MGM president: Roar Digital to turn a profit in next three to five years
MGM Resorts and GVC likely to invest up to $30m each on expansion into new states like Michigan and Nevada
GVC’s JV with MGM Resorts, Roar Digital, is forecast to turn a profit between 2023 and 2025, MGM Resorts president William Hornbuckle revealed during yesterday’s Q4 earnings call.
Hornbuckle said it would be realistic for the two firms to invest up to $30m each “over the next couple of years”, with each new state costing up to $2m to enter.
“If this whole thing costs both partners $100 million it will be a lot,” Hornbuckle said.
“If we invest over the next couple of years $30m each that’s probably realistic, but we had hoped by 2023, pushing into 2025, to go into profit.”
Hornbuckle said the BetMGM app would launch in Nevada next week, although MGM will continue to run its retail sportsbook separately to Roar Digital.
“An overview around BetMGM on the app, as well as a branding exercise throughout all of our [retail] sportsbooks will take place over the next three months,” Hornbuckle told analysts.
Roar has its sights set on Michigan as a key state, particularly as it is home to 21 Buffalo Wild Wings restaurants, which it signed a marketing deal with last year.
“We should be [in Michigan] – we’ve got a huge retail presence and [the state] accepts online gaming and casino which we think will be a unique opportunity,” Hornbuckle said.
On Roar’s performance in New Jersey, Hornbuckle said the JV got off to a slow start, but now has 150 employees working to “push this forward.”
According to Eilers & Krejcik Gaming estimates, BetMGM has a 1% share of the New Jersey betting sector.
The two companies invested $100m each back in 2018 when they established the JV.
GVC CEO Kenny Alexander told investors in January the US business saw online revenues “grow strongly throughout Q4 19, and the group is excited about the outlook for 2020 and beyond.”