BetMGM Raises 2025 Guidance After Blockbuster Q3

BetMGM, jointly owned by two of the world's largest casino operators, MGM and Entain, were out with blockbuster earnings this week. Third-quarter numbers were up across both online casino and sports betting, with net revenue coming in at $667 million, an increase of 22% from last year.

While online casino certainly had a great quarter, up 21%, it was sports betting, competing against relatively low hold comparables last year, that led the charge, up a staggering 36%. This flowed straight through to the bottom line, as EBITDA was actually a cash flow positive $57 million vs. a slight loss for last year’s third quarter.

Probably the headline number of the entire report was that BetMGM increased 2025 guidance to $2.75 billion, while also boosting expected EBITDA to $200 million. And that this would allow the online casino operator to distribute a minimum of $200 million to Entain and MGM, which would obviously be accretive directly to EBITDA.

Interestingly, even when we talk about several billion a year in revenue, and while BetMGM is clearly one of the best online casinos and sportsbooks, they currently only own 21% of the online casino market in the US and just 8% of the online sports betting market, leaving plenty of room for growth.

And it’s clear that both innovations to the core functionality of the apps as well as some very successful marketing, like this past quarter’s Make it Legendary ad campaign, are indeed driving growth, with active monthly users up 21% for the three months ending in September.

The company also credited some omnichannel slot breakouts, such as Rakin’ Bacon and the Wizard of Oz franchises, the latter of which has seen a resurgence of interest since the new Wizard of Oz slot premiered at the Sphere in Las Vegas last month.

Another clear takeaway is that prediction markets like Kalshi and Polymarket, which have moved strongly into “trading” outcomes of sporting events, are not yet having a meaningful impact. The company saw gross sports betting handle grow 13% to $3.1 billion, while revenue per active user grew nearly 50%.

CEO Adam Greenblatt didn’t pull any punches when asked during the earnings call about the new upstart operations, however, calling them “in essence, illegal sports betting” and questioning their responsible gaming resolve, while other BetMGM officials took pains to underscore the company’s dedication to regulated gaming and pointed out the ever growing list of state regulators warning licensed sportsbook operators away from prediction style markets and the ensuing lawsuits that are starting to be tossed around in state courts.

Despite both rumours and increasing pressure from activist investors at Entain to at least consider selling all or part of its BetMGM holdings to unlock shareholder value, the company which saw basically flat revenue growth of around 4% if BetMGM was removed for the quarterly results, seems agnostic on that prospect, on the surface at least.

When the push to divest started in early spring, however, much of the reasoning was that little of BetMGM’s success was reflected in the parent’s stock price, but Entain has surged nearly 50% in the past 6 months, taking much of the air out of that trial balloon.

Still, with a valuation between $2.5 and $6 billion dollars for just their half of this money printing machine, there will still be continued calls for at least a frank discussion. But expect that with the continued return of excess cash, almost certainly in the hundreds of millions per year, along with robust double digit growth and only seven states currently allowing legal online casinos, management will continue to take a wait and see attitude to any potential sale.