BetMGM raises FY revenue forecast on “earlier than expected” sports return
GVC CEO Shay Segev estimates US-wide market share of 17% for BetMGM as New Jersey igaming share grows 4% in Q3
GVC has increased the 2020 net revenue forecast for its BetMGM US JV by $30m to $160m after a major boost from the earlier than expected return of sports.
In its Q3 financial report, GVC said the JV had increased its nationwide market share to 17%, while its leading brand, BetMGM, gained an igaming market share of approximately 22% in New Jersey in August.
Eilers and Krejcik Gaming placed Roar fourth on its list of US-wide igaming revenue share in July, estimating the operator held 10% of the market.
GVC CEO Shay Segev suggested BetMGM had 18% of the New Jersey gaming market back in H1, with the rise attributed to the company doubling in size since January and a higher marketing spend than anticipated.
As one of just two online casinos in West Virginia, BetMGM’s market share reached 30% in the state in August according to Segev, while it hit the 15% mark for sports betting.
“Earlier in the year BetMGM launched online sports betting in Indiana, Colorado and West Virginia and added igaming in West Virginia during this quarter,” GVC said in its report.
“[BetMGM’s] combined market share in these three markets is tracking in line with our expectations of 15% to 20%,” the operator added.
On marketing, GVC CFO Rob Wood said US spend was higher than anticipated in July because sport returned sooner than expected.
“It was more than was envisaged in early July because sport has returned quicker and fuller than we anticipated at the start of summer and that is why NGR [Net gaming revenue] is up as well,” Wood said.
“Losses will be higher in 2020 as a result as we’ll spend around $150m on marketing in 2020. With states ramping up in 2021, that number will be higher, and losses will be higher as well,” he warned.
In July GVC pledged to increase the investment in its US business to $450m alongside MGM.
In comparison, DraftKings said this week it had spent up to $220m on marketing in Q3 on scaled-up customer acquisition spending.
DraftKings also reported a similar uptick of online casino players in Q3, stating that Covid-19 has resulted in increased response rates to ad spend.