By Radhika Anilkumar
(Reuters) – U.S. sports-betting platform BetMGM expects to turn profitable in the second half of 2023 after the MGM Resorts (NYSE:) and Entain joint venture’s annual revenue beat its own forecasts, aided by strong gaming margins.
BetMGM expects the first half to be investment focused as it enters new markets in the United States, Chief Executive Adam Greenblatt told Reuters, adding that activity is expected to ramp up from U.S. sporting events in the second half of 2023.
The United States gave states the right to legalise sports gambling in 2018, striking down a 1992 federal law that barred it in most places.
Britain’s Entain, which owns Ladbrokes (LON:) and Coral betting shops as well as bwin and partypoker online brands, said on Thursday that BetMGM’s annual revenue was $1.44 billion, up from its forecast of $1.3 billion.
The betting firm is on track to achieve revenue of between $1.8 billion and $2 billion in fiscal 2023, Entain said, adding that BetMGM’s joint owners were expected to invest an additional $150 million this year.
The sports betting operator’s competitor Flutter last year forecast revenue from its market-leading U.S. Fanduel business to jump by up to five times over the long term.
BetMGM reported a core loss of about $440 million in 2022, in line with its expectations, but saw its fourth-quarter online sports net revenue margins double year-on-year.
“Expected profitability in second half of 2023 should comfort investors around the ongoing market rationality. We see profit delivery in North America as a key catalyst for the sector,” analysts at Jefferies said in a note.
The online sports betting sector has rebounded as sporting events returned after pandemic-related restrictions were eased.
Earlier, British gaming operator Rank Group warned that cost-of-living pressures would continue to have an effect on visitors to its UK venues over the coming months.