BetMGM reported a significant increase in third-quarter adjusted EBITDA for 2026, more than doubling the figure to $86 million. However, the company must achieve at least $115 million in adjusted EBITDA in the fourth quarter to meet its annual guidance, a level 34% higher than its best-ever quarterly result. This comes amid ongoing declines in active customer numbers, according to BetMGM’s Q3 2026 business update released on October 13.
Profitability Rises Amid Declining Customer Base
BetMGM, the joint venture between MGM Resorts International and Entain, maintained its 2026 guidance of $300 million to $350 million in adjusted EBITDA and $2.9 billion to $3.1 billion in net revenue. The company expects to finish toward the lower end of these ranges. In the first nine months of 2026, BetMGM generated $185 million in adjusted EBITDA, leaving a $115 million gap to the $300 million minimum target. Net revenue for Q3 rose 7% year-on-year to $710 million, surpassing consensus estimates.
The earnings growth was achieved despite a 3% year-over-year drop in average monthly actives to 878,000, marking the fourth consecutive quarterly decline. While overall actives dropped, iGaming actives increased by 2%, and sports betting actives fell 9%. The company attributed the reduction in actives to a more targeted marketing focus on higher-value players, particularly in iGaming and multi-product states.
Q4 Targets Require Further Margin Gains or Cost Cuts
To meet its annual EBITDA guidance, BetMGM must deliver a record Q4 performance. If the difference between contribution and adjusted EBITDA remains unchanged from Q3, the company would need to grow its contribution by 17% in Q4. This would require either higher margins, further cost reductions, or both. Maintaining Q3’s contribution margin on the required revenue would still leave BetMGM about $11 million short of its EBITDA target for the quarter, according to illustrative calculations based on the company’s reported figures.
Brokers offered mixed views on BetMGM’s ability to meet guidance. Citizens JMP Securities forecasted a miss on the annual EBITDA target, while Macquarie Capital highlighted improved profitability and operational efficiency but did not make a prediction. Management noted that customer acquisition returns have improved and that promotions are expected to moderate, potentially supporting margins in the coming quarter.
Implications for Industry Stakeholders
BetMGM’s situation illustrates the challenge of sustaining growth and profitability in a competitive U.S. online gambling market. Operators may note the company’s shift toward higher-value players and operational efficiencies as a response to rising competition and regulatory pressures. Affiliates and suppliers could face a changing landscape as operators adjust acquisition strategies and focus on player value over volume. Regulators may observe how market conditions and competition from unregulated operators impact the performance and strategies of licensed companies.
Longer-Term Targets Delayed by Market Competition
BetMGM previously aimed to reach $500 million in EBITDA by 2027, but now expects this milestone will take longer due to increased competition, particularly from prediction markets and unregulated operators. The company has not specified how much this competition has affected its performance but expects market pressures to continue into at least mid-2027.
Key takeaways
- BetMGM must achieve a record Q4 EBITDA to meet its 2026 guidance.
- Adjusted EBITDA more than doubled in Q3, but active customer numbers declined.
- Company focuses on higher-value players and operational efficiency amid intense competition.
- Long-term profitability targets have been delayed due to market and regulatory challenges.