REG - Entain PLC - BetMGM Business Update

EntainAnnouncement

19/01/2022 13:30

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RNS Number : 9739Y  Entain PLC  19 January 2022

19 January 2022

 

Entain and MGM Resorts International

BetMGM business update

 

BetMGM expects to deliver net revenue from operations of over $1.3bn in 2022
and reach positive EBITDA in 2023

 

BetMGM LLC ("BetMGM"), one of the leading sports betting and iGaming operators
across the U.S., jointly owned by Entain plc (LSE: ENT) ("Entain") and MGM
Resorts International (NYSE: MGM) ("MGM Resorts"), is today providing an
update on performance and outlook for 2022.

 

·      BetMGM is achieving market share in line with its long-term
target of 20% - 25% in U.S. sports betting and iGaming

o  Number 2 operator for sports betting and iGaming across the markets in
which it operates with a 24% market share for the three months to November
2021

o  Remains market leader in iGaming with 30% market share for the three
months to November 2021 in the markets in which it operates

·      Live in 19 jurisdictions - 4 iGaming, 19 sports betting

o  Expect to reach approximately 40% of the U.S. adult population with 2
further jurisdiction launches as well as launch in Canada and Puerto Rico in
the coming months

·      Strong financial performance in FY 2021:

o  Net revenue from operations expected to be approximately $850m(1), ahead
of management expectations and up nearly five times from prior year

o  Same state growth in net revenue from operations of 140% from prior year

o  FY 2021 EBITDA loss expected to be in the range of $420m - $440m, in line
with expectations

o  Cost per acquisition was in line with management's forecast, which
reaffirms the expectation of achieving a long-term acquisition cost of $250

o  Player values in line with expectations supporting long term total
addressable market opportunity in North America of around $32bn

·      FY 2022 net revenue from operations expected to be over $1.3bn

·      Continued growth will be supported by investment in additional
markets and product deployments:

o  Expecting to launch online sportsbooks in Illinois and Louisiana in the
first quarter as well as retail sportsbooks in Puerto Rico and both online
sportsbook and iGaming in Ontario later this year

o  Expanding our first-to-market Bingo product and the BetMGM Racing app into
additional states while continuing to enhance our products in existing markets

o  Continuing to employ our returns-driven marketing strategy while further
incorporating the MGM Resorts loyalty program into all aspects of our offering

o  Maintain our market-leading customer service while prioritizing
responsible gaming across all facets of our business

·      BetMGM anticipates reaching positive EBITDA in 2023, based on its
current assumption of future live markets

o  We have achieved positive contribution in several states, some within one
year of launch, driven by our prudent, data-driven marketing strategy and by
leveraging our omni-channel offering

·      Wholly supportive of BetMGM's continuing success, strong
performance and market leadership, the investment by Entain and MGM Resorts is
expected to be approximately $450m in 2022

o  This would bring the combined total investment from Entain and MGM Resorts
to approximately $1.1bn since launch in 2018

 

Conference Call:

BetMGM will host a conference call at 3.00pm UK time today (10:00am ET) today,
which will include an overview of its results, followed by a brief question
and answer session. The call will be accessible via the Internet through:
https://www.webcaster4.com/Webcast/Page/2832/44324
(https://www.webcaster4.com/Webcast/Page/2832/44324) or by dialling:

U.K.: +44 (0) 20 3147 4901

U.S. (Toll Free): +1 (877) 871-3172

International: +1 (412) 902-6603

Conference call access code: 3122358

The live webcast and replay will also be accessible at
https://entaingroup.com/investor-relations/results-centre/
(https://entaingroup.com/investor-relations/results-centre/)

 

BetMGM 2022 Investor Day:

BetMGM will host an investor day for analysts and investors during May to
provide further updates on financial performance, operational plans and
outlook. Details of the event, including format and registration, will be made
available via press release in due course.

 

Adam Greenblatt, CEO of BetMGM, commented:

"The highly talented team at BetMGM is executing our plan with purpose,
passion and discipline, and our results speak for themselves. After only 3
years into our journey, we have cemented the credibility of BetMGM's
leadership ambition in sports betting and iGaming in the U.S. 2022 is a
critical year, where the leading national operators will reach critical mass,
paving the way for the next phase of the sector's financial evolution. With
the support of our shareholders, our technology and data platform, brand and
omni-channel strategy, we look to the future with confidence."

 

Jette Nygaard-Andersen, CEO of Entain commented:

"BetMGM is built on Entain's best in class technology and capabilities
alongside MGM Resorts iconic brand and assets. Its fantastic success so far
demonstrates that BetMGM has really captured the excitement of customers
across the states where it operates.  BetMGM continues to outpace the market
as a result of its unique assets and go to market approach, broad and highly
engaging range of in-house products and digital marketing capabilities.
Given the long term opportunity and shareholder value potential in winning in
this market, we are very happy to support BetMGM in this investment phase of
its growth journey and we are absolutely committed to providing BetMGM with
what it takes to win."

