BetMGM boosts annual forecast on iGaming, online growth

Entain's U.S. sports-betting joint venture, BetMGM, has increased its fiscal 2025 revenue forecast to at least $2.6 billion and core earnings to at least $100 million, citing strong growth in iGaming and online sports divisions. This represents an increase from the previous revenue guidance of $2.4 billion to $2.5 billion and a shift to positive EBITDA, reflecting BetMGM's successful expansion in the e-betting market.

Analysis

BetMGM, the U.S. sports-betting joint venture of Entain (ENT.L) and MGM Resorts (MGM.N), has materially upgraded its financial forecasts for fiscal year 2025, now anticipating net revenue of at least $2.6 billion and core earnings of at least $100 million. This marks a notable increase from its prior revenue guidance of $2.4 billion to $2.5 billion and an improvement from the previous expectation of achieving positive earnings before interest, taxes, depreciation, and amortization (EBITDA). The enhanced outlook is directly attributed to strong growth within BetMGM's iGaming and online sports divisions, reflecting the venture's successful expansion and increasing capitalization on the burgeoning U.S. e-betting market. This development indicates a stronger trajectory for both revenue generation and profitability for the joint venture, aligning with the strongly positive sentiment surrounding this announcement.

Key Decisions for Investors

• Investors in MGM Resorts (MGM.N) should recognize the positive implications of BetMGM's upgraded fiscal 2025 guidance, which points to accelerated revenue growth and stronger-than-expected profitability from this key joint venture.
• The outperformance in iGaming and online sports betting underscores a significant growth engine for BetMGM, which is expected to contribute more substantially to MGM Resorts' overall financial results and potentially enhance its valuation.
• Continued monitoring of BetMGM's market penetration, competitive positioning, and the evolving regulatory environment in the U.S. digital gaming sector remains crucial for assessing the sustainability of this growth and its impact on MGM.