BetMGM CEO says JV partners have “mutual respect” as he quashes M&A talk
Adam Greenblatt claims relationship between MGM Resorts and Entain is “deepening” as new tech resources to be dedicated to JV
BetMGM management have poured cold water on potential M&A moves as the operator targets $500m (£395.7m) in 2026 EBITDA.
Speaking as part of a business update, CEO Adam Greenblatt and CFO Gary Deutsch fielded questions from analysts and lifted the lid on the JV’s strategy moving forwards.
The MGM Resorts International and Entain JV reasserted it was on track for its full-year 2023 financial target of between $1.8bn and $2bn in revenue, with H2 2023 expected to be EBITDA positive.
The new $500m EBTIDA target in 2026 comes as the firm reported combined online sports betting and igaming market share of 17% in third place behind FanDuel and DraftKings.
Greenblatt and Deutsch took questions on the JV’s future, with rumblings of a potential IPO and M&A having cropped up in the past only to be quashed.
Once again, Greenblatt reiterated that M&A was not in the offing, despite analysts noting the consolidation opportunities in the US as tier-one firms continue to stretch their lead over the chasing pack.
On M&A, the CEO said: “It is incumbent upon us to maximise the opportunity for our shareholders at all times. But to be clear, we are not actively evaluating M&A at the moment in any meaningful way.
“We are always talking to everybody because we wouldn’t be doing our jobs if we didn’t. But there is nothing currently in contemplation that would require new capital from shareholders,” he added.
Elsewhere, Greenblatt was pressed on the relationship between MGM Resorts International and Entain, on which he said there was “mutual respect” between the pair.
He continued: “Our relationships with both Entain and MGM Resorts have become ever deeper. Whereas at the beginning, BetMGM was this plucky startup with mixed views on its potential to take a meaningful position, today that’s not the case.
“Today, BetMGM represents a strategic limb of both MGM Resorts and Entain and the support and engagement from each of those organisations reflect that,” Greenblatt added.
Additionally, CFO Deutsch divulged that BetMGM had lined up dedicated resources from Entain to improve its product, with the London-listed operator supplying the JV with its own tech stack.
Deutsch said: “Entain’s tech remains our signature advantage. But, looking ahead, our planning around tech cost has slightly evolved. Going forward, BetMGM will benefit from even more dedicated resources from Entain to deliver projects specific to BetMGM’s product needs.
“Some of these incremental costs will hit our financial statements. We were excited to have created a structure with Entain that enables us to adapt our product to local market needs with greater alacrity.”
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