Stock Responses
MGM Resorts International has announced impressive financial results for the second quarter of 2025, with its digital sports betting venture, BetMGM, playing a significant role in the growth.
BetMGM's North America operation reported a first-ever profit, with first-half EBITDA of $109 million. This marks a reversal from a $123 million loss in the same period in 2024. The company attributes this success to disciplined player acquisition and better management of lower-value users.
The venture's profitability is also attributed to the newer analytics capabilities, which have allowed for faster reinvestment decisions and a higher concentration of high-margin betting activity at BetMGM. Artificial Intelligence has been instrumental in optimising marketing spend and refining player value models, according to BetMGM executives.
The digital growth via BetMGM forms a key part of MGM Resorts' broader strategy to bolster future earnings amid mixed results in traditional segments. The company's earnings per share dropped 70% year-over-year despite record consolidated revenues of $4.4 billion.
MGM's second-quarter performance suggests that its growing digital presence and international diversification are helping to buffer regional volatility. The performance of MGM was driven by robust gains in BetMGM and continued strength in its China operations.
The "premium mass" segment in MGM China contributed to the increase in adjusted EBITDAR. MGM China posted a 3% year-over-year increase in adjusted EBITDAR.
However, the ongoing renovations on the Las Vegas Strip dampened earnings for MGM, resulting in a decline in Strip EBITDAR by $72 million year-over-year.
Despite surpassing Wall Street expectations for the second quarter of 2025, with net revenue of $4.4 billion, shares of MGM Resorts fell approximately 4% during Thursday's session, trading around $36 as of midday.
Looking ahead, analysts project that BetMGM could reach $500 million in annual profitability by 2028, assuming sustained double-digit revenue growth and improved operating leverage.
MGM Resorts' political lobbying efforts are focused on reversing a gambling deduction cap included in former President Trump's tax legislation. This move is aimed at bolstering future earnings for the company.
BetMGM's market share dipped to 6.2% in Q2 across 14 key states, with Fanatics holding 7.6%. Despite this, the stock remains up 40% from April lows when it bottomed at around $25.
In summary, BetMGM's expanding digital footprint has been a crucial driver of MGM Resorts' Q2 2025 financial results and underpins optimistic growth prospects, aiming to make the venture a $500 million EBITDA contributor in North America, enhancing MGM’s digital segment profitability in the near future.
The success of BetMGM's North America operation, with its first-ever profit of $109 million in the first half of 2025, is not limited to sports betting alone. It extends to other digital ventures such as online casino games like poker.
Looking forward, as BetMGM aims to reach $500 million in annual profitability by 2028, it might also consider diversifying further into other casino-and-gambling offerings, such as live-dealer casino games or daily fantasy sports.
