BetMGM lowers targets on revenue miss
Citing a trio of factors, BetMGM lowered its revenue and cash-flow guidance for the balance of 2026. While still guiding to US$300 million to US$350 million of annual cash flow, BetMGM executives are now aiming for the lower end of that range.
Revenue for the full year is projected to come in between US$2.9 billion and US$3.1 billion. That is down from a previous range of US$3.1 billion to US$3.2 billion.
First-quarter handle was lower than expected, 3% higher than in 2025. The promotional environment was said to be costlier and igaming revenues grew 9%.
First-quarter revenue of US$696 million was 6% higher than in the year previous. However, it came up short of Wall Street projections on the order of US$785 million.
Cash flow also underachieved. BetMGM realized US$25 million but Wall Street’s consensus was for US$42 million, with some analysts expecting as much as US$67 million.
An unfavorable-results effect on sports betting of US$10 million was modeled by J.P. Morgan analysts. They also reported that BetMGM’s hold percentage was 8.8%, not the 9% anticipated.
Promotional costs escalated 19% to US$168 million. However, handle did not grow 9%, as analysts expected, but only a third of that amount.
Igaming had been anticipated by some to accelerate 16%, not the lower amount reported by BetMGM. Revenue from igaming was US$481 million, not the US$514 million expected by J.P. Morgan.
Wrote analyst Daniel Politzer, “BetMGM’s outlook reflects moderated top-line growth expectations, continuing operational efficiencies, and disciplined strategic investments focused on out year growth.” The company also reported returning US$3 million to parents MGM Resorts International and Entain.
Monthly active users slipped 9%. However, Politzer attributed this to “disciplined acquisition and ongoing player management.” In igaming, monthly active players were off 3% but revenue per player was up 12%.
In igaming-enabled states, BetMGM enjoyed 20% market share. For online sports betting, that share was 7%.
David McKee is an award-winning journalist who has three decades of experience covering the gaming industry.
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The Backstory
Setting the scene
Betting operators are recalibrating after an unusually punishing run of sports results, rising customer acquisition costs and shifting regulatory terrain. The immediate pressure comes from a squeeze on U.S. sportsbook margins that has upended revenue and profit expectations across the sector. That backdrop helps frame why a major operator would narrow its full-year targets following a first quarter that grew, yet fell short of Wall Street models on both revenue and cash flow. With hold rates a few tenths below plan and promotions at a premium during peak sporting calendars, small variances compound quickly at scale. The question for investors is whether a soft patch signals a broader reset or a transitory blip on a longer growth path driven by iGaming expansion, product depth and operational leverage.
The recent moves by peers and suppliers, along with enforcement and legalization actions in multiple jurisdictions, suggest both short-term headwinds and longer-term tailwinds. Taken together, they outline a competitive landscape where execution on margin, disciplined marketing and regulatory positioning will determine who converts scale into sustainable cash flow.
Margins under pressure
U.S. sportsbook profitability is highly sensitive to the mix of favorites and underdogs, and operators have been candid that recent outcomes skewed against them. Flutter cut its 2024 U.S. revenue guidance and EBITDA outlook after what it called one of the most bettor-friendly NFL stretches on record, citing a fourth-quarter sportsbook net revenue margin of 6.6% despite structural margins of 14.5%. The company pointed to adverse sports results as a key driver, even as it reduced promotional spend year over year. The sharp guidance reset—US$370 million below the prior revenue midpoint and a US$205 million EBITDA step-down—underscores how volatile short-term results can mask underlying operating improvements.
That same volatility helps explain why even modest shortfalls in sportsbook hold can derail quarterly consensus targets at other operators. While iGaming provides a steadier revenue stream, mix shifts and seasonality can magnify sportsbook variance. When combined with intensified competition around key events, the industry’s push to balance promotional intensity with unit economics becomes pivotal. In this environment, a few million dollars of negative results can cascade into wider gaps versus models, prompting companies to emphasize cost discipline and long-term product investments over chasing near-term share at any price.
