Online Sports Betting App BetMGM Turns Profitable With Sales Rising

BetMGM, an online sports betting app, turned a profit in the latest quarter, hitting that milestone sooner than expected.

BetMGM, an online sports betting app, turned a profit in the latest quarter, hitting that milestone sooner than expected. (AFP)

BetMGM, an online sports betting app, turned a profit in the latest quarter, hitting that milestone sooner than expected.

The company, a joint venture between MGM Resorts International and Entain Plc, said Wednesday it achieved the positive result for the second quarter. The company previously projected it would reach that goal in the second half of the year.

Shares of Entain rose 4% in London, while MGM Resorts added 1.1% in New York.

BetMGM said optimizing player bonuses contributed to its strong financial performance, suggesting the turnaround hinged in part on cost controls. First-half revenue rose 25% in states where BetMGM was already operating.

The company remains on track to deliver $1.8 billion to $2 billion in 2023 revenue and expects to become self-sustaining in the second half of the year, with no more equity investment expected from its owners.

Since 2018, when the US Supreme Court struck down a federal ban on sports betting, gambling companies have raced to attract online players with expensive advertising campaigns and promotional offers of free bets. That's led to large losses, and the companies are now under pressure from investors to become profitable.

BetMGM, which was founded in 2018, has an 11% share of the online sports betting market, the company said. It trails the two largest players in the industry: DraftKings Inc. and FanDuel, a division of Flutter Entertainment Plc.

Speculation has risen recently that MGM will again pursue a merger with Entain, a proposal that was rejected by the latter in 2021. On July 24, Citigroup analyst Monique Pollard wrote that a second bid was “hard to rule out.”