BetMGM will use the rest of 2024 to focus on tech reinvestment and player acquisition, MGM Resorts International's chief executive officer reaffirmed during a webinar Tuesday.
After posting its first profitable quarter in history in 2023, BetMGM is turning to new technologies and a revamped customer acquisition approach, CEO Johnathan Halkyard said during the Deutsche Bank-hosted webinar. He added that new investments in the sports betting product will help BetMGM return to profitability in 2025 or 2026.
“We've made great progress this year at BetMGM on all of those fronts,” Halkyard said.
Single wallet, new tech platform spur growth
Halkyard said BetMGM's key growth drivers are a new single sports betting wallet and the further acquisition of a new sports betting tech provider.
In August, the company introduced a single wallet across all 22 live mobile sports betting states, Washington D.C., and Puerto Rico. Instead of logging out when players enter new jurisdictions and funding each account separately, customers can access these funds in any state where the book accepts bets.
BetMGM will focus throughout 2024 on investing in tech and customer acquisition as national market share percentage has declined, $MGM CEO Jonathan Halkyard said during a Deutsche Bank webinar today, with a goal to return to profitability in 2025 or 2026
— Ryan Butler (@ButlerBets) September 24, 2024
This is especially important in Nevada, Halkyard said, which remains one of the nation’s highest-grossing sports betting states. Without naming them, MGM’s CEO said this also gives it a leg up on its major Nevada competitor, Caesars, which doesn’t yet have cross-state functionality.
MGM has roughly 12 million room nights occupied in Nevada each year. It is the state’s largest employer.
“And now with single account, single wallet, it means that when you open an account and deposit funds at our resorts in Nevada, you can then go back to your home in Denver or in Indiana and continue to engage with BetMGM,” Halkyard said. “So it's really leveraging that customer acquisition outlet that we have in Nevada.”
Nevada is also the only state where BetMGM offers statewide mobile wagering without having to compete against national market share leaders FanDuel and DraftKings.
European gaming giant Entain, which runs BetMGM in the US alongside MGM in a 50/50 joint venture, acquired sports betting analytics platform Angstrom Sports in 2023. The company specializes in pricing single-game parlays, a growing – and lucrative – offering for American books.
With competitors able to accept standard point spread, moneyline, and totals bets, sportsbooks are increasingly trying to differentiate themselves by offering more bets around individual player props. Sportsbooks are also adding more bets such as “next basket” scored in basketball, which requires advanced tech capabilities to properly appraise odds and stay online in a fast-paced live digital betting environment.
More crucially, these bets offer higher profit margins – especially when staked together in parlays.
“It's important business for BetMGM since it was really introduced into our stream back in May and now with football season it is a pretty important part of the product offering,” Halkyard said.
National environment context
BetMGM’s pivot from profitability to investment comes as U.S. sports betting expansion has begun to stagnate compared to the rapid growth in recent years and the national environment has become dominated by a few major operators.
MGM doesn't expect to make any major digital acquisition deals in the near future following moves for LeoVegas and Tipico, CEO Jonathan Halkyard said during a webinar today; he said the company also isn't looking at any pending new brick-and-mortar property acquisition deals
— Ryan Butler (@ButlerBets) September 24, 2024
Since the Supreme Court struck down the federal wagering ban in 2018, 38 states (plus D.C. and Puerto Rico) have legalized at least one sportsbook. Thirty states allow statewide mobile wagering, which see far greater handle than the eight states with only in-person sportsbooks. No state has legalized sports betting so far in 2024.
BetMGM, along with more than two dozen competitors, rushed to expand into as many new markets as possible. Better-funded companies spent hundreds of millions on promotions, marketing, and free bets in the first few years of legal betting outside Nevada.
During that process, more than a dozen books have left the U.S. Nine operators now make up more than 99% of nationwide handle.
That 99% is dominated by DraftKings and FanDuel. The two daily fantasy sports pioneers have combined to capture roughly two-thirds of the U.S. national market share, driven by massive financial expenditures and the widest range of bet offerings; both also have nationwide single wallets.
BetMGM has typically held the No. 3 national sports betting market share slot ahead of Caesars, its other major Nevada-based casino operator turned digital sportsbook manager. Hard Rock Sportsbook, boosted by its Florida monopoly, is believed to be at or near the two Nevada operators’ national market share totals.
Hard Rock, along with bet365 and Fanatics Sportsbook, have begun to chip away at BetMGM’s market share ratio. Regional casino operator Penn Entertainment also hopes to build up its market share via its ESPN BET-branded platform set to launch in New York later this month.
The consolidated competition has led MGM officials to revamp their digital sportsbook offerings as part of a larger customer acquisition tool to complement its brick-and-mortar gaming portfolio. How well BetMGM can implement these new advancements in the coming years will help determine if the long-time No. 3 operator will return to profitability or fall behind its competitors.
