Despite a litany of challenges for BetMGM in 2023, MGM Resorts CEO Bill Hornbuckle remains confident in the venture’s near-term growth, as the digital gaming operator sharpens its focus on product improvement.
Addressing Wall Street analysts on MGM Resorts’ 2023 fourth-quarter earnings call, Hornbuckle emphasized that BetMGM made considerable strides last year with its technology roadmap following the rollout of a new app design. Hornbuckle is also optimistic with the venture’s single-wallet transition, as BetMGM continues integrations on digital sports betting, horse racing, and online casino offerings.
With 2023 in the rear-view mirror, BetMGM now has single-wallet capabilities available in most of its North American jurisdictions. As of Wednesday, BetMGM is live in 28 jurisdictions throughout the continent, including Ontario and Puerto Rico.
For the second half of 2023, BetMGM generated profitability for the first time over a six-month period. As for the 12-month period, the venture also hit the upper limit of its guidance for a key revenue metric. In 2023, BetMGM generated revenue within a range of $1.8 billion and $2.0 billion, MGM Resorts Chief Financial Officer Jonathan Halkyard said on the call.
Mixed results for the Super Bowl
MGM Resorts held the earnings call two days after Las Vegas hosted the Super Bowl for the first time in city history. A number of MGM casino resorts are located in proximity to Allegiant Stadium, where the Kansas City Chiefs defeated the San Francisco 49ers to win the Lombardi Trophy for the second consecutive season.
In the week leading up to the Super Bowl, the NFL set up shop at the Mandalay Bay Convention Center where a bevy of mainstream networks aired broadcasts from Radio Row. Owned by MGM Resorts, Mandalay Bay is a top destination for football fans in part due to a pedestrian bridge from the casino to the stadium.
While MGM Resorts management indicated that BetMGM fared well on prop wagers, the game results were not overly favorable, Truist Securities analyst Barry Jonas wrote in a research note. On the moneyline, BetMGM had a rough evening, as approximately 75% of bettors took the Chiefs to repeat.
Sign Up For The Sports Handle Newsletter!
BetMGM had better results with the total, where the line closed at 47.5. In the hours leading up to the Super Bowl, a plethora of leading sports betting apps moved the line to 46.5, a number pushed down by late-sharp money on the under, according to ESPN.com. The Chiefs prevailed 25-22 on a touchdown by Mecole Hardman with three seconds left in overtime.
“It was a bad Super Bowl for the sportsbook. Many bettors had the @Chiefs winning and overs on popular player props.”
– Tristan Davis, Senior Trader, #BetMGM pic.twitter.com/HT4aWW9zae
— John Ewing (@johnewing) February 12, 2024
Nevertheless, BetMGM cleared a number of benchmarks for the NFL’s premier event. In total, BetMGM generated record numbers in new customers, brand exposure, and wagering volume, the venture said in a statement.
- 72% increase in new customers year-over-year
- 30% increase in Big Game wagers placed year-over-year
- 51% increase in number of female bettors wagering on the Big Game
For the Super Bowl, BetMGM garnered 68% of market share on in-stadium wagers made inside of Allegiant Stadium, CEO Adam Greenblatt told Sports Handle. It is important to note that neither DraftKings, nor FanDuel has online sports betting market access in Nevada.
Earnings results
For the three-month period ending Dec. 31, 2023, MGM Resorts reported consolidated net revenue of $4.3 billion, primarily due to an increase at its MGM China property associated with the removal of COVID-19 related entry restrictions in Macau. As a result, MGM topped analyst estimates of $4.12 billion. Back in the states, MGM Resorts generated net revenues of $2.4 billion from its Las Vegas Strip properties, up from $2.3 billion in the year ago-quarter. MGM Resorts reported earnings per share of $1.06, beating analysts’ estimates of $0.71.
On Wednesday, MGM Resorts closed at $42.83, down 6% on the session. The company ended the day as one of the worst performers on the S&P 500. While MGM has experienced sharp volatility over the last 52 weeks, the stock traded around $43 a share following the company’s full-year 2022 earnings call last February.
Hornbuckle addressed analysts, as rumors swirl of a potential breakup of BetMGM. Launched shortly after the historic PASPA ruling, BetMGM is a 50-50 joint venture between MGM Resorts and European gaming giant Entain. Hornbuckle informed analysts that he met with Stella David, Entain’s interim CEO, at a gaming conference last week in London.
Still, he remained close to the vest on a possible acquisition of Entain. Instead, he doubled down on the importance of product improvement as BetMGM lags behind FanDuel and DraftKings in online sports betting market share. Moving forward, BetMGM plans to re-invest the profits to drive customer acquisition and aid player retention.
BetMGM has set long-term targets of $500 million in EBITDA for full-year 2026.
“This is a critical year I think for all of us,” Hornbuckle said in response to a question from JP Morgan analyst Joe Greff. “It’s about product, product, product, and focus.”
Read the original article Here
Visit the Association of Certified Gaming Compliance Specialists Here