Q&A: Entain's CFO on why BetMGM has a bright future

Rob Wood has been with Entain since 2012 and has seen more than most. The finance chief, speaking to EGR North America, following the publication of the group’s Q1 financial results is confident on the future, despite recent bumps in the road. The FTSE 100 giant is one half of the JV behind BetMGM alongside MGM Resorts International. And while Entain’s Q1 NGR rose 6%, its report noted a 2% uptick for BetMGM NGR in the same period.

Management said there had been strong growth in customer acquisition during the reporting period thanks to the Super Bowl and March Madness, as well as noting improved app and product capabilities. Entain also said that continued igaming gains were offset by customer-friendly sports results.

The company explained that adjusting for this would mean estimated Q1 NGR would have been high single digits.

Here, Wood lifts the lid on his expectations for BetMGM for the remainder of the year and touches on the benefits of Angstrom Sports for BetMGM’s parlay product.

EGR: BetMGM’s market share for online sports betting and igaming combined is at 14% whereas it was at 18% back in the middle of last year. Could you shed any light on market share specifically, and what the feeling is internally on the 14%?

RW: We didn’t publish [igaming market share] but it’s a lot stronger. Low 20s is normally where that sits. And that is part of the reason why BetMGM’s market share has optically come off because we haven’t had any new US igaming states regulate for some time and, when that does happen, that will naturally be an advantage to us.

FanDuel and DraftKings are doing a very good job. They are growing the market further than our own expectations. So, while we might be on our own plan, market share is actually going back a bit because the market is just growing faster than we expected it to. But, as long as we’re delivering against our own numbers, that means we can see the path to $500m of EBITDA in 2026.

We do expect market share to continue to tick down but, by the time we get to the end of this year, we’re expecting to see stability as we either levelled the playing field or we remove any product gaps on NFL with the Angstrom [Sports] acquisition when the NFL season launches in September. Plus we have Nevada opening up which is a massive unlock for us.

By the time we get into the second half of this year, we should have our big developments ready and the business benefiting from them. So, we’d like to see market share stabilize and maybe even start to improve by the end of the year.

EGR: On Angstrom Sports, MGM Resorts International CEO Bill Hornbuckle has spoken highly of the accretive benefits of the acquisition. Could it be the “silver bullet” to make significant gains?

RW: Just to explain what it does and why that makes a difference, it means that we can price all betting opportunities in-house. So whether that’s a player prop or bet on a match result, if you price in-house, you can then offer the combination of those bets or the parlay.

That’s critical because same game parlay is so important, but at the moment we take the price from player bets from one source and match results from another so then we can’t offer the parlay because of the conditional probability on these two things happening. So, the way to think about is that we will be the only operator pricing everything in-house, which means full combinability of bets.

That is the most extensive parlay product, and that’s where the big competitive battleground is at the moment. So, it is the “silver bullet” in terms of taking away the weakness in our parlay product relative to the competition and by virtue of having a better parlay business, which trades at higher margins. That’s how your margin goes up. So, it all starts from pricing everything in-house.

EGR: Do you expect the engagement on the parlay product to be organic? Will there be marketing campaigns or is this a word-of-mouth process via customer experience?

RW: It’s a little bit of both. It’s so easy to download free apps. Most of the more engaged sports bettors already have our app on their phone. All you need is one hook to get them to use it and say, “that’s better” or “that’s an improvement”. There’s lots of different tricks, whether it’s through promos or marketing campaigns but, because it’s so easy to switch between one app or another, you will get players trying your new experiences. That doesn’t happen overnight, of course. And that’s why we’re more focused on the end of the year to see market share recovery rather than immediately when the NFL launches in September. But we’ve got lots to be excited about.