 

 

 

Bill Hornbuckle, CEO & President of MGM Resorts commented:

"BetMGM has made significant progress in gaining a strong foothold in the
rapidly growing U.S. sports betting and iGaming market, solidifying its
position as the number two operator nationwide in 2021. These achievements are
underpinned by the structural advantages offered through MGM Resorts and
Entain as well as a best-in-class team at BetMGM led by Adam. As we look to
2022, we are beyond excited about further integrating BetMGM with our MGM
loyalty program and land-based operations to elevate the BetMGM player
experience. We are more confident than ever about BetMGM's future prospects
and remain committed to its continued success."

 

Notes:

1: 2021 net revenue for BetMGM on a GAAP basis is expected to be approximately
$813 million, which includes approximately $52 million related to Nevada MGM
operations for which BetMGM records on a net basis as BetMGM is considered to
be the agent in the Nevada transactions for GAAP purposes

 

Contacts:

 BetMGM

 Elisa Richardson

 press@betmgm.com (mailto:press@betmgm.com)

 Head of Public Relations & Communications

 Entain plc
 Investor Relations

 David
 Lloyd-Seed
 investors@entaingroup.com (mailto:investors@entaingroup.com)

 Group Director of Investor Relations & Corporate Communications

 Davina Hobbs

 Head of Investor Relations

 News Media

 Tessa
 Curtis
 media@entaingroup.com

 Head of Group PR & Media Relations

 MGM Resorts International
 Investment Community

 Catherine Park

 cpark@mgmresorts.com (mailto:)

 Executive Director, Investor Relations

 News Media

 Brian Ahern

 media@mgmresorts.com (mailto:media@mgmresorts.com)

 Director of Media Relations

 

 

 

LEI: 213800GNI3K45LQR8L28

 

 

Forward-looking statements

This document contains certain statements that are forward-looking statements.
They appear in a number of places throughout this document and include
statements regarding our intentions, beliefs or current expectations and those
of our officers, directors and employees concerning, amongst other things,
results of our operations, financial condition, liquidity, prospects, growth,
strategies and the business we operate. These forward-looking statements
include all matters that are not historical facts. By their nature, these
statements involve risks and uncertainties since future events and
circumstances can cause results and developments to differ materially from
those anticipated. Any such forward-looking statements reflect knowledge and
information available at the date of preparation of this document. Among the
important factors that could cause actual results to differ materially from
those indicated in such forward-looking statements include the significant
competition within the gaming and entertainment industry; BetMGM's ability to
execute on its business plan; changes in applicable laws or regulations,
particularly with respect to iGaming and online sports betting; BetMGM's
ability to manage growth and access the capital needed to support its growth
plans; and BetMGM's ability to obtain the required licenses, permits and other
approvals necessary to grow in existing and new jurisdictions. In providing
forward-looking statements, Entain is not undertaking any duty or obligation
to update these statements publicly as a result of new information, future
events or otherwise, except as required by law. Other than in accordance with
its legal or regulatory obligations (including under the Market Abuse
Regulation (596/2014), the Listing Rules, the Disclosure Guidance and
Transparency Rules and the Prospectus Rules), Entain undertakes no obligation
to update or revise any such forward-looking statements. Nothing in this
document should be construed as a profit forecast. Entain and its directors
accept no liability to third parties in respect of this document save as would
arise under English law.

 

Non-GAAP Financial Information

This press release includes projected net revenue from operations, which has
not been prepared in accordance with GAAP. BetMGM believes this presentation,
which it uses for its own analysis of operations, is useful in that it
reflects the true economic performance of the business. If BetMGM presented
net revenue from operations in accordance with GAAP, then BetMGM would present
the revenues associated with its Nevada digital and retail sports betting
operations different, until such time as BetMGM is licensed as a Nevada gaming
operator. Currently under GAAP, its calculation of Net Revenue would be on a
basis net of operating costs, such that the GAAP reported Net Revenue would be
lower than the Net Revenue reported herein, with Net Income remaining the
same.

 

About BetMGM

 

BetMGM is a market leading sports betting and gaming entertainment company,
pioneering the online gaming industry. Born out of a partnership between MGM
Resorts International (NYSE: MGM) and Entain Plc (LSE: ENT), BetMGM has
exclusive access to all of MGM Resorts' U.S. land-based and online sports
betting, major tournament poker, and online gaming businesses. Utilizing
Entain's U.S.-licensed, state of the art technology, BetMGM offers sports
betting and online gaming via market leading brands including BetMGM, Borgata
Casino, Party Casino and Party Poker. Founded in 2018, BetMGM is headquartered
in New Jersey. For more information, visit http://www.betmgminc.com/
(http://www.betmgminc.com/) .

