BetMGM is reducing investment in lower-return US sports betting markets as competition from prediction platforms puts additional pressure on operators. The company is directing more resources toward online casino gaming and higher-spending customers, following a third quarter that delivered revenue growth despite a decline in active sportsbook users.
CEO Adam Greenblatt outlined the strategy during BetMGM’s October 13 business update, explaining that the MGM Resorts and Entain joint venture has become more selective about customer acquisition and market spending.
The operator reported third-quarter net revenue of $710 million, representing a 7% year-over-year increase. Adjusted EBITDA reached $86 million, up 112% from the corresponding period in 2025.
“We are hyper-focused on making sure that we look after our premium players in both sports and gaming,” Greenblatt said. “The more targeted approach is working.”
BetMGM currently holds approximately 14% of the combined gambling market across its active jurisdictions, including a 20% share of iGaming and 8% of online sports betting.
Online Casino Markets Receive Greater Investment
iGaming now accounts for approximately 70% of BetMGM’s business, with quarterly net revenue increasing 6% to $483 million. Average monthly active players in the segment grew 2%.
The company has benefited from its June relaunch of the Borgata brand, which lifted average daily active users in New Jersey and Pennsylvania by 28% compared with February levels.
BetMGM has also identified opportunities in Alberta’s newly regulated online gambling market, where its initial performance has supported expectations for further growth.
The operator is concentrating on jurisdictions where customers can access multiple gambling products. Nevada remains another priority, with online sports betting handle increasing 8% during the quarter.
Greenblatt explained:
“This has seen us increase our focus on iGaming, multi-product states, Nevada, and most recently Alberta, as well as higher value, higher staking players, particularly in online sports betting (OSB), while also reducing investment in certain lower return OSB-only markets.”
The decision affects spending priorities in states where BetMGM offers sports wagering without online casino gaming, including Arizona, Colorado and New York, among others.
Prediction Markets Influence Sportsbook Spending
Greenblatt identified prediction market competition as a significant factor behind BetMGM’s changing investment strategy.
The company faces substantial promotional spending from platforms offering sports-related event contracts, particularly in jurisdictions that have legalised sports betting without permitting online casinos.
Rather than increasing marketing expenditure to compete for every customer, BetMGM is prioritising segments that generate stronger financial returns.
Greenblatt expects competitive pressure to continue at least into mid-2027. He also anticipates that the US Supreme Court will support state and tribal authority over prediction market regulation during its 2026-27 term.
According to SBC Americas, he criticised recent Commodity Futures Trading Commission rules distinguishing sports wagers from event contracts, describing the changes as “cosmetics in the pursuit of survival.”
“To the extent prediction markets survive, I think it is just a matter of time before the casino-like products reemerge in some other incarnation or some other form,” he said.
Despite reducing marketing spending in selected markets, BetMGM reported improved financial performance from its remaining sportsbook customer base.
Average monthly online sports active users declined 9% year over year. However, wagering volume per active customer increased 13%, while net revenue per user rose 18%.
Total online sports handle reached $3.24 billion, representing 3% growth, and net revenue increased 7% to $216 million. Gross hold improved from 10.1% to 10.7%, supported partly by greater participation in parlays and same-game parlays.
Greenblatt said the decline in customer numbers reflected deliberate acquisition decisions rather than an unexpected deterioration in performance.
Lower Acquisition Costs Support Profitability Targets
BetMGM has recorded an improvement in customer acquisition economics since the FIFA World Cup, allowing it to pursue customers at lower marketing costs.
“Our cost per acquisition has meaningfully reduced, and our predicted returns, as measured in months to payback; we haven’t seen returns this favourable since the beginning of the year and the back end of last year.”
Greenblatt also reported stronger-than-expected first-time depositor activity and encouraging reactivation rates among premium customers during September.
Macquarie analysts identified improved acquisition efficiency and payment processing as factors supporting BetMGM’s performance. They also highlighted the operator’s ability to maintain market share while reducing sportsbook marketing expenditure.
The company expects customer retention to become increasingly important as its existing markets mature.
BetMGM maintained its full-year 2026 guidance of $2.9 billion to $3.1 billion in net revenue and $300 million to $350 million in adjusted EBITDA, with both figures expected toward the lower end of their respective ranges.
Adjusted EBITDA reached $185 million during the first nine months, leaving approximately $115 million required in the final quarter to meet the lower end of annual guidance.
The company is relying on the NFL season and continued engagement from higher-value customers to support its fourth-quarter performance.
Greenblatt also indicated that BetMGM now expects to reach $500 million in annual adjusted EBITDA sometime beyond 2027.