MGM Resorts, 50% owner of BetMGM, reported net revenues of $3.3 billion for Q2 2022, up 44% compared to the prior year period. The revenue report is a success for the company, which has struggled with losses in China due to changing Covid restrictions and $71 million in operating losses in the sports betting and igaming segment.
The revenue results also show BetMGM is on track for its estimated $1.3 billion in revenues for all of 2022. In the first six months of the year, revenues reached $608 million – up 65% compared to the first half of 2021.
MGM Resorts expects the second half of the year to see increased travel, bookings, and betting handle at its Las Vegas locations as the weather cools, as well as increased sports betting performance with Q4 with football season.
The strong performance over the first half of the year has made an impact on the company’s adjusted earnings per share of $0.03 for the most recent quarter. This is an increase from a $0.13 loss per share in Q2 of 2021.
This success has also helped the company prepare for any economic turbulence. The company has worked to ensure a high level of cash flow during turbulent times.
“We’ve built an incredibly agile business over the past two years due to Covid,” MGM Resorts CEO Bill Hornbuckle said. “We will adjust and pivot quickly if we see any consumer demand slowing.”
BetMGM Q2 and Sports Betting Outlook
Net revenue for the BetMGM segment reached $337 million, up 70% compared to the second quarter in 2021. However, the operating losses for the segment were still $71 million, and the company expects to see further losses through the rest of the year.
These losses are caused by spending on advertising and recruiting new customers. Like Caesars, BetMGM is attempting to reduce its spend on advertising and customer acquisition. BetMGM has suspended sign-up bonuses in the high-tax states of New York and Pennsylvania.
During Caesar Entertainments’ earnings call earlier in the week, leadership said the company saved “hundreds of millions” by reducing ad spending and that customers were less expensive to retain than expected.
For BetMGM, this is an opportunity to limit losses. Holding the largest share of the iGaming market at around 30% and the second-largest share of the sports betting market at approximately 22%, the company has plenty of customers to retain.
The company has already started to slow ad spend and indicated there are future plans to limit spending, with the goal of reaching profitability for BetMGM in the coming years.
BetMGM is also bolstered by stronger than expected iGaming results in the first half of the year, as well as a growing market share in the new Ontario market. The company also hopes to see several states that already have legal sports betting open their markets to iGaming in the next year.
Hornbuckle concluded the call and the conversation about mobile gaming by saying, “Generally speaking on where [we] are today, with all of the opportunities in front of us, I think we’re in an amazingly great place.”