Think of market leaders in mobile sports betting and iGaming, and FanDuel and DraftKings comes to mind. But at its Investor Day presentation April 21, BetMGM says don’t overlook their company.
The takeaway was that BetMGM could be number two in market share and will turn a profit by 2023.
After a slow rollout at the end of 2019, CEO Adam Greenblatt pointed out within the past 12 months, BetMGM expanded from three to 12 states and established market access in 24 states with more in negotiations. BetMGM, operated by New Jersey-based Roar Digital, has four retail operations. The company also has a dozen partnership and market deals with teams and will build a retail sportsbooks at Nationals Park.
“There is no path to leadership without participation in all states that matter,” Greenblatt said. “BetMGM is able to win in the heavyweight world of online sports and are asserting our dominance in iGaming.”
To fuel the expansion, co-owners MGM Resorts International and Entain Plc. expect to pump $450 million into the company this year.
As for the initial rollout, issues included less than acceptable technology, European odds and a lack of a successful marketing campaign. BetMGM relied on its own customer database before launching a marketing campaign with actor Jamie Foxx in the past 12 months.
“Bottom line, we continue to believe the BetMGM asset is undervalued,” Macquarie Securities gaming analyst Chad Beynon said.
Between January 2020 and January 2021, BetMGM debuted in 10 states, increasing first quarter revenue to $163 million, according to Legal Sports Report. The revenue skyrocketed 430 percent compared to the same quarter in 2020. BetMGM captured a 22 percent market share.
“Based on total gross gaming revenue, we estimate BetMGM has overtaken second overall position in February,” Greenblatt said. “We have more than doubled market share since October.”
The company expects to be in operation in 20 states within another 12 months. Greenblatt said the North America’s market, which includes the U.S. and Canada, could reach worth $32 billion in revenue.
“BetMGM outlined a credible and multi-faceted omni-channel approach to customer acquisition, which represents one competitive advantage,” J.P. Morgan gaming analyst Joe Greff told investors. “Specifically, MGM-sourced players (those who registered at an MGM physical location) bet 50 percent more on average, versus non-MGM-sourced players.”
BetMGM expects most of the revenue to result from iGaming, but sports betting could surpass that. New Jersey is expected to reach profitability by the third quarter this year with Michigan doing the same in two years. Since the company went live in Michigan in late January, BetMGM has secured 37 percent of total online gross gaming revenue and claims the top spot in Colorado.
“As we look to the future, we expect new states to look like Michigan and Colorado,” CFO Gary Deutsch said.
