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
From momentum to moderation
BetMGM’s decision to dial back its 2026 revenue and cash-flow targets follows a stretch when the operator consistently talked up its trajectory and posted double-digit growth. In 2025, BetMGM twice upgraded expectations as product changes and tighter player management appeared to pay off. The company boosted full-year outlooks after a strong second quarter, saying net revenue rose 36% and cash flow jumped to $86 million, and increased guidance to $2.7 billion in revenue and $150 million in cash flow, citing refined marketing and stronger product performance, according to BetMGM revenue, cash flow surge. Ahead of its third-quarter call, it lifted projections again, pointing to continued momentum across online sports and igaming, as detailed in BetMGM raises revenue and cash flow projections.
The retrenchment now reflects a more costly promotional backdrop, a lower-than-expected hold and handle growth that missed internal and analyst marks. Those pressures show how quickly unit economics can shift in a competitive market where customer acquisition, product differentiation and bet outcomes all feed directly into margins. While BetMGM still targets positive annual cash flow, guiding to the low end of $300 million to $350 million, the step down from prior ambitions underscores a turn from 2025’s acceleration to a 2026 posture of protecting profitability while absorbing tougher comps and a richer promo environment.
A summer of outperformance
BetMGM’s 2025 narrative set up today’s comedown. Through midyear, the operator leaned on faster apps, single-game parlays and exclusive igaming content to boost engagement and monetization, as leadership emphasized disciplined acquisition focused on premium-mass customers. In the second quarter, sports-betting revenue vaulted 56% while monthly active users edged up to about 901,000 and market share held at roughly 8% in online sports and 22% in igaming, per BetMGM revenue, cash flow surge. Management then raised full-year 2025 revenue expectations to approach $2.8 billion and called for roughly $200 million in cash flow, anchored by improved marketing efficiency and product upgrades that lifted margins, as laid out in BetMGM raises revenue and cash flow projections.
That upshift drew swift attention on the Street. As early as June, analysts parsed an initial guidance lift to $2.6 billion for 2025 revenue and to more than $100 million in adjusted EBITDA. Some saw the higher bar as a show of confidence rooted in handle growth and better flow-through, while others framed it as a catch-up to already bullish consensus. Jefferies said the upgrade implied meaningful upside for co-parent Entain’s earnings and reiterated BetMGM’s view of near-term return on investment potential, while Deutsche Bank argued the EBITDA raise was the bigger surprise, given its model already sat near the top of the prior revenue range. That split is captured in Analysts split on BetMGM revenue forecast.
Wall Street’s read on the pivot
The latest quarter forced a reset. First-quarter revenue rose 6% year over year but missed consensus by a wide margin, and cash flow trailed expectations as well. Handle advanced only modestly and the hold rate landed below modeled levels, compounding a $10 million hit from unfavorable sports results. Promotional spending climbed almost one-fifth while monthly active users fell. The company framed the MAU decline as a function of disciplined player management and countered with higher revenue per igaming player. Still, the combination of lighter volumes, a slightly softer hold and pricier promos squeezed reported results and pushed management to trim the year’s range.
Analysts tracking the name have seen this movie across the sector. Expanded same-game parlay menus and improved risk management can lift structural margins, but short-term sports outcomes and promo intensity can swamp those gains. BetMGM’s 2025 narrative leaned on execution — faster app performance, deeper igaming catalogs, refined targeting — to build resilience against volatility. The 2026 guide down suggests those levers could not fully offset a tougher mix, particularly if competitors leaned back into offers to defend share or recapture volumes in key states.
Margin math and the cost of growth
The shifting cost-benefit of promotions sits at the center of the recalibration. Coming out of 2024, leading U.S. books had eased promo intensity as cohorts matured and operators pushed for profitability. When results broke against the house late that year, operators absorbed the hit but stressed long-term discipline. Flutter, parent of FanDuel, cut its 2024 U.S. outlook after one of the most bettor-friendly NFL stretches in memory, with the sportsbook net revenue margin sliding to 6.6% in the fourth quarter despite structural margins in the mid-teens, as reported in Flutter lowers 2024 U.S. revenue projections amid disappointing betting trends.
BetMGM’s 2025 rebound showed how mix and execution can reverse that tide, but the first quarter’s miss points to the other side of the equation: when promotional spend rises faster than handle and hold underdelivers, flow-through deteriorates. Igaming’s steadier growth and higher revenue per player help, yet they could not close the gap in the period. Management’s decision to target the lower end of cash-flow guidance is a nod to preserving balance sheet flexibility while avoiding a promotional arms race that may not yield durable share gains.
Competitive and regulatory crosswinds
Beyond unit economics, BetMGM is navigating regulatory and strategic choices that shape its growth lane. The company has returned capital to its parents and kept credit lines undrawn, signaling confidence in liquidity even as it prioritizes measured expansion. It has also taken a clear stance against prediction markets, citing regulatory risk and potential license consequences raised by state watchdogs. Leadership has argued that such exchanges amount to unregulated sports betting under current law and said BetMGM will not jeopardize approvals in core jurisdictions, as covered in BetMGM swears off prediction markets in earnings call.
The posture may limit optionality in a fast-evolving wagering ecosystem, but it aligns with the company’s emphasis on compliance and on deeper investment in igaming, where it claims a leading share. Expansion maps still matter: potential launches in new sports-betting states and any breakthroughs on igaming legalization could re-rate growth expectations, just as promo behavior by larger rivals could pressure near-term margins.
What to watch next
Investors will look for reacceleration in handle, stabilization in hold near structural levels and a slowdown in promo growth relative to revenue. Signals that igaming can continue to lift revenue per player while MAUs recover would support the cash-flow path. The 2025 arc showed BetMGM can toggle marketing efficiency, product and player management to drive upside, as reflected in its midyear surge and higher guidance in BetMGM revenue, cash flow surge and BetMGM raises revenue and cash flow projections. The 2026 reset will test whether that playbook can overcome a tougher promotional field and more variable sports outcomes without sacrificing the discipline management has made central to its story.
