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BETMGM FY23 UPDATE: FY23 NET REVENUE FROM OPERATIONS OF $1.96 BILLION AT TOP END OF GUIDANCE

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BetMGM, LLC (“BetMGM”), one of the leading sports betting and iGaming operators across the U.S., jointly owned by MGM Resorts International (NYSE: MGM) (“MGM Resorts”) and Entain plc (LSE: ENT) (“Entain”) is today providing an update on performance for FY 2023.

  • BetMGM delivered a strong FY 2023 financial performance (based on unaudited results)
    • Net revenue from operations grew 36% year over year to $1.96 billion1, at the upper-end of $1.8-$2.0 billion guidance range2
      • Same-state growth in net revenue from digital operations of 14%
      • Key metrics across both iGaming and Online Sports Betting improved year over year, including average monthly actives, FTDs, hold percentages, bonus levels, NGR per active, and CPAs3
    • EBITDA positive in the second half of 2023 with expected FY 2023 EBITDA loss of approximately $67 million4
  • Established as a leading operator across North America, live in 28 markets with access to 49% of adult population5
    • Four new markets launched during the year: Ohio (online and retail), Massachusetts (online and retail), Puerto Rico (online) and Kentucky (online and retail)
    • 14% market share in Sports Betting and iGaming in the U.S. and 22% in Ontario6
    • Secured market access with Charlotte Motor Speedway ahead of expected March 2024 launch of newly legalised sports betting market in North Carolina, pending regulatory approval
  • Further operational progress supported by technology, product and capability enhancements, positions BetMGM to drive growth going forward
    • Seamless execution of single account single wallet across 21 markets ahead of the 2023 NFL season
    • Enhanced sports betting experience with improved speed7, broader market coverage and new differentiated bet types
    • New in-house and exclusive games, including Dual Play Roulette, as well as largest progressive jackpots underpinning market leading iGaming offering
  • December 4th BetMGM business update set out strategic roadmap to drive growth in 2024
    • Expanding the depth and breadth of our sports offering by leveraging Angstrom’s sophisticated modelling to support innovative and original products, including player-popular Same Game Parlay (“SGP”), SGP+ and new LIVE SGP products
    • Continue to deliver market-leading and engaging gaming experiences that are more personalized and differentiated, including exclusive and MGM-branded content
    • Increasingly investing in marketing and player acquisition as sports product and player retention continue to improve
    • Unlocking BetMGM’s unique omnichannel advantages, particularly in Las Vegas, Nevada
      • Launched new improved app in January with single wallet functionality expected later in 2024
      • Leveraging Las Vegas sports teams and tentpole events, for example BetMGM’s first Big Game commercial featuring Tom Brady, Wayne Gretzky and Vince Vaughn
  • Reiterating guidance from December 2023 business update of targeting approximately $500 million of EBITDA in 2026
  • Recognized as Digital Operator of the Year by Global Gaming Awards, Online Casino of the Year by American Gambling Awards, and Casino Operator of the Year by EGR North America and SBC Awards North America.
  • Ongoing commitment to industry leadership in player safety and responsible gaming
    • Secured five-year extension with GameSense program, providing player tools and capabilities to play responsibly
    • Partnered with nine NFL teams to promote responsible gambling in stadiums during games
    • Piloted the first of its kind program with Kindbridge Health to evaluate efficacy of offering self-excluded individuals’ referrals for problem gambling treatments

Adam Greenblatt, CEO of BetMGM, commented:

“Our performance in 2023 demonstrates our commitment to delivering on our promises. We were able to achieve strong organic growth, while executing against key strategic initiatives that lay the foundation for 2024 and beyond. The attainment of EBITDA profitability over the last three quarters of 2023 validates the effectiveness of our business model and provides the basis from which to invest further in expanding our sports offering through the integration of Angstrom and leveraging our largely untapped Las Vegas omni-channel advantages. With this comprehensive roadmap in place, we can focus on driving accelerated player acquisition and retention and strengthening our current market position. This clear strategic direction underpins our confidence in achieving our targets and building long-term, sustainable value for shareholders.”

