The chief executive officer of MGM Resorts International is hopeful BetMGM can win back market share from rival sports betting sites following a recent purchase by the company’s partner in the joint venture.
MGM Resorts CEO Bill Hornbuckle said Wednesday that the recently announced acquisition of Angstrom Sports by Entain PLC — which splits ownership of BetMGM with MGM — could improve odds and offerings at the online sportsbook, which has lost ground to DraftKings and FanDuel in the U.S.
In short, BetMGM customers can expect more “high-margin” bets dangled in front of them in the future, such as same-game parlays that lose more often than straight wagers but offer players the opportunity to win a lot by gambling a little.
Hornbuckle said the deployment of Angstrom’s capabilities will happen in stages, starting in the upcoming football season and beyond, so it will take a bit of time before BetMGM users notice a change.
“I think the opportunity with Angstrom will drive more product, more parlay, more frequency and recency around bets, in-game and otherwise,” the MGM CEO added during a conference call for analysts and investors. “And those are big-margin businesses.”
On the comeback trail
BetMGM has seen its share of the legal sports betting market in the U.S. shrink as its parlay-proficient rivals win over more customers.
While BetMGM remains the leader in iGaming in the U.S., with a market share north of 25%, including online sports betting in that equation drops that share into the teens and to third place overall, according to MGM's second-quarter investor presentation. Harnessing the pricing and predictive power of Angstrom is part of the plan to reverse that trend.
“Our product is not where we want it to be,” Hornbuckle said. “I think the moves that we're now making, though, with Entain, our partner, with the moves we're going to make with Angstrom as an onboarded partner for BetMGM will get us to a place where we'll be back in that game in a meaningful way and hopefully begin to gain some share back.”
Planning for profitability
The comments came after Las Vegas-based MGM announced its financial results for the three months ended June 30, to which BetMGM contributed. MGM, which operates brick-and-mortar casinos such as the Luxor and MGM Grand, reported a 21% increase in net revenue for the second quarter, to $3.9 billion. However, profit attributable to the company for the quarter fell to $201 million from $1.8 billion because of a $2.3-billion gain in Q2 of 2022 tied to the sale of a real estate investment trust, among other things.
MGM's share of BetMGM's operating loss during the quarter was approximately $22.5 million, down from $71.2 million a year earlier. Nevertheless, BetMGM managed positive earnings before interest, taxes, depreciation, and amortization in the second quarter and is expected to remain profitable on that basis in the latter half of 2023.
MGM owns 50% of BetMGM, while U.K.-based Entain owns the other half. It was Entain that announced in July it was acquiring Angstrom Sports, "a specialist provider of next-generation sports modeling, forecasting and data analytics," to help BetMGM.
“We are delighted that Angstrom will be joining Entain, enabling us to accelerate the development of the Entain Platform,” Entain CEO Jette Nygaard-Andersen said in a press release. “Their next generation forecasting, pricing and risk management capabilities will unlock significant opportunities across BetMGM’s US sports betting offering, particularly in the fast-growing markets of parlay and in-play wagering.”
