REG - Entain PLC - BetMGM Business Update

EntainAnnouncement

26/01/2023 13:30

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RNS Number : 9730N  Entain PLC  26 January 2023

1.30pm 26 January
2023

 

ENTAIN AND MGM RESORTS INTERNATIONAL

 

BETMGM BUSINESS UPDATE

FY22 NET REVENUE FROM OPERATIONS OF $1.44 BILLION, AHEAD OF EXPECTATIONS(1)

BetMGM expected to be EBITDA positive in the Second Half of 2023

 

BetMGM LLC ("BetMGM"), one of the leading sports betting and iGaming operators
across North America, 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 2023.

 

·      BetMGM finished FY 2022 with a strong financial performance

o  Net revenue from operations of $1.44 billion, ahead of prior guidance of
over $1.3 billion

§ Same-state growth in net revenue from digital operations of 51%

o  EBITDA loss of approximately $440 million, in line with prior guidance(2)

o  Financial outperformance driven by:

§ Higher gross gaming margins resulting from improved customer experience and
other product improvements

§ Same state CPAs reduced by 21% year-over-year due to data-focused marketing
strategy and increased scale

§ Improved approach to player bonusing delivered by our data science team

 

·      BetMGM has established itself as a leading sports betting and
iGaming operator in North America

o  Top 3 operator in the U.S. for sports betting and iGaming

§ Continued market leadership in iGaming with approximately 30% market
share(3)

§ Online sports betting market share of 13%, with 20% share in markets where
BetMGM was live on day one(3)

§ Our Q4 2022 online sports net revenue margin has doubled versus Q4 2021 as
we continue to optimize our bonus environment

 

o  Live in 25 jurisdictions with access to approximately 45% of the adult
population in the United States as well as now operating in Ontario, Canada(4)

§ Expanded online footprint in 2022 with launches in six new markets: New
York, Louisiana, Illinois, Ontario, Kansas, and Maryland

§ Opened four new retail sportsbooks: Nationals Park in Washington, DC,
Casino del Mar in Puerto Rico, The Cosmopolitan in Las Vegas, and at State
Farm Stadium, the first retail sportsbook at an NFL stadium and home of the
2023 Super Bowl

§ Launched in Ohio on January 1, 2023, with online sports betting and two
retail sportsbooks at MGM Northfield Park and at the Reds' Great American Ball
Park

 

o  Furthered our commitment to industry leadership in promoting player safety
and responsible gaming

§ Created the first industry-led online responsible gaming standards in
collaboration with a coalition of other online gaming operators

§ Increased funding for gaming research, joined the National Council on
Problem Gambling and prioritized customer service across all facets of our
business

§ Implemented the award-winning responsible gaming program, GameSense,
companywide

§ Committed to continuously expanding our product tools to proactively
monitor customers and curate messaging to ensure safe and responsible play

 

o  Winner of several industry awards including: Casino Operator of the Year
by EGR North America; Casino Operator of the Year at SBC Awards North America;
Online Casino of the Year by the American Gambling Awards; and identified as
one of the Best Workplaces in New York by Fortune

 

·      BetMGM is well positioned to achieve net revenue from operations
of between $1.8 and $2 billion in FY 2023 and be EBITDA positive in the second
Half of 2023

 

·      Wholly supportive of BetMGM's stellar performance and with
confidence in management's plan, Entain and MGM Resorts expect to invest a
combined additional $150 million in FY 2023

o  This brings the total combined investment to build the company in less
than 5 years to approximately $1.25 billion

 

Adam Greenblatt, CEO of BetMGM, commented:

"The talented team at BetMGM continues to execute our plan with purpose,
passion, and discipline. 2022 was a year in which we delivered against many
key strategic initiatives and achieved several company milestones, including
exceeding our financial targets, launching a redesigned BetMGM mobile app and
furthering our commitment to Responsible Gambling. With continued and
unwavering support from our shareholders, we look to 2023 confident in
achieving further key milestones, including $1.8 to $2 billion in net revenue
from operations and being EBITDA positive in the Second Half of 2023."

 

Notes

(1)      FY 2022 net revenue for BetMGM on a GAAP basis is expected to be
approximately $1,403 million, which includes approximately $55 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.

(2)      FY 2022 EBITDA loss is an unaudited estimate.

(3)      Market share for last three months ending October 22 by GGR
including only U.S. markets where BetMGM was active; internal estimates used
where operator-specific results are unavailable.

(4)      BetMGM operates iGaming and Online Sports Betting in five
markets and Sports Betting only in twenty markets.

 

 

Conference Call

BetMGM will host a conference call at 3.00pm UK (10.00am EST) today, which
will include an overview of its results, followed by a Q&A session.

 

The live webcast will be accessible at Webcast Registration
(https://edge.media-server.com/mmc/p/e6xy3tdg) .

 

For those wishing to ask a question, please register at Dial-in Registration
(https://register.vevent.com/register/BI036a28fe1b0f49929c731f43afb942c6) .
Upon registration, dial-in details and a personalised PIN will be provided.

 

A replay of the call will be available at
https://entaingroup.com/investor-relations/results-centre/
(https://eur03.safelinks.protection.outlook.com/?url=https%3A%2F%2Fentaingroup.com%2Finvestor-relations%2Fresults-centre%2F&data=04%7C01%7CDavina.Hobbs%40entaingroup.com%7Cb32ef304a1c143a347b108d8f9a6c213%7C60c43c0a64ac4050bf3e31e1cdfffdeb%7C0%7C0%7C637533842631221669%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C1000&sdata=exRCE8M4fac2VFZ9ViQFfKGQl5vTXIv0SId5UKGCnWw%3D&reserved=0)

 

 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)

 Chief Investor Relations & Communications Officer

 Davina Hobbs

 Head of Investor Relations

 Callum Sims

 IR Manager

 News Media

 Lisa
 Attenborough
 media@entaingroup.com

 Head of Media Relations

 Jodie Hitch

 PR Manager

 MGM Resorts International
 Investment Community

 Andrew
 Chapman
 achapman@mgmresorts.com (mailto:achapman@mgmresorts.com)

 Director, Investor Relations

 News Media

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

 Executive Director, 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 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 (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 BetCity, bwin, Coral, Crystalbet, Eurobet, Ladbrokes, Neds,
Sportingbet, Sports Interaction and SuperSport; Gaming brands include Foxy
Bingo, Gala, GiocoDigitale, 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 has a 50/50 joint venture, BetMGM, a leader in sports betting and
iGaming in the US. Entain provides the technology and capabilities which power
BetMGM as well as exclusive games and products, specially developed at its
in-house gaming studios. The Group is tax resident in the UK with operations
in over 40 regulated or regulating territories. 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
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as well as Facebook
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and Instagram
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