BetMGM trims 2026 revenue outlook as competition and payouts weigh on results

BetMGM lowered its 2026 revenue forecast after a softer-than-expected first quarter in its online sports betting segment, with management citing unfavorable betting outcomes and rising competitive pressures across the U.S. market.

Chief Financial Officer Gary Deutsch summed up the quarter as “bad results for the house,” pointing to bettor-friendly outcomes that increased payouts and compressed margins. Net revenue in the sports segment rose 4% year over year, but the gains were offset by higher promotional spending and those adverse results.

Chief Executive Adam Greenblatt described the start to the year as steady but below expectations, noting that performance was impacted by the same unfavorable outcomes.

The company now expects full-year revenue between $2.9 billion and $3.1 billion, compared with its earlier guidance of $3.1 billion to $3.2 billion. Adjusted core profit guidance was maintained at $300 million to $350 million, although expectations are now toward the lower end of that range.

Chief Executive Adam Greenblatt

The revision comes as the U.S. sports betting market continues to expand, supported by state-level legalization and sustained marketing by operators, even as regulatory scrutiny and tax pressures intensify.

BetMGM said it is adjusting its strategy by reducing marketing spend in online sports betting-only states and prioritizing areas where it has stronger competitive advantages. An element of this approach is a focus on higher-value customers, with the company reporting a 23% increase in handle from active users driven by an improved player mix and fewer lower-value participants.

Management said premium customers have remained resilient despite the increasingly competitive sector, with stronger engagement observed at the upper end of the customer base in both sports betting and iGaming.

Customer acquisition costs have risen notably, which Greenblatt attributed to aggressive spending by new entrants. He referred to them as “new sports betting companies … they call themselves prediction markets,” and said BetMGM, alongside 40 state attorneys general, is awaiting potential U.S. Supreme Court consideration of what it views as a states’ rights issue related to those platforms.

Asked about the impact of such competition, Greenblatt said: “I don’t control what others choose to spend, underpinning bad investment. We’re controlling the controllable.”

He indicated that current levels of spending across the sector are unlikely to persist over the long term and suggested that market conditions would eventually normalize. Greenblatt also said the company expects many customers drawn to competing platforms to return over time.

“The majority of these players will return to us,” Greenblatt said, citing product quality, customer service, and the integration of land-based rewards through MGM Resorts. “The value proposition is better for most players,” he added.

In iGaming, BetMGM reported stronger-than-expected customer acquisition, albeit at higher costs, and said it remains comfortable with the long-term returns from those investments. Player engagement remains high, with users active multiple days per week, and the company plans to expand its content offering, including established gaming franchises.

However, growth in iGaming has been constrained by the absence of new state launches since 2022. Greenblatt described the current competitive environment as a market evolution and expressed cautious optimism about future expansion, including the potential for legalization in Virginia by 2027.

He also noted uncertainty in Maine, where iGaming legislation could still face repeal through a public vote, though he said the outcome would not materially affect the company’s outlook.

BetMGM paid $3 million in parent fees to Entain and MGM Resorts International during the quarter, which management attributed to seasonal factors. The company maintained its longer-term target of generating $500 million in annual cash flow by 2027. 

Following the update, Entain shares initially fell before recovering to trade 1% higher, while MGM Resorts shares were down about 1% in premarket trading.