Entain shares jumped on Tuesday after the gambling company's BetMGM joint venture said it anticipated turning a profit this year. BetMGM has never recorded an annual profit since its founding in 2018 as a tie-up between Ladbrokes owner Entain and US-based casino operator MGM Resorts. The group revealed its losses before nasties almost quadrupled from $62million in 2023 to $244million last year. It blamed the performance on higher investment aimed at gaining new consumers and a $50million cost from punter-friendly sports results in December.
However, BetMGM expects its positive earnings before nasties in 2025, supported by net revenue surging to between $2.4billion and $2.5billion, equivalent to a double-digit percentage uptick. Shares in Entain soared 7.5 per cent to 747.2p by late Tuesday afternoon following the announcement, making them the FTSE 100 Index's top riser, although the firm's shares have still fallen by around a quarter over the past 12 months.
Forecast: Entain shares jumped on Tuesday after the gambling company's BetMGM joint venture said it anticipated becoming profitable this year. Adam Greenblatt, chief executive of BetMGM, said: '2024 was a year of investment and rebuilding of momentum for BetMGM.'. He added: 'Our leading iGaming business continues to grow strongly and deliver attractive returns. We also have an exciting opportunity in online sports, having made meaningful progress in 2024.'.
Its net revenue increased by 7 per cent to $2.1billion, thanks mainly to online gaming sales going up by 13 per cent to $1.5billion. BetMGM was also boosted by the number of average monthly active users, which climbed by 14 per cent during the year and by 55 per cent year-on-year in the fourth quarter alone. The joint venture has driven much of Entain's growth in recent years as the business has capitalised on the legalisation of sports betting in many US states, such as Illinois and Massachusetts.
According to the American Gaming Association, gross gaming revenue from sports gambling in the US totalled just $400million in 2018 before skyrocketing to $11billion in 2023. Broker Jefferies predicts the overall US market could expand to $33.2billion by 2030, compared to $12.6 billion last year. BetMGM's trading update comes around three weeks after Entain declared that it expected annual earnings to be at the top of its £1.04billion to £1.09billion guidance range.
In the opening nine months of 2024, the Coral and FoxyBingo owner saw its gaming revenues swell by 9 per cent due to strong online growth offsetting weaker sales at brick-and-mortar locations. Affiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.
