BetMGM Spent Less On Massachusetts Launch Than It Thought It Would
The costs associated with launching the BetMGM app in Massachusetts were less than expected, MGM Resorts executives said during their Q1 2023 earnings call with investors on Monday.
MGM Resorts, which owns 50% of BetMGM alongside Entain, reported $82 million in Q1 operating losses. That spending came from acquisition costs associated with the Super Bowl, March Madness, and launches of sports betting in Massachusetts and Ohio.
That $82 million was less than what MGM Resorts originally projected for the quarter.
“Actually, we came in a little under our own plan,” said Bill Hornbuckle, MGM Resorts President and CEO. “And so we don’t think we’re going to have to put any more cash in of substance.”
MGM execs believe BetMGM will be profitable in 2023
MGM Resorts executives also said they anticipate BetMGM will reach profitability in 2023. Its cost-efficient launch of BetMGM Massachusetts is no doubt helping the company reach that goal.
BetMGM launched in Massachusetts on March 10. Its app also debuted in Ohio in January. It’s now available in 26 states.
According to figures released by the Massachusetts Gaming Commission, BetMGM MA reported $45.3 million in total handle from online sports betting from March 10-31. That gives BetMGM 8.3% of the market, comfortably in third place ahead of fourth-place Barstool Sportsbook (5.4%) and behind FanDuel (33%) and DraftKings (47%).
Why the low costs in Massachusetts?
Sportsbooks often have to plunge millions into marketing and promotional offers to acquire customers. However, BetMGM’s advertising presence was noticeably smaller than that of DraftKings or FanDuel in the weeks following launch. Its $1,000 welcome bonus also trails the up to $1,250 in bonus bets DraftKings offered for a time.
That all means BetMGM didn’t spend as much to acquire customers in Massachusetts as DraftKings, for example.
Hornbuckle indicated in the earnings call that BetMGM could attain profitability nationwide by the third quarter of 2023.
“As we look at this business,” Hornbuckle said, “we’re encouraged by the improving economics that will translate into long-term profitability.”