BetMGM is experiencing difficulties in maintaining competitive growth due to the rising threat from prediction markets, resulting in a modest 3% increase in net revenue for the second quarter of 2026.
The joint venture between MGM Resorts International and Entain released its Q2 2026 financial results on July 28, revealing figures that fell short of market expectations.
Competitive pressures from prediction market operators, a significant drop in retail revenue due to favorable betting outcomes, and increased player reinvestment have led the company to adopt a more cautious outlook for the remainder of the year. Consequently, it has postponed its long-term profitability goals.
For the three months ending June 30, BetMGM reported net revenue of $711 million, marking a 3% increase compared to $692 million in Q2 2025. However, adjusted EBITDA saw a decline of 14%, dropping to $74 million from $86 million.
As BetMGM is not publicly traded, there is no official quarterly consensus available. The closest benchmark comes from Entain's internal consensus dated July 17, which estimated first-half net revenue at $1.43 billion and adjusted EBITDA at $113 million.
BetMGM's actual figures of $1.4 billion and $99 million fell short by 2% and 12%, respectively. Excluding the reported Q1 revenue of $696 million suggests a Q2 expectation of around $739 million, indicating an underperformance of nearly 4% against the actual $711 million.
The slowdown in revenue growth is evident over a longer period. The 3% growth in Q2 and 4% in the first half contrasts sharply with a robust 31% growth in the latter half of 2025, during which BetMGM achieved $1.44 billion in revenue, up from $1.1 billion the previous year.
The revised guidance presents a challenging path forward. To meet the lower end of the annual revenue target of $2.9 billion, BetMGM must generate $1.49 billion in net revenue in the second half, translating to approximately 3% growth compared to H2 2025. Achieving the midpoint target of $3.0 billion would require around 10% growth.
Despite the challenges in retail, iGaming remains a stronghold for the business. BetMGM's digital casino segment saw an 8% year-over-year increase in net revenue, reaching $483 million from $449 million, accounting for nearly 70% of total revenue.
The net gaming revenue per active player also rose by 9%. BetMGM claims a significant market presence, holding a 13% share of gross gaming revenue across active markets, with 20% in iGaming and 8% in online sports.
However, online sports revenue remained stagnant at $228 million. Although the handle increased by 2% to $3.49 billion, revenue conversion did not keep pace, with the gross gaming revenue margin improving to 10.3% from 9.8% year-over-year, aided by major events like the NBA Playoffs and FIFA World Cup.
Conversely, the net gaming revenue margin decreased by 10 basis points to 6.5% from 6.6%, widening the gap between gross and net hold. This indicates a rise in promotional reinvestment costs relative to handle.
Retail operations faced a severe downturn, generating virtually no net revenue for the quarter, a staggering 97% drop from $16 million in Q2 2025. Management attributed this decline to substantial winning bets from high-stakes customers, alongside a shift where casual bettors are increasingly opting for digital platforms. Meanwhile, VIP play remains concentrated in retail venues.
BetMGM's CEO Adam Greenblatt informed analysts that retail flow-through typically operates at around 50% and is expected to stabilize in the latter half of the year.