BetMGM making “excellent progress” as revenue up 76% YoY in Q1

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BetMGM’s total net gaming revenue for Q1 has rocketed by 76% compared to the same period 12 months previous, according to the leadership of its joint parent company Entain

Providing investors a trading update for Q1, Entain noted that BetMGM’s growth far outstripped any other area of its business, largely driven by strong trading during both the Super Bowl and March Madness

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Q1 revenue for the MGM Resorts joint-venture was $470m, which is in line, if not a little stronger, than Entain and MGM’s full-year guidance of $1.8bn – $2bn. 

The group reiterated BetMGM’s market-leading position in the igaming space, with 28% market share, whilst noting that in same-state online sports betting, NGR growth was 100% YoY. Mixing igaming and sports betting, BetMGM holds 17% of the US market. 

Whilst analysts hinted that on Q1 performance, BetMGM could far surpass expectations, CEO Jette Nygaard-Anderson played down such talk but did express her pride in the venture’s performance. 

Nygaard-Anderson explained: “We’re not changing guidance by now, but very pleased with where we are. Another key number is of course, that we are growing in same state, online sports betting by approximately 100%. That’s another killer number for us when we look at the business. So where we are right now very happy with the NGR numbers, and very happy with the performance of the business.”

Leadership also hinted that it seeks to continue to develop the BetMGM product, particularly on the sports betting side, as it aims to maintain its spot as a top-three operator and gain 25% market share. 

Nygaard-Anderson touched on several key product developments that will come later this year, as BetMGM keeps its eyes focused on profitable sustainable growth. 

She said: “We continue to be laser-focused on the sports product. I really see that as an enormous opportunity for us. In-play percentage of handle is growing. Parlays are growing in terms of bet counts, also same-game parlay is growing, but there’s more opportunity for us here. 

“So, as we look ahead to the year, we are excited to continue to improve our products on the sports side and also looking to hopefully launch single account single wallets later in the year.”

Same-game parlays increasing

As Entain explained that parlays and same-game parlay betting is increasing as a percentage of total bets, analysts were eager to know what the key driver of this was, and whether product development was behind this growth. 

Rob Wood, CFO of Entain, played this down, explaining that Entain’s core customer mix comprises “recreational” bettors who are more interested in playing with same-game parlay products. 

Doubling down on the recreational customer, Wood noted that these bets are helping to increase total NGR: “ That is more a reflection of the customer mix than particular product development but yes the multiples mix is ticking up all the time and things like same game parlay are getting better and more appealing to customers. So that’s helping, but in my view, the primary driver is an increasing recreational mix.”

Less reliance on bonuses and promo credit

A key topic in the US sports betting industry this year has been that of promo credit, bonuses, and “risk-free” bets. 

Nygaard-Anderson was asked about the impact of bonuses on BetMGM revenue, as well as how it compares to previous years, however, would not be drawn down into specific figures. 

She did, however, concede that bonus credits were impacting total GGR share, but that the group accepts this as it continues to aim to attract and retain customers. 

“We’ve been implementing bonus optimization measures through most of 2022 and then of course into 2023, ensuring that we are rewarding and retaining the valuable customers we have all built on the Entain data analytics experience, to focus on maximizing the player metrics here,” Nygaard-Anderons outlined. 

“Of course, this will inevitably impact the GGR share and we knew this upfront but we are comfortable with this as we’re growing.”

Finally, the CEO told investors that BetMGM is becoming less reliant on bonuses after capturing the benefits in previous years. She concluded: “We’re also delivering greater margins in GGR to handle and that grew significantly during 2022 and we’re seeing the bonus share come down. 

“Our actives are growing; our player economics are very strong, and then more importantly, our cohort built in line with expectations, which is why we are on track to deliver profitability in the second half.”