REG - Entain PLC - BetMGM H1 Update

EntainAnnouncement

29/07/2024 07:00

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RNS Number : 1103Y  Entain PLC  29 July 2024

29 July 2024

 

THIS ANNOUNCEMENT CONTAINS INFORMATION THAT QUALIFIES AS INSIDE INFORMATION

 

 

BETMGM FIRST HALF 2024 UPDATE

 

NET REVENUE FROM OPERATIONS OF $1.0 BILLION IN FIRST HALF OF 2024(1,2)

 

Momentum accelerating in a year focused on investment and strategic execution
to drive future growth

 

 

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 First Half 2024 ("1H 2024") performance.

 

Adam Greenblatt, Chief Executive Officer of BetMGM, commented:

"The first half of this year has been very important in laying the groundwork
for BetMGM's future. 2024 is a year of investment, focusing on improving our
customer experience and stepping up our level of investment in players. We are
encouraged to see this strategy delivering accelerating momentum. We have
exceeded our goals for both acquisition and retention, which should lead to
higher year-over-year revenue growth for the second half of this year into
2025.

 

Our online sportsbook players have been enjoying Angstrom-enabled product
capabilities since the start of the baseball season, and we look forward to
players enjoying this across our wider sports offering leading into the NFL
season. We are also very excited to bring our unique omnichannel opportunities
to players by fully leveraging MGM Resorts' presence in Las Vegas. Single
Account Single Wallet will be an important driver of the customer experience,
with Nevada marking its completion ahead of the NFL season. Our iGaming
business continues to perform strongly with attractive returns, and to
maximize this strength and momentum, we plan to deploy additional marketing in
the back half of this year. Our execution roadmap, building momentum and
prospects ahead all support our confidence in BetMGM's strong future."

 

1H 2024 Update

á      1H 2024 financial performance demonstrating accelerating momentum
through the year

o  Net revenue from operations of $1.0 billion, up 6% versus prior year(1,2)

¤ 2Q net revenue growth of 9% YoY, up from 3% in 1Q

¤ 2Q online sports betting NGR per active up 16% YoY

¤ 2Q iGaming average monthly actives growth of 18% YoY, up from 9% in 1Q,
with no new state launches

o  EBITDA consistent with expectations of 2024 being an investment year,
supporting customer acquisition and enhanced player experience initiatives

¤ Encouraging online sportsbook CPAs of FTDs driven by successful Super Bowl
campaign

¤ 1H EBITDA of -$123 million(2)

 

á      Established as a leading operator in North America, live in 29
markets with access to 52% of adult population(3)

o  Continued geographic footprint expansion, with BetMGM launch of digital
sports betting in North Carolina in March and district-wide in the District of
Columbia in July

o  13% GGR market share in the U.S. and Ontario across Sports Betting and
iGaming(4)

o  Demonstrates stabilization and continued strength in iGaming with
approximately 22% market share(5)

 

á      Continued focus on operational execution, delivering improved
app, product capabilities, and market-leading partnerships across both digital
sports and iGaming

o  Enhanced Sports Product and Technology

¤ Further integration of Angstrom capabilities with new markets and features
for MLB and back end of NBA seasons, provided by fully in-house single game
parlay ("SGP") and SGP+ products

¤ Improved player experiences with enhanced betting and SGP+ journeys,
landing pages and new features including live bet tracking

á    Actives who placed an MLB SGP bet this season up 40% YoY(6)

á      Volume of weekly MLB SGP bets doubled versus last year(6)

o  Leadership in iGaming

¤ Market-leading jackpots – New Jersey jackpot of over $5 million expected
to be the largest regulated U.S. online jackpot ever paid

¤ Launched exclusive games and innovative reward mechanics with top
suppliers, including GameCode and White Hat Gaming

¤ Launched BetMGM Arcade, the home for Ônon-traditional' content including
LuckyTap and Crash-style games

o  Best-in-Class Marketing Partnerships

¤ Integration of partnerships with X, Marriott Bonvoy, and Associated Press

¤ Successful Super Bowl campaign with citywide takeover of Las Vegas and
iconic commercial featuring Tom Brady, Wayne Gretzky and Vince Vaughn

¤ Exclusive ambassadorship with Brian Christopher Slots for all online
regulated markets

 

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

o  Founding member of the newly established Responsible Online Gaming
Association ("ROGA"), which brings together the largest U.S. online sports
betting and gaming operators to develop and advance responsible gaming
practices

o  Expanded the Kindbridge Health program to eight additional jurisdictions,
offering self-excluded individuals referrals for problem gambling treatment

o  Research and funding support via sponsorship for the International Center
for Responsible Gaming

