BetMGM aims for 25% US online betting market share to beat rival DraftKings
BetMGM is targeting a long-term market share of up to 25% in the booming US online betting industry and recent data also confirm the company is well on its way to achieve the goal.
Over the three months ended February 2021, BetMGM’s US iGaming market share was 23%, “which is on course to take the number two spot in US sports betting and iGaming overall,” according to a statement.
“BetMGM expects to achieve $1 billion of net revenue from operations in 2022,” without specifying a time frame, the company adds it sees the long-term total addressable market in the US and Canada swelling to $32 billion.
That’s on the more conservative end of forecasts some on Wall Street bandy about. But it’s still well ahead of the $2.4 billion the segments combine.
Momentum Building for US iGaming industry
The update from BetMGM extends the momentum for companies with online casino exposure. It’s a segment that’s taken a backseat as analysts and investors fawn over the increasing legalization of sports wagering.
Recently, gaming operators are signaling that online gaming offers superior margins and better long-term growth prospects relative to online sports betting. MGM doesn’t shy away from that outlook, with CEO Bill Hornbuckle saying, “iGaming is the secret to this business,” and that it will eventually represent two-thirds of net income in the space.
Assuming BetMGM’s $32 billion forecast proves accurate and the operator can gain 25% share, that equals $8 billion and $4 billion of which would flow to MGM.
That would represent a significant percentage of the company’s top line in a standard operating environment. In 2019, prior to the onset of the coronavirus pandemic, MGM generated $12.90 billion in revenue with $6.52 billion attributable to casinos.
Should BetMGM prove successful in taking the number two spot among online sportsbooks, that would mean toppling rival DraftKings. That company and FanDuel combine to control over 60% of US online sports wagering market, with BetMGM ranking third.
Editing by Rachel Hu