Mobile Betting Boosts BetMGM Revenues

Article by : Helen Jan 29, 2021

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The return of professional and NCAA sports during the final quarter of 2020 should prove to be especially beneficial for BetMGM’s revenues. Because live sports returned sooner than many anticipated during the last quarter of the year and several states accelerated plans to legalize online gaming, BetMGM says net gaming revenues exceeded prior expectations and could top $180 million.

BetMGM officials previously estimated between $150 million and $160 million in net gaming revenues for 2020. They say its customer engagement doubled during the fourth quarter as more sports resumed competitions.

MGM Resorts International and business partner Entain, formerly GVC Holdings, jointly own BetMGM, launched in 2019 in New Jersey. BetMGM expanded to Nevada in March 2020 – just in time for the COVID-19 pandemic to bring organized sports and casino gaming to a halt. Instead of taking advantage of the annual March Madness wagering on the NCAA men’s basketball tournament, BetMGM activity greatly declined. MGM and Entain invested a combined $450 million into BetMGM, which now operates in 11 states. The brand is poised to add several more as states like Michigan and Iowa embrace mobile betting. Both states recently allowed mobile betting, and MGM and Entain are already moving in both states.

MGM has a casino and sportsbook in Detroit and was prepared to make the statewide rollout across Michigan as soon as state officials gave the okay to do so. That happened in January. BetMGM is already among the top mobile apps in that state and could do the same in Iowa.

MGM Resorts last year made two offers to buy Entain, which was recently rebranded from GVC Holdings. Entain declined an initial $10 billion offer, saying it did not fully value the firm. MGM officials recently made a new offer totaling $11 billion in cash and shares so that Entain would maintain an investment interest in BetMGM, but that deal also fell short.

Officials at MGM and Entain recognize the massive business opportunity facing legal sports betting operators with the U.S. federal government and most states on board with legal sports betting. The American Gaming Association says people wager about $150 billion on sports through illegal bookmakers and offshore casinos each year. Legal wagering protects bettors while enabling states and the federal government to reap tax revenues.

The COVID-19 pandemic further affirms the need to embrace new technologies and remotely deliver services to people in their homes whenever possible. According to Data Bridge Market Research analysts, the global sports betting market is poised to grow by about 10 percent annually through 2027. That level of growth could roughly double the current amounts wagered in less than a decade, and the United States is a mostly wide-open market. Others making significant investments in the growing mobile sports betting market include Penn National Gaming and Caesars Entertainment.

Like MGM, Caesars is looking to take possession of its mobile gaming partner. UK-based William Hill operates mobile gaming for Caesars, which wants to take control of it. Caesars recently announced the waiting period has concluded to comply with federal antitrust laws.

Gaming authorities in West Virginia and Mississippi recently okayed the merger, which still needs approval from several state gaming commissions and a UK high court. Caesars intends to conclude the merger in March.

With two of the biggest casino operators on the Las Vegas Strip embracing mobile sports betting, Las Vegas Sands likely will follow suit. That is especially true with former chairman Sheldon Adelson recently passing on. Adelson generally opposed online and mobile gaming in favor of brick-and-mortar operations, like those in Las Vegas and Macau.