 

á      Award recognition, including

o  EGR North America's awards for both Employer and Sports Betting Operator
of the Year

o  Top 20 for Best Workplaces in New York(TM) by Fortune

o  Hashtag Sports awards for both Best Sports Betting Partnership (X/Twitter)
and Best Communications Strategy

 

Outlook

á      As announced on December 4, 2023, BetMGM's strategic roadmap
assigned 2024 as an investment year, supporting enhanced player experiences
and improved sportsbook product to drive long-term value for stakeholders

á      Coupled with an improving sportsbook offering, and building on
BetMGM's iGaming strength which already delivers over $400 million
contribution annually, expectation of greater than planned marketing
investment in iGaming in 2H this year(7)

o  Additional investment expected to be funded by bank debt

á      Consistent with expectation of 2024 as an investment year, expect
H2 EBITDA to be similar to H1

á      Pipeline of exciting opportunities ahead including key
milestones:

o  On track for Angstrom capabilities to be fully integrated across MLB, NBA
and NFL offerings ahead of 2024 NFL season

o  Single Account Single Wallet (SASW) rollout expected to be completed with
Nevada in place prior to the 2024 NFL season

¤ Enabling BetMGM customers in MGM Resorts properties, representing 13
million room nights annually, to sign up at one of BetMGM's eight retail
sportsbooks and return to their home state with the same wallet

¤ Completing the integration of player wallets across all BetMGM markets and
empowering the final Las Vegas unlock for BetMGM

á      Investment in our execution roadmap, accelerating momentum and
opportunities ahead all support our confidence in BetMGM's pathway to $500
million EBITDA in the coming years

 

Notes:

1: 1H 2024 net revenue for BetMGM on a GAAP basis is expected to be
approximately $978 million, including approximately $30 million primarily
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 2024 net revenue and EBITDA figures are unaudited.

3: BetMGM operates iGaming and Online Sports Betting in five markets and
Sports Betting only (combined online and retail) in 24 markets.

4: Consolidated GGR market share consists of last three months ending May or
June 2024 as latest reported for U.S. sports betting markets where BetMGM was
active (online and retail), last three months ending June 2024 for U.S.
iGaming markets where BetMGM was active, and last three months ending June
2024 for the Ontario market; internal estimates used where operator-specific
results are unavailable.

5: iGaming GGR market share reflects the three-month period through June 2024.

6: Engagement data for the MLB season for the period 3/20/24 to 7/17/24.

7: Contribution Profit 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.

 

Inside Information

This announcement contains information that qualifies as inside information
within the meaning of Article 7 of the Market Abuse Regulation (EU) No.
596/2014 as it forms part of English law by virtue of the European Union
(Withdrawal) Act 2018. Upon the publication of this announcement via a
regulatory information service, this inside information is now considered to
be in the public domain.

 

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 expected investment by Entain and MGM
Resorts in 2024), projected market share position, its expected growth in new
and existing jurisdictions, product capabilities, and achievement of key
milestones. 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
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/.

 

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, STS, SuperSport and TAB NZ; 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 and is the only
global operator to exclusively operate in domestically regulated or regulating
markets operating in over 30 territories.

 

Entain is a leader in ESG, a member of FTSE4Good, the DJSI and is AA rated by
MSCI. 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 gaming and
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 sports
betting and online gaming in North America through market-leading brands,
including BetMGM and partypoker, and the Company's subsidiary, LV Lion Holding
Limited, 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, 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://c212.net/c/link/?t=0&l=en&o=4215815-1&h=1711520733&u=https%3A%2F%2Fc212.net%2Fc%2Flink%2F%3Ft%3D0%26l%3Den%26o%3D4199323-1%26h%3D839648104%26u%3Dhttp%253A%252F%252Fwww.mgmresorts.com%252F%26a%3Dwww.mgmresorts.com&a=www.mgmresorts.com)
. Please also connect with us @MGMResortsIntl on Twitter as well as Facebook
and Instagram.

 

 

COMPANY CONTACTS

 

BETMGM

WITEK
WACINSKI
    witek.wacinski@betmgm.com

SVP Strategy & Development

 

News Media
 
 press@betmgm.com

 

ENTAIN PLC

Investor
Relations
      investors@entaingroup.com

 

MGM RESORTS

Investment Community
 
achapman@mgmresorts.com

ANDREW CHAPMAN
 
 

Director, Investor Relations

 

News Media
 
  media@mgmresorts.com

BRIAN AHERN

Executive Director, Media Relations

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