BetMGM, the US sports betting company between casino giant MGM and gaming company Entain, predicts that its revenue will grow by more than 400% next year to $ 1 billion, reflecting the rapid growth of the US market. gambling after the pandemic.
The company said it expects to have operations in 20 states covering around 40% of America’s adult population by the end of the year, as governments in crisis-hit states rush to benefit. tax revenues generated by games of chance. BetMGM is currently present in 12 US states.
“The need to generate tax revenue as we come out of Covid does not need to be discussed further,” said Adam Greenblatt, a former Entain executive who now runs BetMGM. He added that he considered BetMGM’s recent performance to be “frankly remarkable”.
Revenue is expected to increase from $ 178 million in 2020 to $ 1 billion in 2022. Net revenue in the first quarter of this year was $ 163 million, or nearly 90% of total realized revenue in 2020.
BetMGM’s two parent companies are expected to increase their investment in the business to $ 450 million this year, double the amount invested since its launch in 2018. BetMGM has said 2021 will be its “annual usage. highest cash flow ”because it invests to grow and expected to become profitable in 2023.
Last month Entain said its share of the joint venture’s loss in 2020 was £ 60million.
Although sports betting and online gambling have been legal at the federal level since 2018, state lawmakers have accelerated their efforts to introduce gambling legislation as they seek to rebuild the tax houses in the wake of the pandemic.
As a result, several gambling companies, including US market leader FanDuel, have significantly improved their forecasts for the long-term size of the market.
BetMGM said it expects the total size of the US market to reach around $ 27.6 billion with an additional potential market of $ 4.4 billion in Canada, where gambling laws are in place. also under review.
BetMGM has predicted that it is aiming to achieve a market share of between 22 and 25 percent, up from 18 percent at the end of January this year.
The joint venture found itself in the middle of a takeover battle between its two parent companies earlier in the year after MGM made an £ 8bn offer for Entain, which the group’s board of directors of games of chance listed in London rejected.
Bill Hornbuckle, head of MGM Resorts, told the Financial Times last month that BetMGM’s growth was “amazing” and that MGM had “bigger aspirations [for the business] longer term “.
Michael Mitchell, analyst at Davy investment bank, said that if Entain could secure BetMGM’s position as the second-largest online sports betting and gambling operator in the United States, it “would be worth a lot. more than what the current share price implies ”.
Since MGM’s offer in January, Entain’s share price has risen by around 19 percent.