Promotions, product depth and the race for share
Operators face a familiar trade-off: fuel handle and active users with richer offers or protect margins by tightening incentives. Flutter flagged lower promotional spend in the quarter even as results went against the house, reflecting a preference for profitability over unprofitable growth. That approach resonates with the sector’s shift toward “disciplined acquisition” and higher revenue per player in iGaming, where lifetime value is easier to forecast and cross-sell is stronger.
Supplier strategy is converging around that same theme. Abelson Info’s rebrand to Abelson Sports signals how data and pricing depth are becoming competitive moats as sportsbooks look to differentiate beyond bonuses. The London-founded firm, which serves tier-one operators including Flutter and Entain, streamlined its offering and leadership to accelerate expansion in the U.S. and Latin America. Its partnership with SailGP adds niche markets that can attract engaged bettors and support margin through diversified content. For operators, sharper pricing, broader markets and personalized experiences can lift hold without overspending on promotions—an important lever when monthly active users fluctuate with seasonal calendars and promotional cycles.
Regulatory crosscurrents shape the addressable market
Policy moves continue to pull in opposite directions, curbing illegal activity in mature markets while opening new regulated opportunities abroad. In the U.S., the Michigan Gaming Control Board targeted 11 unlicensed offshore sites with cease-and-desist letters, citing violations of multiple state laws and risks to consumers from poor safeguards, withheld winnings and unfair wagering terms. Aggressive enforcement can gradually steer play toward licensed operators, improving channelization, trust and tax collections—conditions that favor scaled brands and could bolster iGaming and sportsbook revenue per user over time.
Internationally, legalization efforts signal growth lanes beyond the current U.S. footprint. New Zealand plans to issue up to 15 online casino licenses to counter offshore play and improve consumer protections. SkyCity’s plan to secure a New Zealand online license and execute a “day one” launch strategy highlights how land-based incumbents intend to leverage loyalty programs, a single customer view and compliance capabilities to scale quickly in a newly regulated market. For global operators and suppliers, such openings diversify revenue, mitigate jurisdictional risk and reinforce the strategic value of omnichannel ecosystems.
iGaming’s steadier cadence
While sportsbooks draw headlines when results swing sharply, iGaming has shown more predictable growth with higher revenue per player, making it a ballast in mixed portfolios. That stability turns on product quality, localization and responsible gambling tools that regulators increasingly require. New Zealand’s proposed framework would prioritize safer play—an approach likely to favor established operators with mature compliance and analytics. SkyCity’s focus on host responsibility and leveraging land-based assets for education and retention reflects how operators aim to win share through trust and tailored experiences, not just bonuses.
On the supply side, data providers are investing in speed, accuracy and breadth to keep casino and sportsbook content fresh. Abelson Sports’ consolidation of odds, tech and data under one brand is designed to simplify procurement and improve responsiveness, helping customers deploy new markets and features faster. As competition intensifies, operators that can blend reliable iGaming growth with disciplined sportsbook risk management should be better positioned to smooth earnings, even when sports outcomes break against them.
What it means for the next leg
The immediate challenge for operators is navigating a margin reset without sacrificing strategic progress. Flutter’s note that it views the headwinds as transitory—and its continuation of a share repurchase program of up to US$5 billion—signals confidence in long-term unit economics despite a difficult quarter. The company’s updated outlook also emphasizes that non-U.S. growth has been stronger than expected, offering a hedge against U.S.-specific volatility.
For peers, the playbook looks similar: prioritize operational efficiency, optimize promotions, deepen product and data capabilities, and position for regulatory openings while enforcement tightens against illegal operators. If channelization improves in markets like Michigan and new regimes come online in places like New Zealand, the industry’s revenue base should broaden and stabilize. In the meantime, investor scrutiny will center on hold normalization, the cadence of promotional spend and signs that iGaming can offset sportsbook variance. Those signals will determine whether today’s tempered targets mark a prudent reset or the first step in a more durable margin rebuild.
