BetMGM warns full-year loss will be bigger than previously expected
Adds JPM forecast in paragraph 3, shares in paragraph 4, details on Fanduel in paragraph 6
July 29 (Reuters) -U.S. sports betting platform BetMGM said on Monday that its losses for the year would be bigger than previously expected as it invests heavily in marketing amid intense competition in the industry.
The joint venture between MGM Resorts MGM.N and Entain ENT.L reported a core loss of $123 million for the first half of the year, and said it expects losses in the second half to be similar to those levels.
Analysts at JP Morgan said the second-half forecast implied an annual core loss of about $250 million, compared with a JPM estimate of about $93 million in losses.
Shares in Entain dropped nearly 10% to their lowest since April 2020, when COVID lockdowns hit. MGM was down 1% in U.S. premarket trading.
BetMGM made about a $67 million loss for 2023 although it said it turned a profit for the second half of 2023.
Founded in 2018, BetMGM has been stepping up its investments and expanding its presence in North America as it faces tough competition in the market with bigger players like Flutter's FLTRF.L Fanduel and Draftkings DKNG.O.
BetMGM CEO Adam Greenblatt said: "2024 is a year of investment, focusing on improving our customer experience and stepping up our level of investment in players."
Rival Flutter FLTRF.L in May had reported a first quarter core profit of $26 million in the United States. Fanduel increased its share of the sports betting market to 47% in the first three months of 2024.
BetMGM said it had a 13% market share in the U.S. and Ontario, Canada across Sports Betting and iGaming as of the end of the second quarter, which was down by a percentage point from the first quarter.
BetMGM is the third-largest online gambling company by revenue in the United States. It had previously said it was targeting a core profit of $500 million by 2026, but said on Monday that it expected to achieve the milestone in the "coming years".
"We believe today's statement suggests that, with the top spots in the U.S. market now secured by FanDuel and Draftkings, and with some other brands creeping up in some states, marketing intensity in U.S. online sports betting and gaming will not reduce," Roberta Ciaccia analysts at Investec said in a note.
Ciaccia added that it would be challenging for BetMGM to hit its long-term target of a more than 30% EBITDA margin.
Reporting by Radhika Anilkumar in Bengaluru; Editing by Subhranshu Sahu, Jacqueline Wong and Susan Fenton
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Penafian: Entiti XM Group menyediakan perkhidmatan pelaksanaan sahaja dan akses ke Kemudahan Dagangan Atas Talian, yang membolehkan sesorang melihat dan/atau menggunakan kandungan yang ada di dalam atau melalui laman web, tidak bertujuan untuk mengubah atau memperluas, juga tidak mengubah atau mengembangkannya. Akses dan penggunaan tersebut tertakluk kepada: (i) Terma dan Syarat; (ii) Amaran Risiko; dan Penafian Penuh. Oleh itu, kandungan sedemikian disediakan tidak lebih dari sekadar maklumat umum. Terutamanya, perlu diketahui bahawa kandungan Kemudahan Dagangan Atas Talian bukan permintaan, atau tawaran untuk melakukan transaksi dalam pasaran kewangan. Berdagang dalam mana-mana pasaran kewangan melibatkan tahap risiko yang besar terhadap modal anda.
Semua bahan yang diterbitkan di Kemudahan Dagangan Atas Talian kami bertujuan hanya untuk tujuan pendidikan/maklumat dan tidak mengandungi – dan tidak boleh dianggap mengandungi nasihat kewangan, cukai pelaburan atau dagangan dan cadangan, atau rekod harga dagangan kami, atau tawaran, atau permintaan untuk suatu transaksi dalam sebarang instrumen kewangan atau promosi kewangan yang tidak diminta kepada anda.
Sebarang kandungan pihak ketiga serta kandungan yang disediakan oleh XM, seperti pendapat, berita, penyelidikan, analisis, harga, maklumat lain atau pautan ke laman web pihak ketiga yang terdapat dalam laman web ini disediakan berdasarkan "seadanya" sebagai ulasan pasaran umum dan bukanlah nasihat pelaburan. Sesuai dengan apa-apa kandungan yang ditafsir sebagai penyelidikan pelaburan, anda mestilah ambil perhatian dan menerima bahawa kandungan tersebut tidak bertujuan dan tidak sediakan berdasarkan keperluan undang-undang yang direka untuk mempromosikan penyelidikan pelaburan bebas dan oleh itu, ia dianggap sebagai komunikasi pemasaran di bawah peraturan dan undang-undang yang berkaitan. SIla pastikan bahawa anda telah membaca dan memahami Notifikasi mengenai Penyelidikan Pelaburan Bukan Bebas dan Amaran Risiko mengenai maklumat di atas yang boleh diakses di sini.
