BetMGM spent heavily on marketing and customer acquisition in the first half of 2024 as it looks to consolidate its third-place ranking in the U.S. market and close the online sports betting market chasm between itself and DraftKings and FanDuel.
The company’s adjusted EBITDA figure $123 million in losses reflected the high expenditure, which BetMGM noted was “consistent with expectations” of an investment year.
BetMGM’s net revenue has risen 6% year-over-year in H1 2024 to hit $1 billion and climbed 9% YOY and 3% quarter-over-quarter in Q2 2024. Q2 2024 also saw BetMGM’s market share hold firm after losing some ground in consecutive previous quarters.
“The first half of this year has been very important in laying the groundwork for BetMGM’s future,” CEO Adam Greenblatt said in a release.
“2024 is a year of investment, focusing on improving our customer experience and stepping up our level of investment in players. We are encouraged to see this strategy delivering accelerating momentum.”
iGaming critical for BetMGM
During the first half of the year, BetMGM expanded its U.S. reach by launching online sports betting in North Carolina in March and D.C.-wide in July. That takes it to 29 markets in North America, including five for iGaming.
BetMGM reported a combined online sports betting and iGaming market share of 13% in the U.S. and Ontario, and it holds approximately 22% of GGR in iGaming alone.
Speaking on MGM Resorts International’s earnings call on Wednesday, CEO Bill Hornbuckle said the company has confidence in its BetMGM joint venture with Entain. He added that it’s vital that BetMGM does not lose “precious” iGaming share in the U.S.
“We have stated that 2024 would be an investment year, recognizing that we’ve lost shares in sports and that it was impacting our leading market position in iGaming, we righteously decided to invest heavily into our sports product and continue to invest in customer acquisitions for iGaming, so long as we saw both market growth and overall market share growth.
“For the record, BetMGM was also profitable in the second quarter of 2024, driven by our iGaming business, which annually contributes about $400 million to the overall business.”
New features and partnerships boost BetMGM
Hornbuckle also spoke to the importance of BetMGM improving its sports product through its partnership with Angstrom. The collaboration has already yielded new markets and features powered by in-house same-game parlay and SGP+ products. Those investments were rewarded by a 40% YoY increase in active users who placed an MLB SGP bet this season, while the volume of weekly MLB SGP bets doubled YOY. BetMGM will unveil a range of new products heading into the NFL and NCAAF seasons.
As well as new features, there were new partnerships. Most notably, BetMGM is now the official odds provider of the Associated Press and has struck an exclusive ambassador partnership with Brian Christopher Slots for all online regulated markets.
There was also an interesting note from Hornbuckle about live dealer games. That category represents 15% of all bets on BetMGM, and he suggested the brand “can have some real fun with that down the road with tying celebrity to it… I’m excited by the opportunity to play with the notion.”
BetMGM on track for revenue growth towards 2025
For now, the spending drive will continue. BetMGM said it expects to lose a similar amount of EBITDA in the second half of this year to round out around $250 million total in negative earnings for 2024. It also anticipates “greater than planned” marketing spend on iGaming in the second half of this year, which it plans to fund using bank debt.
As a result, the company has pushed back its aim of $500 million of EBITDA in 2026 to “the coming years.” Hornbuckle stressed that MGM will watch its BetMGM investments closely to make sure they are paying off. “Frankly, if it’s not working, we’re going to pull back… It’s a key time for the business and for the company in the next six or seven months.”
“We have exceeded our goals for both acquisition and retention, which should lead to higher year-over-year revenue growth for the second half of this year into 2025,” said Greenblatt.
“In the big picture, we love what BetMGM has done for our brand,” added Hornbuckle. “We love the long-term prospects and we enjoy having a partner during this development stage that is equally focused on the business. We are patient and have a strong belief in the growth of this business now and long into the future.”