Notes

(1)

FY2023 net revenue for BetMGM on a GAAP basis is expected to be approximately $1,920 million, which includes approximately $64 million related to Nevada MGM operations for which BetMGM records on a net basis as BetMGM is considered to be the agent in the Nevada transactions for GAAP purposes

(2)

FY2023 non-GAAP net revenue guidance established in January 2023

(3)

Key metrics include average monthly actives, first time depositors (“FTDs”), hold percentages, bonus levels, net gaming revenue per active (“NGR per active”), and cost per acquisition (“CPAs”)

(4)

BetMGM has not completed its financial closing procedures for the three months and year ended December 31, 2023 and actual results can differ materially from these estimates.  In addition, BetMGM’s independent registered public accounting firm has not audited, reviewed or performed any procedures with respect to these preliminary estimates. During the course of the preparation of BetMGM’s audited financial statements, BetMGM and its auditors may identify items that would require material adjustments to these estimates. As a result, these estimates constitute forward-looking statements and, therefore, investors are cautioned that they are subject to risks and uncertainties, including possible adjustments. 

(5)

BetMGM operates iGaming and Online Sports Betting in five markets and Sports Betting only (combined online and retail) in 23 markets.

(6)

Market share for last three months ending November 2023 by GGR including only U.S. markets where BetMGM was active; internal estimates used where operator-specific results are unavailable. Ontario market share reflects the three-month period through December 2023.

(7)

 Google Core Web Vitals validate that BetMGM in now one of the fastest apps in the U.S.

 

Forward-looking statements:

This document contains certain statements that are forward-looking statements. They appear in a number of places throughout this document and include statements regarding our intentions, beliefs or current expectations and those of our officers, directors and employees concerning, amongst other things, results of our operations, financial condition, liquidity, prospects, growth, strategies and the business we operate. Examples of these statements include, but are not limited to, BetMGM’s expectations regarding its financial outlook (including EBITDA guidance). These forward-looking statements include all matters that are not historical facts. By their nature, these statements involve risks and uncertainties since future events and circumstances can cause results and developments to differ materially from those anticipated. Any such forward-looking statements reflect knowledge and information available at the date of preparation of this document. Among the important factors that could cause actual results to differ materially from those indicated in such forward-looking statements include the significant competition within the gaming and entertainment industry; BetMGM’s ability to execute on its business plan; changes in applicable laws or regulations, particularly with respect to iGaming and online sports betting; BetMGM’s ability to manage growth and access the capital needed to support its growth plans; and BetMGM’s ability to obtain the required licenses, permits and other approvals necessary to grow in existing and new jurisdictions. In providing forward-looking statements, Entain is not undertaking any duty or obligation to update these statements publicly as a result of new information, future events or otherwise, except as required by law. Other than in accordance with its legal or regulatory obligations (including under the Market Abuse Regulation (596/2014), the Listing Rules, the Disclosure Guidance and Transparency Rules and the Prospectus Rules), Entain undertakes no obligation to update or revise any such forward-looking statements. Nothing in this document should be construed as a profit forecast. Entain and its directors accept no liability to third parties in respect of this document save as would arise under English law.

Non-GAAP Financial Information:

This press release includes net revenue from operations and estimated EBITDA, which have not been prepared in accordance with GAAP. BetMGM believes this presentation, which it uses for its own analysis of operations, is useful in that it reflects the true economic performance of the business. If BetMGM presented net revenue from operations in accordance with GAAP, then BetMGM would present the revenues associated with its Nevada digital and retail sports betting operations different, until such time as BetMGM is licensed as a Nevada gaming operator. Currently under GAAP, its calculation of Net Revenue would be on a basis net of operating costs, such that the GAAP reported Net Revenue would be lower than the Net Revenue reported herein, with Net Income remaining the same.

