BetMGM Forced to Adjust EBITDA Timeline Due to Prediction Market Growth

The American gambling landscape is undergoing a significant shift, forcing one of its major players to rethink its financial roadmap. BetMGM, the joint venture between MGM Resorts and Entain, has been compelled to adjust its timeline for achieving a long-term goal of 500 million dollars in adjusted EBITDA. The operator now admits it is prudent to assume this target will be met beyond the previous 2027 expectation, citing the intensifying pressure from prediction markets and the resulting regulatory complexity in the United States.

This decision comes despite a solid performance in the second quarter, where BetMGM reported net revenue of 711 million dollars, a 3 percent year-on-year increase. The iGaming sector remains the powerhouse of the company, generating 483 million dollars and showing an 8 percent growth. However, the adjusted EBITDA for the quarter fell by 15 percent to 74 million dollars. The divergence between growing revenue and shrinking profit margins highlights the costs associated with maintaining market share in a environment where non-traditional betting platforms are gaining traction.

Numbers and facts

Financial data for the first half of the year provides a clearer picture of the challenges ahead. BetMGM reached a net revenue of 1.41 billion dollars, up 4 percent from the previous year. The iGaming segment, contributing 964 million dollars, holds a significant 20 percent market share in active jurisdictions. In contrast, online sports betting stagnated, bringing in 228 million dollars in the second quarter, which was largely in line with the prior year. The company noted that while player engagement remains high, the cost of player generosity and incentives has offset handle growth.

User metrics also show a downward trend that investors are watching closely. Average monthly active users dropped by 6 percent in the first half of the year, falling to 925,000. During the second quarter alone, the number was 875,000, a 3 percent decline compared to 901,000 in the same period last year. BetMGM attributes this to a strategy focused on higher-value customers rather than mass-market volume. Meanwhile, competitors like DraftKings are seeing massive margin expansions, reporting a 1,300 bps increase in digital margins largely driven by prediction market activity.

Background

Prediction markets, which allow users to bet on political events or economic outcomes, have become a major point of contention in the US. Companies like DraftKings and FanDuel are leaning into these markets to target users in states where traditional sports betting is not yet legal. However, BetMGM CEO Adam Greenblatt has taken a firm stance against this trend, aligning with regulators who worry about the lack of responsible gambling safeguards on these exchanges.

"We remain steadfast in support of state regulators, attorneys general, and Indian gaming entities that express serious concerns about prediction markets and how they circumvent the robust regulatory frameworks, responsible gambling requirements, and information sharing protocols pulled collaboratively by our industry partners." - Adam Greenblatt, CEO of BetMGM

Despite the hurdles, BetMGM is not backing down from its 2026 guidance, though it expects to land at the lower end of the range. The company projects net revenue between 2.9 billion and 3.1 billion dollars, with adjusted EBITDA between 300 million and 350 million dollars. Growth is expected to be fueled by new market entries, such as the commercially regulated iGaming market in Alberta, and exclusive product launches including Hollywood-themed slots and a brand refresh for the Borgata label.

Why it matters for German players

For players in Germany, the situation at BetMGM serves as a reminder of the differences in global regulation. The German Interstate Treaty on Gambling 2021 (GlüStV 2021) has created one of the most strictly monitored environments in the world. While US operators debate the legality of prediction markets, German players are protected by the LUGAS and OASIS systems, which enforce strict deposit limits and player locks. The stability of a GGL-licensed casino means that players do not have to worry about the sudden emergence of unregulated "gray" markets that could threaten their funds or data security. The focus on high-value customers and sustainable growth, as seen in BetMGM's strategy, is similar to the approach taken by many serious German operators who prioritize long-term player retention over aggressive, short-term betting volume.

What it means for GGL-licensed casinos

German casinos operating under GGL supervision can take away two main lessons from the BetMGM report. First, the importance of iGaming dominance. BetMGM’s 20 percent market share in iGaming is what keeps the company profitable even when sports betting faces headwinds. Second, the threat of alternative markets shows that the legal market must remain attractive to prevent players from moving to unregulated prediction platforms or black-market sites. The GGL’s role in blocking illegal offerings is crucial, but operators must also provide exclusive, high-quality content to keep the licensed market competitive. Moving forward, the industry will likely see a greater emphasis on efficiency and disciplined capital spending, much like the path BetMGM is now forced to take.