BetMGM Sees a 26% Market Share in Q3 and Complicates Entain’s Future

United States sports betting is still in its initial developmental stages, but DraftKings and FanDuel appear to have a significant foothold in the market. However, BetMGM has been elevating its offerings and is rapidly growing to become a real competitor to those two brands. With a 26% market share reported in Q3, BetMGM has to be considered one of the leading sportsbook brands in the United States.

BetMGM’s Recent Financial Success

BetMGM is continuing to grow in market share, and in Q3 2021, it reported revenue of over $200 million, suitable for a 26% market share in states where BetMGM is live. Q3 also brought a sizable 24% increase in revenue from Q2. DraftKings is expected to generate about $230 million in Q3 revenue, just 15% more than BetMGM. With more states continuing to legalize sports betting, this market share encroachment should inspire BetMGM shareholders.

BetMGM is even more successful when you look at solely internet gaming as it is the industry leader in the United States with a 32% market share. BetMGM’s internet gaming numbers were significantly inflated in Q3 due to a relative lack of sports. It performs much better than its biggest competitors DraftKings and FanDuel, acquiring and retaining more online casino customers. BetMGM is backed by MGM Resorts International, one of the country’s most globally recognized casino and gaming brands.

BetMGM launched in Arizona, South Dakota, and Wyoming over the past month, giving it a presence in 16 states now. Arizona is already its largest market in the United States in terms of active players, and BetMGM even managed to take the first-ever sports bet from space last month. As BetMGM continues to expand its foothold in the US market, it will only become more of a valuable asset for its 50-50 partner owners, MGM Resorts International and Entain.

MGM Resorts International and Entain Partnership

Entain is a massive UK-based global gambling company with over 20 sports betting and gaming brands worldwide. BetMGM is a 50-50 joint venture partnership between Entain and MGM Resorts International, which relies on Entain’s technological foundation in player acquisition, odds pricing, and data to fuel the sportsbook. The joint venture partnership between MGM and Entain, formerly GVC Holdings PLC, was agreed upon in July 2018, shortly after the United States overturned the Professional and Amateur Sports Participation Act of 1992, which served as a federal government ban on sports betting.

How Does BetMGM’s Success Complicate Entain’s DraftKings Deal?

Last month, our Anthony Elio broke down the massive buyout offer of $22.4 billion of Entain made by DraftKings, one of the leaders in the sports betting market. MGM Resorts International had previously attempted to acquire Entain for $11 billion, significantly lower than its valuation of $18 billion. Complicating this offer is that MGM has the right to veto any agreement between Entain and another North American company. In this case, rather than vetoing the deal, MGM may attempt to leverage its position to take sole ownership over BetMGM. If it does, it would likely need to acquire some sort of technology company to support its back-end odds-making and player acquisition and retention.

DraftKings has until October 19 to formalize its takeover of Entain or walk away from the deal per United Kingdom takeover laws. The fallout of that decision will be significant for all three brands. Analysts have speculated that BetMGM may attempt to license Entain’s technology from DraftKings, but MGM Resorts International CEO Bill Hornbuckle has rejected this strategy. Hornbuckle has said this is not a viable long-term strategy as it would leave MGM without ownership of critical systems such as odds-making and player account management.

Implications Moving Forward

BetMGM’s soaring success over the past quarter may make Entain think twice before agreeing to DraftKings’ buyout, which would leave them without crucial control over the BetMGM platform. At this time, it does not seem like a partnership between the three entities is likely. However, that would surely make Flutter, the bookmaking company and owner of FanDuel and Fox Bet, very vulnerable in pole position in the US market. Regardless, BetMGM has proven it belongs in the conversation of the top sports betting companies in the United States.