GVC records US loss of $16.2m on BetMGM marketing costs
London-listed operator expects to invest an additional $40m into its Roar Digital JV in 2020
Roar Digital parent company GVC incurred a $16.2m loss in 2019 on increased investment in marketing the BetMGM brand and deploying the GVC platform in multiple states.
The firm did not break down its US revenue for the period, although group COO Shay Segev did say GGR in Q4 increased 55% on the previous year.
Digital GGR accounted for 68% of the JV’s total revenue, which rose 137% year-on-year during the quarter.
Segev said Roar Digital had secured access to 19 states, and would be live in 11 by the end of the 2020, including imminent launches in Michigan, Tennessee and Colorado.
He predicted the JV already accounted for 20% of the New Jersey gaming market and approximately 5% of the betting sector.
According to Eilers & Krejcik estimates, Roar Digital has around an online market share of 15% for gaming and 2% for betting, when considering its MGM, Borgata and Party brands.
“We want to be 10% of market share in sport in NJ over next 12 months, but it depends what our competitors are spending,” Segev told investors.
“We aren’t going to necessarily do the same because we want to make sure our marketing spend is efficient [and] in terms of integration, the heavy lifting is done and conversion is improving,” he said.
Segev emphasized that New Jersey was not a reflection of the rest of the country and predicted Roar would be in a “very strong position” in both Nevada and Michigan, with both states having a retail presence for MGM.
Elsewhere, the firm will relaunch partypoker as its national poker brand in a move that will presumably cannibalize its BetMGM and Borgata poker networks in New Jersey.
Last year, Roar received a license to operate online poker in Nevada, although a launch is not expected in the immediate future.
On the JV’s partnership with Yahoo, Segev said direct marketing for the BetMGM-powered Yahoo! sportsbook was ongoing.
As part of the agreement, Yahoo Sports users are directed to the BetMGM app via a Yahoo Sportsbook skin.
This year Roar will integrate player accounts and wallets across the apps for a seamless customer journey.
In 2020, GVC expects to invest an additional $40m each into the JV and lose between $26m to $39m as the firm expands into new states and increases its marketing spend.