BetMGM increases revenue, cash flow in third quarter

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The Backstory

Profitability replaced scale as the central test

BetMGM’s latest third-quarter report lands after a multiyear effort to convince investors that the joint venture between MGM Resorts International and Entain can grow without returning to the cash burn that marked its earlier expansion. The company’s 7% revenue increase to US$710 million and swing to US$86 million in quarterly cash flow are not isolated data points. They reflect a strategy management has been laying out for more than a year: spend less indiscriminately, lean harder on igaming and use MGM’s land-based casino network to attract more valuable customers.

That pivot followed a difficult 2024, when BetMGM’s losses widened sharply even as executives argued the underlying business was improving. On a February investor call, CEO Adam Greenblatt described the company as an “igaming juggernaut” despite losses rising to US$291 million, saying the business had spent the year rebuilding momentum and refining marketing investment. As detailed in BetMGM’s defense of its wider losses, management told investors the company would accept slower customer acquisition if it meant better returns from higher-value players.

The latest quarter suggests that bet is beginning to pay off. Active monthly players declined 3%, yet revenue and cash flow rose. That combination underlines the importance of player mix to BetMGM’s model. The company is no longer trying to win every marginal bettor in every state. It is trying to retain customers who wager more often, cross over between sports betting and casino, and can be tied into MGM Rewards, Marriott benefits and physical casino experiences.

Igaming became the anchor of the business

The most consistent theme across BetMGM’s recent updates has been the growing weight of online casino. In the current quarter, igaming generated US$483 million, about two-thirds of total revenue. That continues a pattern management has described as the foundation of its path to recurring cash flow.

Earlier this year, executives said igaming was carrying the company even without meaningful new state launches. In BetMGM’s year-end review of a “pretty tremendous year”, Greenblatt called igaming the “powerhouse and anchor” of the business and pointed to strong engagement from titles tied to familiar brands such as The Price Is Right, Friends and Wizard of Oz. The company also emphasized live-dealer products, which it viewed as a differentiated growth category in the United States.

That content strategy carried into subsequent quarters. BetMGM has repeatedly framed exclusive or branded games as a way to deepen engagement without relying solely on promotional spending. The logic is straightforward: online casino has higher frequency, stronger margins and less dependence on sports results than wagering on games. For a business trying to produce reliable cash flow, that matters.

Sports betting remains material, with online sports wagering revenue rising 7% in the latest quarter to US$216 million. But the mix shows where the company’s economics are strongest. The sports book can help acquire and engage customers, especially around major events, while igaming provides the heavier revenue base. Management has tried to increase cross-sell between the two, particularly among NFL bettors, but it has also acknowledged that not all sports customers are equally valuable.

The World Cup offered a timely boost

The World Cup has been one of the clearest catalysts behind BetMGM’s recent sports-betting momentum. During the second quarter, management said the tournament helped fill a quieter summer calendar and drove unusually strong soccer engagement. In BetMGM’s account of World Cup-driven engagement, Greenblatt said handle for the tournament was triple the 2022 level and described soccer as an emerging driver with the potential to broaden long-term wagering demand.

That helped set up the third quarter, when BetMGM benefited from World Cup engagement and continued sports activity while also preparing its platform for football season. The current results show online sports betting growth despite fierce competition and a smaller active-player base. The implication is that product performance, player targeting and marquee events can offset some of the drag from lower broad-market acquisition.

Still, sports wagering remains volatile. Management has repeatedly noted that game outcomes can swing results, especially in football. Earlier this year, executives described adverse sports results as a headwind, and retail betting has at times been hit hard by player wins. The latest quarter was more favorable, but BetMGM’s emphasis on cash flow reflects a recognition that sports betting alone is too unpredictable to support the company’s valuation story.

Prediction markets sharpened the competitive threat

BetMGM’s financial progress is unfolding against a political and regulatory fight over prediction markets, which management has cast as both a competitive nuisance and a threat to state-regulated betting. The company has been unusually direct in criticizing event-contract platforms, arguing they operate like sports books without the same licensing, tax and consumer-protection obligations.

In April, Greenblatt used a first-quarter call to say BetMGM was insulated from what he called the noise of prediction markets, while blaming those platforms for higher acquisition costs. The company said it stood with state attorneys general and expected the issue to reach the U.S. Supreme Court. That stance was outlined in BetMGM’s critique of prediction markets during its earnings call, where executives said they would focus marketing on areas of strength rather than chase customers in lower-return sports-betting states.

By the next major update, BetMGM had hardened its position further. In its pledge to stay out of prediction markets, Greenblatt said sports prediction contracts amounted to illegal sports betting under current law and warned that regulators had raised the possibility of license consequences for operators that entered the space. The company’s refusal to participate limits one avenue of expansion, but it also protects its relationships with state gaming authorities, which are essential to future market access.

The competitive effect remains uncertain. BetMGM has said it is not seeing broad national degradation in handle, and that prediction markets appear more active in states without legal sports betting. Even so, they may raise customer acquisition costs, complicate legalization debates and pressure states to clarify boundaries between financial contracts and gambling.

Capital returns changed the investor conversation

The latest US$68 million returned to MGM Resorts and Entain builds on a significant shift in how BetMGM presents itself to shareholders. After years of investment, the company has begun distributing cash to its parents while maintaining an undrawn credit line. That is a notable change for a joint venture that once required heavy funding to build national scale.

Previous distributions helped mark that transition. BetMGM earlier described its first major cash return as the start of a new era for shareholders, saying it could still preserve enough liquidity for operations and growth. The latest quarter reinforces that message: management is not merely guiding toward profitability, it is sending cash back while reaffirming full-year revenue and cash-flow targets.

The stakes are significant for both parents. MGM gains a digital extension of its casino brand, rewards database and omnichannel strategy. Entain retains exposure to the U.S. market through a business that has moved closer to self-funding. For investors, the question is whether BetMGM can sustain cash generation while funding product upgrades, dealing with taxes, defending against new competitors and preparing for potential state launches.

Expansion now depends on regulation as much as product

BetMGM’s next stage is partly outside its control. The company has repeatedly said the U.S. igaming map remains underdeveloped, with major potential in states that have yet to legalize online casino. Management has mentioned jurisdictions such as Virginia, Indiana, Washington, D.C., Maryland, Illinois and New York at different points, while also watching sports-betting opportunities in states including Alabama, Nebraska, Mississippi, Minnesota and Georgia.

That uneven legislative backdrop explains the company’s focus on extracting more value from existing markets. Without a wave of new igaming approvals, growth must come from better retention, higher-value players, stronger content and improved cross-sell. Alberta offers one nearer-term opportunity in Canada, but U.S. expansion remains the larger prize.

The current quarter therefore fits a broader story: BetMGM is trying to prove it can be a durable cash generator before the next regulatory opening arrives. Its revenue gain, positive cash flow and reaffirmed outlook strengthen that case. But the same results also show the limits of the model. Player counts can fall, sports outcomes can turn, taxes can rise and new rivals can distort marketing economics. BetMGM’s answer has been discipline, not volume. The coming quarters will test whether that is enough to reach its longer-term cash-flow ambitions.