EU Taxes

Malta Prepares For EU Budget Battle To Stave Off Gambling Levy

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Malta’s Prime Minister has said his nation will veto any attempts by the EU to introduce a bloc-wide online gambling levy, threatening to place the industry at the centre of febrile European politics.

Robert Abela has told Malta’s parliament that he would use his nation’s member state veto to block the passage of the next EU budget, if a proposed gambling levy is included.

The budget, formally known as the Multiannual Financial Framework (MFF), lays out how the EU will spend its €2trn budget from 2028 to 2034.

The prospect of adding a continent-wide tax to the budget remains only a proposal, but the idea has heavyweight backing.

Vice-president of the European Parliament Victor Negrescu is spearheading these efforts, arguing that a fast-growing digital industry that generates billions in revenue should be subject to EU-level taxation.

Negrescu says that the levy could generate between €2-4bn every year.

“This industry fully benefits from the EU’s single market, digital infrastructure and crossborder access, but operates under fragmented rules, unequal taxation and insufficient enforcement,” he said.

The online gambling sector might well quibble with the specifics of these claims.

The idea that it “fully benefits” from the EU single market may have been unassailably true in the point-of-supply era, but the subsequent fragmentation of national rules that Negrescu refers to has significantly complicated that picture.

Nevertheless, backing for the levy from a senior European politician has naturally spooked the industry and its primary champion within the EU, Malta.

The levy would be so damaging to Malta’s economic interests that it is willing to use its most powerful EU instrument by executing a veto in the European Council in order to block the budget from being approved.

That would likely plunge the island nation into the centre of a political firestorm, but recent history suggests that smaller EU nations and their allies can successfully disrupt budget negotiations.

During discussions over the 2020 EU budget, Poland and Hungary successfully secured concessions after they both threatened to veto the MFF over rule-of-law requirements.

Malta will also hope to rely on support from the Friends of Cohesion, an informal alliance of 16 nations concerned with regional development, of which it is a part.

Negrescu’s pledge to pair his levy with a “clear EU directive against illegal and unlicensed platforms” is unlikely to satisfy the online gambling industry, despite growing complaints of a rampant black market from a number of quarters.

Malta strikes again

In simple terms, Malta is seeking to protect an industry which accounts for 10 percent of its gross domestic product.

The nation has shown a clear willingness to ignore the EU’s wishes in order to shield the many gaming firms that host their headquarters within its borders.

Most notably, the creation of Bill 55 has successfully protected local companies from having to repay hundreds of millions of euros in player refund settlements.

Ongoing cases before the Court of Justice of the European Union suggest that Europe’s top judges will soon rule against Bill 55, which is now Article 56A of Malta’s gambling act.

The European Commission also launched infringement proceedings against Malta over the provision

Tax troubles.

There are so far no specifics on how the levy would be calculated or what value it would be set at, but beyond Malta an additional levy would also be extremely challenging for operators in European markets already struggling with high tax burdens.

This includes the Netherlands, where a government report released this week has shown that staggered increases to taxes of 37.8 percent of gross gambling revenue (GGR) have failed to deliver any benefit to the country’s budget.

Even a relatively slight increase to this tax rate could send more operators scurrying out the market and see channelisation dive further than its current rate of 55 percent.

Nations like France, where online betting is taxed at 59.3 percent of GGR, or Portugal, with its 8 percent turnover tax on online sports betting, would also feel an impact.

Negotiations over the contents of the EU budget are set to continue for several months, with the approval process expected to be completed in late 2026 or early 2027.

Leaders in the Council of Europe have agreed to come to a preliminary deal on the MFF by October, according to a coordinated statement issued earlier this month.

Malta’s devout opposition to a possible gambling levy is just one of a range of issues under discussion, including a stark divide between nations such as Germany, which favour spending cuts, and the Friends of Cohesion, who want additional cash for agriculture and regional funding.

The post Malta Prepares For EU Budget Battle To Stave Off Gambling Levy appeared first on EE Gaming | Global iGaming & Tech Intelligence Hub.

