportunity in online sports betting should not be underestimated,” he added.

The past year had been spent, Greenblatt continued, on refining BetMGM’s marketing investment, among other goals. As a result, “much greater efficiency” had been achieved.

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He allowed that fourth-quarter NFL outcomes had been challenging but added, “It’s definitely still early but we are very encouraged by results in January.” BetMGM was, he said, targeting higher-end, premium value players, using the term “premium mass” usually associated with Macau.

Greenblatt said this was not so much a shift as an evolution. “We’re really fishing in the deepest waters.” He added that BetMGM would be investing less in states where it had shallower penetration or where it had come late to the market.

“Our average player is now making more bets, each of which is slightly higher on average,” Greenblatt added. He said he expects slower customer acquisition but greater value per player, adding that it was important to capture “omnichannel” players who wager both in casinos and online.

Greenblatt pointed to increases in net revenue, sports betting handle and igaming receipts, all up modestly in 2024, with sharp, double-digit increases in the final quarter. BetMGM’s igaming market share had grown to 22%. “We are nearly double the fourth-ranked operator,” he said.

The BetMGM boss added that the total market for igaming and sports betting would prove to be even bigger than anticipated. One target of opportunity is the Canadian province of Alberta, where BetMGM was “ambitious.”

The operator has doubled igaming content to 5,400 games, with cross-sell between sports betting and igaming up 11.5%. Greenblatt said his goal was for BetMGM to be “the destination for all igaming players.”

One proposed reason for this was BetMGM’s ongoing adoption of live-dealer online play. “Live dealer is a specific experience and the players who enjoy it love it,” Greenblatt commented. He said the company was investing in new studios and games, and that “player adoption will happen organically, as a matter of time.”

“We ended the year as a stronger, higher growth business,” Deutsch resumed. He said marketing will be done less to lower-value players. A new, revolving line of credit, he noted, would shield MGM Resorts International and Entain (co-parents of the company) from making further equity contributions on top of the US$1.2 billion already invested.

Most 2025 revenues, Deutsch continued, “will come from players already in the BetMGM tent.” He remarked that BetMGM has reached the scale necessary for long-term profitability and “we feel there are very few operators who will find their way to join us.”

A goal for the company was to tie in players with MGM Resorts, to build identification of BetMGM as “the brand that treats players right.” This included being able to earn MGM Rewards points while playing online and tying into the Marriott loyalty program.

Queried about possible igaming legislation, Greenblatt said he didn’t expect any to succeed in 2025 but added that nine states were actively considering it. “It’s just a matter of time before we see a lot more states adopt some form of igaming legislation,” he said, confiding that BetMGM was keeping a watching brief on Maryland, Illinois and New York State, even if its expectations were low at present.

He also said BetMGM was deemphasizing a five-year timeline for return on investment, preferring to go after near-term profit, and that he expected growing use of single-game parlays in sports betting.

Tax increases were on the mind of Greenblatt’s audience, possibly in the wake of Ohio Gov. Mike DeWine’s February 3 announcement that he wished to redouble the Buckeye State’s tax on sports betting operators to 40%. “We have a shared interest,” Greenblatt replied, “in that we are taxed fairly and in a way that allows our industry to flourish against the illegal markets.”

The latter goal, he said, was being challenged by steep tax increases. Greenblatt said such states were making it less attractive for players to patronize onshore, regulated operators instead of offshore, unregulated ones.

Instead of ratcheting up taxes, Greenblatt said, “the best option is to legislate and regulate igaming … the revenue is far more significant.” But, he assured Wall Street analysts, “We’re a tenacious bunch.”

BetMGM was also, per Greenblatt, keeping a close eye on predictive-betting markets, as Entain is already heavily into election wagering in Europe and Ontario. The company was, he said, taking a wait-and-see attitude, wanting such wagering conducted by the same rules as apply to his company and its fellows.

Even before the investor call, stock analysts seemed pleased with the BetMGM message. Jefferies Equity Research analyst wrote to investors to say the numbers were “materially better than consensus expectations.” 

Deutsche Bank analyst Carlo Santarelli added that the data “should provide investors with a cleaner look into the fundamentals of the [joint venture], something we believe could promote a stronger valuation for the MGM ownership stake in BetMGM.”