BetMGM: 2022, another successful year and continuing to perform strongly

BetMGM: 2022, another successful year

Since taking our first steps into the US market in 2018, BetMGM is now one of the leading sports betting and iGaming operators in the US.

BetMGM, Entain's 50;50 joint venture with MGM Resorts International in the US, continues to go from strength to strength. On 26th January 2023, BetMGM updated the market on its performance during 2022 and provided outlook commentary for the year ahead.

Since taking our first steps into the US market in 2018, BetMGM is now one of the leading sports betting and iGaming operators in the US. In just four years, BetMGM has grown to nearly $1.5 billion revenue business, firmly establishing itself as Top 3 operator by providing customers with fresh offers alongside engaging and entertaining products.

BetMGM reported FY22 net gaming revenue from operations of approximately of $1.44 billion, which was ahead of expectations and up nearly [71]% versus 2021.

BetMGM remains the clear market leader in iGaming with 29% market share and continues its growing success across sports betting. BetMGM's share of the combined sports betting and igaming market is 19% across the markets in which it operates.

And that number of markets where BetMGM is active has jumped by almost a third during 2022 with launches of both retail and online sportsbooks. The footprint expanded into six new online markets: New York, Louisiana, Illinois, Ontario, Kansas, and Maryland, whilst also opening 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. And the launched have kept coming this year, with Ohio and Massachusetts in early in 2023 which now sees BetMGM live in 26 jurisdictions, with access to approximate 48% of the U.S adult population.

Notwithstanding the acceleration of state opening during the year, the business delivered a strong performance; on a same state basis, BetMGM's NGR grew 51%, and its share in those markets where BetMGM launched on Day 1 of opening is 20%.

In total, our EBITDA loss for FY 2022 will be approximately $440 million, which is in line with prior guidance. Underpinning this financial outperformance are notable operational and strategic achievements including:

• higher digital sports gross gaming margins driven by our BetMGM app redesign, build in house and delivered during Q3
• 21% year on year reduction in same-state customer acquisition due to our disciplined data-focused marketing strategy and our ever-increasing scale
• an improved approach to player bonusing delivered by our data science team.

Since launch, underlying BetMGM's successes continues to be its focus on profitability; building a sustainable and profitable business for the long term. This has been increasing evident during 2022, with NGR margins doubling year on year, as BetMGM combines its strategic bonus optimisation alongside its data-led approach to marketing and player analytics.

As such, BetMGM is close to delivering profitability, and expects to be EBITDA positive in H2 of 2023; an important milestone. Our confidence in this outlook is supported by BetMGM having already achieved profitability in several states. New Jersey, West Virginia, Pennsylvania and Michigan which are combined sports and gaming are all FY2022 contribution positive, as well as a number of the sports-only states.

Critically there have also been a significant number of developments in BetMGM's product and offering during 2022 with the team delivering numerous ongoing enhancements to BetMGM's products, games and features, particularly the redesign of the sportbook app.

BetMGM's ongoing success continues to be underpinned by the Entain Platform's unique operational excellence. The product, operational and functional developments leverage Entain's industry-leading platform capabilities across content, data-driven marketing strategy, technology, people and expertise. In addition, BetMGM's omni-channel offering leverages the strength of the MGM brand, its casino footprint and powerful MGM Rewards programme.

However, BetMGM's success in the US has not only been about expansion, market share and new state launches. Aligned with Entain's commitments, BetMGM has a matched ambition to be a leader in player education and harm prevention, and they have taken real action investing significant resources, both time and money into this area. BetMGM, along with other gaming operators, created the first industry-led online responsible gaming standards, which is a 12 point pledge to responsible gaming leadership and shall serve as an industry benchmark for years to come. They increased funding for gaming research, joined the National Council and problem gambling and implemented GameSense. BetMGM remains committed to continuously expanding our tools to proactively monitor customers and curate messaging to ensure safe and responsible play.

Entain continues to fully support BetMGM and its continued success. As announced at the January update, joint venture parents, Entain and MGM Resorts, have committed to a further combined investment of approximately $10m, which sees the business well positioned to continue to drive growth and profitability for the future. Therefore, assuming no major changes to the industry landscape and target markets, as BetMGM moves into profitability in H2 of next year, we expect the parents financial support for BetMGM to come to an end. Importantly however, although BetMGM will be in a financial position to self-fund its future growth, Entain's ongoing operational support from technology, product, data analytics, CRM and people still remains vital to BetMGM's ongoing success.

2023 will be another exciting, busy and successful year for BetMGM; the team continues to execute with purpose, passion and discipline. Already this year, BetMGM has launched in two new states, the SuperBowl is just around the corner with March Madness following hot on its heals - and that's just Q1! Entain and BetMGM look forward to updating the market on the business' performance and successes throughout the year.