MGM Resorts International said it expects BetMGM to be active in 20 jurisdictions in the US within the next 12 months and projects it will generate more than $1 billion in net revenue from its operations in 2022.
The company, which jointly owns BetMGM with Entain, also said BetMGM is the market leader for iGaming in the US and is the number two operator for US sports betting and iGaming combined.
The expectations and pronouncements were included as part of MGM Resorts’ investor presentation for Q2 2021. BetMGM was also a topic of discussion during an earnings call Wednesday to discuss the quarter.
BetMGM “continues to impress,” MGM Resorts CEO Bill Hornbuckle said during the call.
Top iGaming Operator
By MGM Resorts’ estimate, BetMGM became the top iGaming operator in the US sometime in January of this year and held a 30% share of the iGaming market across all US jurisdictions in Q2 2021, even in jurisdictions where BetMGM doesn’t currently operate.
The co-parent company also estimates that BetMGM has been the second-largest operator in terms of sports betting and iGaming in the US since about mid-March. BetMGM held a 22% stake of the market across all US jurisdictions in Q2 but held 24% of the market in places where it operates.
MGM Resorts said BetMGM also held a 17% share of the online sports betting (OSB) market in Q2 across all of its active jurisdictions.
While BetMGM is currently active in 13 jurisdictions in the US, MGM Resorts said it expects the operator to be live in 20 jurisdictions within the next 12 months. The company said it also expects BetMGM to have either secured, or be close to securing, market access in a total of 24 jurisdictions in that same timeframe.
MGM Resorts did not list the 24 jurisdictions, but a map that accompanied the presentation shows it is targeting California, Illinois, Kansas, Louisiana, Maine, Maryland, Massachusetts, Missouri, Ohio and Wyoming.
The company estimated that BetMGM’s expected capital consumption will total $450 million in 2021. It also forecast that BetMGM will have access to a long-term addressable market (TAM) of $32 billion; an expected long-term share of the US market ranging from 20-25%; and expected long-term earnings before interest, taxes, depreciation, and amortization (EBITDA) margin of 30-35%.
Execs See Upside for Growth
During the Q&A portion of Wednesday’s earnings call, CEO Bill Hornbuckle doubled down on the $1 billion prediction, saying there was already some potential upside working to the operator’s advantage.
“Remember, iGaming really just got going in Q2, not even in Q1,” Hornbuckle said. “We’ve got football with better programming and a better database to pull upon. We’ve got a couple of states that are on the horizon of coming out. We’ve got Maryland. We’ve got something we’ve just done in DC. Arizona is around the corner.
“So, between an increase in states and some other potential things that we continue to market, we feel pretty comfortable about the [net gaming revenue].”
Net revenues associated with BetMGM operations grew 19% sequentially from Q1 2021 to $194 million in Q2 2021. CFO Jonathan Halkyard attributed the increase to growth in both the iGaming and online sports betting verticals. More customers were acquired and retained, which yielded more first-time deposits and more active customers overall.
“These results are especially impressive during the quarter with arguably minimal exogenous catalysts—no major state launches, a seasonally low sports calendar and a further reopening of brick-and-mortar casinos.” Halkyard said during the call.
MGM Resorts’ share of BetMGM’s losses in Q2 2021 amounted to $46 million. Halkyard said that would be reported as part of the unconsolidated affiliates line in the company’s adjusted EBITDA calculation.
Capital expenditures for BetMGM in the US totaled $92 million in Q2 2021.
Expecting “Real” Competition from Caesars
Hornbuckle also touched on this week’s Q2 presentation by rival Caesars Entertainment. Caesars said it plans to invest more than $1 billion over the next two-and-a-half years to build its newly rebranded sportsbook and would rely on its massive customer database to help achieve that end.
“They’re going to step into the space in a substantive way, they’ll be a real competitor,” Hornbuckle said. “And if you think about what they do and what we do, they’re the most likely competitor to us in the context of same-store loyalty, presentation, ability to omni-channel and monetize across a broader platform—brick-and-mortar as well as digital. We are heavily into our loyalty push.”