 

About Entain plc

Entain plc (LSE: ENT) is a FTSE100 company and is one of the world's largest
sports-betting and gaming groups, operating both online and in the retail
sector. The Group owns a comprehensive portfolio of established brands; Sports
Brands include bwin, Bet.pt, Coral, Crystalbet, Eurobet, Ladbrokes, Neds and
Sportingbet; Gaming Brands include CasinoClub, Foxy Bingo, Gala, Gioco
Digitale, Ninja Casino, Optibet, partypoker and PartyCasino. The Group owns
proprietary technology across all its core product verticals and in addition
to its B2C operations provides services to a number of third-party customers
on a B2B basis.

 

The Group's joint-venture with MGM Resorts International, BetMGM, is a leader
in sports-betting and iGaming in the US. Entain provides the technology which
powers BetMGM and exclusive games and products, specially developed at its
in-house gaming studios. The Group is tax resident in the UK with licenses in
a total of 27 regulated markets. Entain is a leader in ESG, a member of
FTSE4Good, the DJSI and is AA rated by MSCI. The Group has set a science-based
target, committing to be carbon net zero by 2035 and through the Entain
Foundation supports a variety of initiatives, focusing on safer gambling,
grassroots sport, diversity in technology and community projects.

For more information see the Group's website: www.entaingroup.com
(http://www.entaingroup.com)

 

About MGM Resorts International

MGM Resorts International (NYSE: MGM) is an S&P 500® global entertainment
company with national and international locations featuring best-in-class
hotels and casinos, state-of-the-art meetings and conference spaces,
incredible live and theatrical entertainment experiences, and an extensive
array of restaurant, nightlife and retail offerings. MGM Resorts creates
immersive, iconic experiences through its suite of Las Vegas-inspired brands.
The MGM Resorts portfolio encompasses 32 unique hotel and gaming destinations
globally, including some of the most recognizable resort brands in the
industry. The Company's 50/50 venture, BetMGM, LLC, offers U.S. sports betting
and online gaming through market-leading brands, including BetMGM and
partypoker. The Company is currently pursuing targeted expansion in Asia
through the integrated resort opportunity in Japan. Through its "Focused on
What Matters: Embracing Humanity and Protecting the Planet" philosophy
(https://www.mgmresorts.com/en/company/csr.html) , MGM Resorts commits to
creating a more sustainable future, while striving to make a bigger difference
in the lives of its employees, guests, and in the communities where it
operates. The global employees of MGM Resorts are proud of their company for
being recognized as one of FORTUNE® Magazine's World's Most Admired
Companies®. For more information, please visit us at www.mgmresorts.com
(https://nam11.safelinks.protection.outlook.com/?url=http%3A%2F%2Fwww.mgmresorts.com%2F&data=02%7C01%7C%7Cc0dc1390d0904f667a7108d859a99f07%7Cc64a4fa65c9344ee83651e8c8c86f41a%7C0%7C0%7C637357932355339142&sdata=pi4SrXbP6AHPM%2F3tbPdGbDiN5gaHaVOcwgRF7e6iYo0%3D&reserved=0)
. Please also connect with us @MGMResortsIntl on Twitter
(https://nam11.safelinks.protection.outlook.com/?url=https%3A%2F%2Ftwitter.com%2FMGMResortsIntl&data=02%7C01%7C%7Cc0dc1390d0904f667a7108d859a99f07%7Cc64a4fa65c9344ee83651e8c8c86f41a%7C0%7C0%7C637357932355339142&sdata=Edzh21FkcebIrXkOZzP%2FERFy38qvF6lPhiDuW8jGCO4%3D&reserved=0)
as well as Facebook
(https://nam11.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.facebook.com%2Fmgmresorts&data=02%7C01%7C%7Cc0dc1390d0904f667a7108d859a99f07%7Cc64a4fa65c9344ee83651e8c8c86f41a%7C0%7C0%7C637357932355349136&sdata=GWuYqi0PleUBlZrV2BIU8DKiG9cHQOsSlnrQMYAi8Fc%3D&reserved=0)
and Instagram
(https://nam11.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.instagram.com%2Fmgmresortsintl&data=02%7C01%7C%7Cc0dc1390d0904f667a7108d859a99f07%7Cc64a4fa65c9344ee83651e8c8c86f41a%7C0%7C0%7C637357932355349136&sdata=aCKNsXspnc3RYL5spHtEs0tuL92OPB4ndD4Ij7MR4Fw%3D&reserved=0)

 

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