REG - Entain PLC - BetMGM Business Update

EntainAnnouncement

26/07/2023 13:30

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RNS Number : 2825H  Entain PLC  26 July 2023

 

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BETMGM FIRST HALF 2023 UPDATE

 

NET REVENUE FROM OPERATIONS OF $944 MILLION IN FIRST HALF OF 2023(1)

POSITIVE EBITDA FOR THE FULL SECOND QUARTER OF 2023(2)

 

JERSEY CITY - July 26, 2023 - BetMGM, one of the leading sports betting and
iGaming operators in North America, jointly owned by Entain plc (LSE: ENT)
("Entain") and MGM Resorts International (NYSE: MGM) ("MGM Resorts"), is today
providing an update on First Half of 2023 ("1H 2023") performance and outlook
for full-year 2023.

 

Adam Greenblatt, Chief Executive Officer of BetMGM, commented:

"I am pleased with the significant progress we have made during the first half
of 2023 as we continue our strong growth and remain on our path to
profitability. Our financial guidance for the year remains on track - we
expect to deliver $1.8 to $2.0 billion in full year revenue, as well as to be
EBITDA positive in the second half of 2023. In fact, we have already achieved
positive EBITDA for the full second quarter of this year. Our focus remains on
building a sustainable, scalable and returns focused business with leading
products that our players enjoy responsibly. We look forward to the remainder
of the year, buoyed by ongoing product improvements, tremendous support from
our shareholders providing access to new assets and partnerships, and - above
all - our extraordinary team at BetMGM."

 

·      BetMGM finished 1H 2023 with strong financial performance

o  Net revenue from operations of $944 million, on track to deliver at the
upper end of previous guidance range for FY 2023 revenue of $1.8 to $2.0
billion

§ 1H same-state growth of 25% in net revenue from digital operations

o  Reached the key milestone of positive EBITDA for 2Q 2023

o  Improved same state CPAs by 8% in 1H 2023 year on year

o  Bonus optimization and player management program continuing to have
significantly positive impact, delivering enhanced GGR to NGR conversion:

§ Sports NGR margin increased by 300 bps in 1H 2023 year on year

§ Digital sports 1H revenue per player up by 65% for players acquired in 2021
or earlier

o  Each of the annual cohorts of digital sportsbooks launched from 2019
through 2022 delivered positive Contribution Profit in 2Q(3)

 

·      Remain on track for previously stated guidance of EBITDA positive
in the second half of 2023 ("2H 2023")

o  Includes investment in upcoming launches in Kentucky and North Carolina
that were not originally planned during 2023

o  Expectation that BetMGM will become self-sustaining in 2H 2023, with no
additional equity investment expected from Entain or MGM Resorts after the
$150 million previously committed for 2023

 

·      Established as a leading sports betting and iGaming operator in
North America

o  Continued geographic footprint expansion in 1H 2023, with new digital
sports betting launches in Ohio, Massachusetts, and Puerto Rico

o  Live in 26 jurisdictions, including Ontario, with access to approximately
48% of the adult population in the United States(4)

o  Market share across iGaming and sports betting of 18%(5)

§ Continued market leadership in iGaming with approximately 27% market
share(6)

§ Online sports betting market share of 11%, with 13% share in markets where
BetMGM was live on day one(6)

 

·      Entain and MGM Resorts contributed new technology, resources, and
relationships to accelerate both BetMGM's product evolution and its access to
players

o  Entain's acquisition of pricing and risk specialist Angstrom, announced on
July 17(th), will enhance BetMGM's sports betting offering, particularly in
the fast-growing markets of parlay and in-play wagering, and provide players
with a greatly improved experience

o  In connection with MGM Resorts' exclusive partnership with Marriott,
announced on July 17(th), BetMGM entered into a loyalty marketing agreement
with Marriott whereby BetMGM will offer customers extensive opportunities to
earn Marriott Bonvoy points while playing with BetMGM, create exclusive games
and experiences, and allow customers to exchange BetMGM Rewards points into
Marriott Bonvoy points

o  Various platform and product enhancements delivered to provide a more
exciting and seamless experience. We're on track with the rollout of Single
Account Single Wallet

 

