BetMGM to benefit from $450m investment influx in 2022
Joint venture partners MGM and Entain commit to multi-million-dollar investment over coming year as US top-three operator looks to achieve $1.3bn net revenue target
MGM Resorts International and Entain will invest more than $450m into the US sports betting brand during 2022, the BetMGM parent companies have revealed.
Delivering a joint update on the US sports betting brand, which the two companies own on a 50/50 joint venture basis, the duo confirmed they were “wholly supportive” of BetMGM, citing continuing success, strong performance and market leadership in the US.
Funds are expected to be deployed in several areas, augmenting expected US sportsbook launches in Illinois and Louisiana during Q1 2022, as well as a retail sportsbook offering in Puerto Rico.
BetMGM has also confirmed its aim of launching an online sportsbook and igaming offering in the Canadian province of Ontario later this year.
Other areas of investment include expansion of the newly launched Borgata Bingo product and the BetMGM Racing app in additional states and product enhancements to existing portfolio assets.
In addition, BetMGM has suggested the funding will be used for enhancements to its “returns-driven” marketing strategy, while expanding the MGM Resorts loyalty program into more of its portfolio.
The multi-million-dollar investment brings total investment by MGM and Entain to $1.1bn since the launch of the BetMGM brand in 2018.
As justification, the operators have confirmed their expectation that BetMGM’s full year 2022 net operational revenue will reach more than $1.3bn, with a US market share of 20%-25% in both igaming and sports betting in the US.
More specifically in relation to igaming, BetMGM has estimated an igaming market share of 30% in the three months up to November 2021 in each of its operational markets.
It has said the BetMGM brand is in line to reach approximately 40% of the US population independent of launches in Illinois and Louisiana.
Providing an update on 2021 full year progress, BetMGM highlighted “strong” financial performance, with a net operational revenue expectation of $850m – something the firm suggested was ahead of management expectations and an increase of almost five times year on year.
In line with this increased expectation, BetMGM has cited same state growth in net revenue from operational areas of 140% year on year, with a forecasted cost per acquisition in line with management forecasting and in expectation of achieving long-term player acquisition costs of $250.
Lastly, the US sports betting operator has suggested player values are in line with its expectations, which are based on a long-term total addressable market (TAM) in North America of $32bn.