BetMGM expects similar losses in H2 on investment ramp up

(Reuters) -U.S. sports-betting service BetMGM said on Monday it expected to post a loss at similar levels in the second half of the year as the first six months due to the ramp up in investment in marketing and customer experience.

The joint venture between MGM Resorts and Entain, which turned a profit for the first time in the second half of 2023, posted a core loss of $123 million in the first six months that ended on June 30.

Shares of Entain were down more than 7% at 598.8 pence as of 0850 GMT, while those of MGM were down 0.2% in premarket trading.

CEO Adam Greenblatt said, "2024 is a year of investment, focusing on improving our customer experience and stepping up our level of investment in players."

Founded in 2018, BetMGM has been ramping up its investments and expanding its presence in North America as it faces tough competition in the market with bigger players like Flutter's Fanduel and Draftkings.

The venture, which had earlier said it was targeting a core profit of $500 million by 2026, now expected to achieve the milestone in the "coming years".

"We believe today's statement suggests that, with the top spots in the U.S. market now secured by FanDuel and Draftkings, and with some other brands creeping up in some states, marketing intensity in U.S. online sports betting and gaming will not reduce" Roberta Ciaccia analysts at Investec said in a note.

Ciaccia added that it would be challenging for BetMGM to hit the long-term target of more 30% EBITDA margin.

BetMGM, the third-largest online gambling company by revenue in the United States, said it expects revenue to grow in the second half of the year and into 2025.

(Reporting by Radhika Anilkumar in Bengaluru; Editing by Subhranshu Sahu and Jacqueline Wong)