BetMGM Forecasts 2022 Revenue of $1.3B, Sees US Market Share up to 25%

BetMGM held its investor day today, telling analysts it generated about $850 million in revenue last year while forecasting significant top line growth to $1.3 billion in 2022.

Actor Jamie Foxx in a BetMGM advertisement. The operator is forecasting growth and EBITDA profitability. (Image: OddsCritic)

The 50/50 joint venture between MGM Resorts International’s (NYSE:MGM) and Entain Plc (OTC:GMVHY) says it had 29% iGaming market share in February and 25% sports betting share in the markets in which it operates. Currently, BetMGM is live across 23 US markets and in Ontario, Canada. By its estimates, BetMGM is the top company for internet casinos and sports wagering in the markets where it’s active and it’s forecasting growth.

The gaming company forecasts profitability on the basis of earnings before interest, taxes, depreciation and amortization (EBITDA) in 2023, noting it’s already profitable in Michigan and New Jersey. It adds positive contributions from Arizona, Colorado, Tennessee and Virginia could arrive this year.

A total addressable market (TAM) in the U.S. and Canada that is now expected to be approximately $37 billion, driven by expansion in online sports betting and strong customer dynamics,” according to an investor presentation.

Of that $37 billion, BetMGM sees $17.6 billion derived from US sports wagering, $14.8 billion from domestic iGaming with the remainder attributable to Canada.

BetMGM Market Outlook

The aforementioned $37 billion forecast is an “at maturity” outlook. Should it prove accurate, it implies online casinos are available to 38% of the US population with online sportsbooks reachable by 80% of Americans. In Canada, the estimated figure is 65%.

Obviously, entering new markets is essential to reaching and exceeding those objectives. BetMGM is doing that, nearly doubling the amount of markets in which it operates to 23 from 12 since its 2021 investor day. The gaming company says it secured access in 30 jurisdictions and expects to enter another 10 to 15 by the end of next year.

Regarding states where sports wagering currently isn’t live or legal, MGM has access to coveted California and Texas as well as mid-size and smaller states, including Kansas, Maine, Massachusetts, Missouri and Ohio.

In November, California voters will decide the fate of two sports wagering ballot propositions – one backed by tribal casino entities and another supported by commercial operators, including BetMGM.

BetMGM Driving Cost Down

As slumping prices of sports betting equities confirm, the investment community is rapidly tiring of gaming companies spending heavily simply in the name customer acquisition.

On that note, BetMGM’s investor presentation indicates it’s on course for $250 cost per acquisition (CPA) “while spending hundreds of millions less than competitors.”

BetMGM has some advantages that online-centric rivals DraftKings and FanDuel don’t have — namely an extensive portfolio of land-based casinos. Today, there are 23 BetMGM retail sportsbooks across North America. Some of those are located pro sports stadiums and tribal casinos.

That enables BetMGM to leverage the MGM Rewards loyalty platform, which has more than 37 million members. The operator says 20% of its players visited an MGM venue prior to signing up for BetMGM and marketing return on investment is 6.5x higher for players that are sourced that way.

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