Key Points
- BetMGM’s Q3 net revenue is up 7% to a tidy $710m, with its EBITDA jumping 112% to $86m.
- But Online sports action dropped 9% after BetMGM spent less money in the lower-return sports-only states, not what you’d call a success story.
- Meeting even the lower end of EBITDA guidance in Q4 would require about $115m in revenue… which is a pretty high bar to set, especially considering Q4 hasn’t even shown that kind of figure yet for 2026.
BetMGM’s $710m Quarter Built on Fewer, but Wealthier Customers
The idea that BetMGM made more cash from fewer people this summer is now at the heart of its story, for good or ill. The joint venture between Entain and MGM Resorts just announced third-quarter net revenue of $710 million, a 7% year-on-year increase. And adjusted EBITDA more than doubled from $41 million to $86 million.
However, this good news is somewhat tempered by the news that the number of people that use BetMGM each month has actually fallen. Average monthly activities dropped 3% to 878,000, down from 902,000 a year earlier. But its investors in London didn’t seem too fazed; Entain shares actually rose 4% following the update, according to Reuters.
iGaming Still Doing Most of the Heavy Lifting
Online casino revenue jumped 6% to $483 million, which is roughly two-thirds of everything BetMGM earned in the quarter. The key drivers here have been the exclusive games, and particularly the new Game of Thrones titles in the US, Ontario, and Alberta. BetMGM reckon that was the most successful game franchise launch in their history, and they also rolled out a progressive SideBet jackpot in Michigan and West Virginia.
Alberta deserves a close look here, not just because it’s a new market for BetMGM, but because it’s been a real game-changer. Chief Financial Officer Gary Deutsch pointed out that Alberta added around two percentage points to iGaming growth and that around 20% of all new customers signed up during the quarter came from Alberta. If we exclude that boost, then casino growth in BetMGM’s older markets looks a lot more like 4%.
Some of the casino growth did come from closer to home; a refresh of the Borgata brand has helped it regain momentum, with average daily activities rising 28% compared to the February launch.
Sports Revenue Got a Bigger Share of the Pie
Online sports revenue rose 7% to $216 million, meanwhile betting volume only grew 3% to $3.24 billion. Better margins were the key difference here. Net gaming revenue hold, the margin that feeds the bottom line, improved to 6.7% from 6.4%. Gross hold, measured before bonuses, rose more sharply to 10.7% from 10.1% and that was largely down to a better take from parlay betting.
But here’s the thing, we had fewer people placing those bets overall. Although each customer is now worth a lot more to BetMGM. Monthly online sports activity dropped 9%, but handle per active rose 13% and net revenue per active jumped 18%. California, where BetMGM has also started offering online and retail betting, even saw an 8% rise in online sports handle.
The sports calendar didn’t play entirely to BetMGM’s strengths. The World Cup certainly helped the July figures, but September had one fewer batch of NFL and college football games.
BetMGM Steps Back from Sports-only States
“The reduction in sports customers is exactly what we intended to do,” said Greenblatt during the 13 October analyst call. “Our focus is to make sure that we protect our best players in sports and casino,” he added. “Our more targeted approach is paying off.”
BetMGM is reducing its budget in lower-yielding markets where it operates only sports betting without an online casino, Arizona, Colorado and New York. Resources are being redirected to casino states and jurisdictions, including Nevada, Alberta, and high-staking bettors.
Prediction markets provide an explanation for that. Licensed sportsbooks are facing increasing challenges from platforms such as Kalshi. Besides, FanDuel, DraftKings, and Fanatics have all launched their products. During the 13 October call, Greenblatt conceded that this risk persists. However, he dismissed the platforms’ attempts to circumvent the new CFTC definitions by calling that approach “cosmetics in the pursuit of survival.” Moreover, he expects, and hopes that the Supreme Court will rule in favour of state regulation.
A Far Cry From Last Year’s Performance
Last year, BetMGM presented a completely different quarterly report. Its Q3 2025 revenues grew by 23%, and BetMGM increased its full-year outlook for the second time. The number of monthly active customers grew, too, by 6% to 902,000.
The start of 2026 proved to be much more modest. BetMGM reduced its revenue forecast at the beginning of the year to the $2.9 billion to $3.1 billion range from $3.1 billion to $3.2 billion. Its second-quarter adjusted EBITDA fell by 15% to $74 million, with online sports revenues remaining stable.
These challenges are evident in the ranking as well. Fanatics has managed to push BetMGM to fourth place in the US online sportsbooks list. Even the smallest revenue line has become smaller: retail/other revenue decreased by 50% to $23 million for nine months.
Money Starts Coming Back to the Owners
For Entain and MGM stockholders, the return of cash flows is even more important than growth rates. In the current quarter, BetMGM paid $68 million to its owners: $18 million in parent fees and $50 million in dividends. Contribution increased by 32% to $175 million; it exceeded $135 million in iGaming and was positive for online sports.
Q4 Must Be Better Than Every Other Quarter Of 2026
Adjusted EBITDA hit $185 million, which is 24% higher than the $150 million it made last year. Full-year guidance stands between $300 million and $350 million, with BetMGM forecasting itself near the bottom end. Getting there means making about $115 million in the fourth quarter, which is a full third higher than the $86 million made in Q3, the best performance seen by BetMGM in 2026.
Revenue is a smaller challenge, but one worth facing nonetheless. BetMGM made $2.12 billion, so it needs around $784 million in Q4 to get to $2.9 billion, which is just under 10% better than its highest quarter in 2026. The $500 million EBITDA target stays in place, although now management says it is further away into the future, past 2027.
Expert Take: Slimmer BetMGM And Still The Same Big Number
We believe BetMGM is cutting down to improve margins and the market loves it. While the 112% increase in EBITDA sounds impressive, until you see that the previous year’s number was only $41 million. Management itself points to decreased marketing costs as being responsible for most of the increased margins. We believe it makes sense as a solution, but a fix is not the same as growth.
The sportsbook concerns us the most, due to the heavy reliance on margins. Revenue grew by 7% while the handle increased only 3%. Margins can be very volatile when bettors get on a winning streak. DraftKings cited the favourable outcomes of the customer-friendly sports for the decline in Q2 revenue. Flutter, the owner of FanDuel, noted the adverse swing in the sports results impacted the US revenue growth negatively by six points. We would not consider BetMGM’s margins to be sustainable.
Greenblatt’s relaxed attitude towards the prediction markets business also requires closer scrutiny. His confidence in this segment is based in part on the Supreme Court decision, which is not guaranteed, while other operators have already developed their product line.
Verdict: the casino unit is solid, the Alberta market looks promising and the cash flow is real. It will be interesting to see whether BetMGM will grow in Q4 or continue shrinking but improving the margins. Entain will report on 15 October and MGM on 28 October.
Explore more:
Share
3 views