·      Ongoing commitment to player safety, prioritizing responsible
gambling across our business

o  Five-year extension to GameSense partnership, announced on March 1(st),
continues BetMGM's prominence of responsible gambling messages in its digital
and out-of-home marketing campaigns, as well as in its mobile app and retail
sportsbooks

§ Through its GameSense partnership, BetMGM provides customers with
information about how to bet responsibly, setting limits, dispelling myths,
and finding support and assistance

o  BetMGM awarded one of the Responsible Gambling Council's top
accreditations for integration of responsible gambling and player protection
into platforms and operations

 

·      Award recognition including

o  Casino Operator of the Year by EGR North America (second year in a row)

o  Casino Operator of the Year at SBC Awards North America (third year in a
row)

o  2023-2024 Great Place to Work Certification™

 

Notes:

1: 1H 2023 net revenue for BetMGM on a GAAP basis is expected to be
approximately $923 million, including approximately $32 million related to
Nevada MGM Resorts 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: 1H 2023 Revenue and EBITDA figures are unaudited.

3. Contribution Profit for a particular state reflects Net Gaming Revenue
minus direct costs (excluding depreciation and amortization and people costs)
considered under GAAP presentation of Gross Profit plus marketing acquisition
spend.

4: BetMGM operates iGaming and Sports Betting in five markets and Sports
Betting in twenty-one markets.

5: Market share for last three months ending April 2023 by GGR including
iGaming, retail and online sports betting, and only U.S. markets where BetMGM
was active excluding New York; internal estimates used where operator-specific
results are unavailable.

6: Market share for last three months ending April 2023 by GGR, including only
U.S. markets where BetMGM was active and excluding New York in online sports;
internal estimates used where operator-specific results are unavailable.

 

Forward-looking statements

This press release contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995, which involve
substantial risks and/or uncertainties, including those described in the MGM
Resorts International public filings with the Securities and Exchange
Commission. BetMGM has based forward-looking statements on management's
current expectations, assumptions and projections about future events and
trends. Examples of these statements include, but are not limited to, BetMGM's
expectations regarding its financial outlook (including forecasted net
revenues from operations, EBITDA, and amounts expected to be invested by
Entain and MGM Resorts in 2023), projected market share position, and its
expected growth in new and existing jurisdictions. These forward-looking
statements are not guarantees of future performance, conditions or results,
and involve a number of known and unknown risks, uncertainties, assumptions
and other important factors, that could cause actual results or outcomes to
differ materially from those discussed in the forward-looking statements.
Included among the important factors that could cause actual results to differ
materially from those indicated in such forward-looking statements are: 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, BetMGM 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. If BetMGM updates one
or more forward-looking statements, no inference should be drawn that it will
make additional updates with respect to those other forward-looking
statements.

 

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 differently, 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
Entain Plc (LSE: ENT) and MGM Resorts International (NYSE: MGM), BetMGM has
exclusive access to all of MGM's U.S. land-based and online sports betting,
major tournament poker, and online gaming businesses. Utilizing Entain's
US-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 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, operating 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 31 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, and the Company's subsidiary LeoVegas AB offers sports betting and
online gaming through market-leading brands in several jurisdictions
throughout Europe. 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)
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.

 

 

COMPANY CONTACTS

 

BETMGM

Investment
Community
    witek.wacinski@betmgm.com

WITEK
WACINSKI
 

VP Strategy & Development

 

News
Media
     press@betmgm.com

 

 

ENTAIN

Investment
Community
      investors@entaingroup.com

DAVID LLOYD-SEED

Chief Investor Relations & Communications Officer

 

DAVINA HOBBS

Head of Investor Relations

 

AIMEE REMEY

VP US Investor Relations

 

CALLUM SIMS

Investor Relations Manager

 

News
Media
           media@entaingroup.com

LISA ATTENBOROUGH

Head of Media Relations

 

JODIE HITCH

Media Relations Manager

 

 

MGM RESORTS

Investment
Community
                            achapman@mgmresorts.com

ANDREW CHAPMAN
 
 

Director of Investor Relations

 

News
Media
           media@mgmresorts.com

BRIAN AHERN

Executive Director, Media Relations

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