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G2 drops limited-edition One Piece streetwear capsule on June 25

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The esports organisation’s second anime apparel collaboration will be sold exclusively via g2esports.com/shop.

G2 is launching a limited-edition G2 | One Piece capsule collection on June 25, with the drop available exclusively through the organisation’s online store at g2esports.com/shop.

The collection is inspired by One Piece’s Gear 5 Monkey D. Luffy and includes hoodies, zip-ups, t-shirts, caps, sleeves, and tote bags. According to G2, the items use a black-and-white palette and feature a minimalist embroidered logo alongside a custom G2 | One Piece Jolly Roger that combines the G2 samurai emblem with Luffy’s straw hat.

“At G2, we’re continuing to push the culture and fashion of esports beyond competition alone, and this One Piece collection is a natural extension of that,” says Sabrina Ratih, COO of G2 Esports. “We wanted to create a capsule that continues to elevate the esports fashion space – understated, premium, and stylish enough for everyday wear, while still carrying the spirit of adventure, ambition, and individuality that defines One Piece and G2 alike. Every piece is designed to bridge the gap between fandom and everyday style, and continuing our mission to redefine what esports fashion can be.”

G2 described the drop as its second anime collaboration, following a previous apparel collaboration with Solo Leveling. The company positioned the release as part of its broader effort to connect esports, anime, and streetwear.

One Piece debuted in 1999 and remains one of the largest anime franchises globally. G2 cited over 600 million manga copies sold and more than 1,160 episodes for the series.

The post G2 drops limited-edition One Piece streetwear capsule on June 25 appeared first on EE Gaming | Global iGaming & Tech Intelligence Hub.

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Ygam joins four UKRI-funded gambling harms research partnerships

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Projects sit within UKRI’s Research Programme on Gambling and the GHR-UK Evidence Centre, backed by the statutory levy.

Ygam has been named as a partner on four projects funded through the UKRI Research Programme on Gambling, supported by the statutory levy. The charity will work with academic teams including the University of Birmingham, Bournemouth University, the University of Plymouth, Lancaster University, and Liverpool John Moores University.

The four projects sit within the Gambling Harms Research UK (GHR-UK) Evidence Centre, which coordinates 19 one-year Innovation Partnerships under the programme. UKRI has been appointed by the UK Government to oversee research commissioned through the new statutory Gambling Levy. Under the levy, 20% of annual funding will be allocated to research, equating to £22.1 million in 2025/26.

Emily Tofield, Chief Executive of Ygam, said: “We are pleased to be working in partnership with leading university partners, contributing our expertise in a key strategic area of our work. A defining strength of our approach is that it is grounded in robust insight and research, underpinning everything we do. This enables us to understand how and why harms emerge and translate that into practical, preventative education that is credible and scalable. We look forward to achieving these outcomes together and informing effective measures to prevent harms among children and young people.”

Ygam said its advisory panels — including young people, individuals with lived experience, community and faith leaders, gaming and esports representatives, and student ambassadors — will help shape the research to reflect “real-world experience and diverse community perspectives.”

The four partnerships are: INTEGRATE (University of Birmingham, Ygam, Al-Hurraya and Community Connexions), focused on intersectional gambling harm and interventions for children, young people and emerging adults; “From Evidence to Action: Safeguarding Neurodivergent Young People in Gamified Digital Environments” (Bournemouth University, Ygam, Work’n’Diversity CIC), focused on gambling-like risks in gamified digital environments; GRASP (University of Plymouth-led partnership including NatCen, NHS and third-sector organisations, and Ygam), mapping support pathways and gaps in prevention and recovery; and GRACE-Net (Lancaster University and Liverpool John Moores University with local authorities, NHS partners, third-sector organisations and Ygam), testing collaborative approaches in the North West of England and sharing learning more widely.

The post Ygam joins four UKRI-funded gambling harms research partnerships appeared first on EE Gaming | Global iGaming & Tech Intelligence Hub.

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