Entain: BetMGM Cuts 2026 Revenue Outlook, Maintains EBITDA Guidance Despite Tough Sports Results

Key Points

• 2026 revenue cut but EBITDA held: BetMGM trimmed its 2026 revenue outlook to $2.9 billion–$3.1 billion while maintaining adjusted EBITDA guidance of $300 million–$350 million (expecting the lower end) and reiterated a path to $500 million of adjusted EBITDA in 2027.
• Q1 and iGaming momentum: Q1 net revenue was $696 million (+6% YoY) with adjusted EBITDA of $25 million; iGaming revenue rose to $481 million (+9% YoY) driven by higher net gaming revenue per active player, exclusive content deals, and an Alberta launch set for July 13.
• Sports headwinds and higher CPAs: Online sports betting was pressured by unfavorable results (~60 basis points of margin drag) and materially higher customer acquisition costs—partly due to competitors positioning as “prediction markets”—prompting plans to cut inefficient OSB marketing and reallocate spend to higher-return areas to protect EBITDA.

BetMGM reported a “steady start” to 2026, posting first-quarter net revenue of $696 million, up 6% year-over-year, and adjusted EBITDA of $25 million, according to Chief Executive Officer Adam Greenblatt. The company said results came in slightly below expectations due to “player-friendly sports results” and intensifying competitive dynamics in the market.

Greenblatt said BetMGM’s strategic efforts in player acquisition and management, operational discipline, and product development continue to underpin its model. He added that the company is focused on allocating capital between iGaming and sports betting based on returns, with increased emphasis on multi-product states that include iGaming, Nevada, and “higher-value premium mass players.”

Updated 2026 outlook and 2027 target maintained

BetMGM lowered its 2026 revenue expectations and refined its profitability outlook. Greenblatt said the company now expects 2026 revenue in the range of $2.9 billion to $3.1 billion, while still forecasting adjusted EBITDA within its prior guidance range of $300 million to $350 million—“albeit at the lower end.” He also reiterated that BetMGM continues to see “a path to $500 million of adjusted EBITDA in 2027.”

During the Q&A, CFO Gary Deutsch said the factors behind the revenue guidance reduction were “in both” the first quarter and the rest of the year, adding that sports performance in Q1 was “really driven by a lot of bad results for the house.” Deutsch said the impact was “sort of evenly distributed” between Q1 and the remainder of the year.

iGaming growth driven by player value and exclusive content

BetMGM’s iGaming business delivered $481 million of net revenue in Q1, up 9% year-over-year. Greenblatt attributed the growth to refinements in player management and bonus optimization, which lifted net gaming revenue per active player by 12% despite a reduction in monthly active users. iGaming contribution totaled $143 million, with Greenblatt noting that customer acquisition costs have increased somewhat as CPAs “have been drifting up,” but he said the company remains comfortable with payback periods on new players.

Greenblatt highlighted new content initiatives, including an exclusive arrangement tied to Games Global. “We are the home of Gold Blitz under our new partnership with Games Global,” he said, giving BetMGM players early access to Gold Blitz titles before broader market release. He also cited exclusive Survivor-branded titles tied to the franchise’s 50th anniversary.

Looking ahead, Greenblatt said BetMGM expects to build on iGaming momentum with additional exclusive game launches and plans for an Alberta launch in July, which he later confirmed as July 13.

Sports betting sees growth amid “prediction markets” ad spend pressure

Online sports betting (OSB) net revenue was $203 million in Q1, up 4% year-over-year, though Greenblatt said results were impacted by unfavorable sports outcomes, roughly “60 basis points versus theoretical margin.” BetMGM’s OSB business caters to relatively higher-staking bettors, which Greenblatt said can increase hold volatility but supports resilience due to stronger player affinity.

BetMGM said it continues to prioritize quality over volume in OSB. Greenblatt reported handle per active player rose 23% and net gaming revenue per active increased 25% versus last year, reflecting a shift toward higher-value players and fewer marginal players—leading to fewer actives overall.

Greenblatt pointed to a “significant increase” in CPAs for sports betting, attributing much of the pressure to companies describing themselves as “prediction markets” buying sports betting keywords and sports media advertising, which he said is bidding up acquisition costs and extending payback periods. He said some of these operators have introduced “sportsbook mode” in an effort to mirror sports betting.

Greenblatt said BetMGM is refining its OSB marketing approach for the remainder of 2026 under the assumption that current media conditions persist. When asked by Bank of America’s Shaun Kelley whether guidance assumes an improvement in the CAC environment, Greenblatt said BetMGM is “assuming the current CPA environment prevails for the rest of the year.”

Deutsch told Morgan Stanley’s Ed Young that BetMGM expects to protect EBITDA guidance largely by reducing marketing in “broader OSB-only states” and reallocating spend toward areas with better returns. Greenblatt added the company will “prune the least efficient pockets of spend” and reallocate capital to where paybacks are strongest.

Retail sports volatility, Nevada strength, and cash returns

Retail sports net revenue totaled $11 million, down 43% year-over-year, which Greenblatt said was driven by “a few large VIP-related payouts.” He added that Nevada remains a key strength as the “epicenter” of BetMGM’s omni-channel advantage and a major source of EBITDA generation, noting continued momentum across digital and retail combined and improved market share.

Asked about Nevada’s contribution, Deutsch said that on the prior call, management indicated about a quarter of EBITDA generation came from Nevada, adding it was “probably a little bit less than that this time” given weaker sports results in the quarter.

On capital and cash generation, Greenblatt said Q1 total contribution was $116 million, CapEx was $3 million, and adjusted EBITDA minus CapEx—his preferred proxy for cash to parent companies—was $22 million. He said BetMGM is now paying parent fees to Entain LON: ENT and MGM Resorts, with parent fees totaling $3 million in Q1. Greenblatt said these parent fees would be the only cash to parents in Q1 due to seasonality, including marketing investments timing around NFL and March Madness and annual compensation payouts.

Management also discussed longer-term growth drivers, including the World Cup, improved trading capabilities, Alberta’s launch of OSB and iGaming, and continued omni-channel development in Nevada. Greenblatt said BetMGM is also refreshing and repositioning the Borgata casino brand to broaden reach, particularly in the Northeast.

About Entain LON: ENT

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.

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