BetMGM Projects Revenue in 2022 Will Exceed $1.3 Billion

Parent companies to invest about $450 million in BetMGM this year. Sportsbook launches in Illinois, Louisiana expected in Q1.
BetMGM Projects Revenue in 2022 Will Exceed $1.3 Billion
January 22, 2022

It is clear from the metrics that we are already delivering … the investment case is therefore compelling.BetMGM expects that net revenue from its operations will exceed $1.3 billion in 2022, and that the vast majority of that revenue will come from the 19 jurisdictions where it is currently active in sports betting and iGaming.

In a business update, executives of BetMGM — a 50-50 joint venture (JV) between MGM Resorts International and Entain — said the operator also expects to reach positive earnings before interest tax depreciation and amortization (EBITDA) in 2023. To help them reach that goal, the parent companies will invest approximately $450 million in the JV in 2022.

“It is clear from the metrics that we are already delivering,” said BetMGM CEO, Adam Greenblatt, during Wednesday’s conference call with analysts. “We are on track in achieving 20-25% of the substantial US total addressable market and positive EBITDA. The investment case is therefore compelling.”

MGM Resorts and Entain have invested approximately $1.1 billion in BetMGM since its launch in 2018.

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Sportsbook Launches in Illinois, Louisiana Planned in Q1

The operator said it plans to launch BetMGM Sportsbook in Illinois and Louisiana in Q1 2022. It also plans to open retail sportsbooks in Puerto Rico and will launch an online sportsbook and casino platform in Ontario later in the year.

During a Q&A with analysts, Greenblatt confirmed that Entain plans to launch both BetMGM and another brand, bwin, in Canada.

“What we see — even in the US, where we have multiple brands — is that both [brands] can thrive,” Greenblatt said. “The brands will be operated by different independent teams, so we fully see that as incremental to value.”

The operator also plans to launch its Bingo product and its BetMGM Racing app in additional states in 2022. It launched Borgata Bingo in New Jersey in December 2021.

Although BetMGM is unlikely to add as many states in 2022 as it did in 2021, and the operator has started to lap Michigan, one of its primary growth drivers, Greenblatt said the states where BetMGM is currently deployed “continue to surprise on the upside.

“We are lapping exceptionally strong starts, but all of the key performance indicators we are seeing in the business today speak to the depth of these markets. We continue to perform very strongly, so we haven’t seen a plateauing of organic demand in our live states.”

Driving that point further, CFO Gary Deutsch said 90% of the $1.3 billion in revenue expected in 2022 will come from states where BetMGM is already live, including New York, where BetMGM launched on January 17.

“With the vast majority of revenue, we have visibility on our status in the market,” Deutsch said. “We know we are competing there. Obviously, in the more mature states, we have a clearer view on some aspects of that [status].”

States Turning Contribution Positive

Deutsch said BetMGM was still holding to its formula that it takes 12 to 24 months from launch for a sports betting state to become contribution positive for the operator. For a gaming state, it takes 10 to 14 months from launch.

“It then takes about three years in sports and two years in gaming to get to payback,” Deutsch said. “That still holds, and we’re seeing that.”

According to Greenblatt, New Jersey was contribution positive for all of 2021. Deutsch said Michigan also turned positive about mid-year. The CFO added that BetMGM expects three sports-betting-only states — Arizona, Colorado, and Tennessee — will turn contribution positive in 2022.

Greenblatt emphasized that BetMGM expects to reach profitability in 2023 “based on what we can see today and our state rollout assumptions for this year and next. Next year, there will be months where we will be EBITDA positive.

“But let’s not lose sight of our reality: We are not selling toothpaste in a very mature market in a price-stable environment. That’s not this business. The market is still in relatively early, exciting stages, with a lot of new states becoming addressable at different and uncertain times. We’re also subject to short-term results-based volatility in sports. We only have to look to this football season to bear that out — October was tough, November was fantastic.

“So, while we cannot commit as I stand here today to profitability for the full-year 2023 at this stage, we do expect to enjoy many months of positive EBITDA as the year progresses.”

BetMGM said it will hold an investor day in May, where it will provide further updates on its performance, operational plans, and outlook. The date and time for the event have not yet been scheduled.

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