BetMGM turns profitable as MGM shares gain on record results
Joint venture delivered $2.8B in FY2025 revenue with $220M EBITDA, targeting $500M profit by 2027
BetMGM, the online sports betting and gaming joint venture between MGM Resorts International and Entain, swung to profitability in fiscal year 2025, delivering record revenue of $2.8 billion that represents a 33% increase from the previous year and sends $135 million in cash distributions to MGM's balance sheet.
The 50-50 partnership achieved positive EBITDA of $220 million, a remarkable turnaround that improved earnings by $464 million year-over-year. The profitability milestone triggered $270 million in fourth-quarter cash distributions to parent companies, with MGM receiving half of that total as the venture shifts from heavy investment to sustainable returns.
MGM shares rose 2% to $34.17 following the announcement, building on momentum that has seen the stock climb from a 52-week low of $25.30. Analysts maintain an average price target of $41.50, representing 21% upside from current levels, with 11 of 22 analysts rating the stock a buy or strong buy.
The strong performance was driven by growth across both core segments. iGaming revenue climbed 24% to $1.827 billion, maintaining BetMGM's position as a market leader with 21% gross gaming revenue share in active markets. Online sports betting proved even more dynamic, surging 63% to $903 million as the company expanded into 30 states including a December launch in Missouri.
"BetMGM delivered stronger than expected performance in FY 2025, marked by significant growth and an EBITDA inflection," the company stated in its business update. "A refined player engagement strategy, coupled with improved product and user experiences, fueled growth in player activity and retention."
The joint venture now projects further acceleration in fiscal 2026, with guidance calling for revenue between $3.1 billion and $3.2 billion alongside adjusted EBITDA of $300 million to $350 million. Management expressed confidence in reaching $500 million in adjusted EBITDA by fiscal 2027, signaling a pathway to substantial cash generation for both parents.
Starting in the first quarter of 2026, BetMGM will begin paying parent fees to MGM and Entain for licensing and services, having reached sustainable profitability thresholds defined in their joint venture agreement. This creates an additional recurring revenue stream beyond the 50% profit split.
The results arrive at a pivotal moment for the US sports betting and iGaming industry, which analysts project will reach $26.8 billion in total revenue during 2025, up 15% from the previous year. However, the competitive landscape remains fiercely contested, with FanDuel commanding approximately 40% of the sports betting market and DraftKings pursuing aggressive expansion including a recent exclusive partnership with ESPN.
BetMGM's 13% overall gross gaming revenue share positions it as a solid third-place competitor, though its iGaming dominance in certain markets provides strategic leverage. The company maintains a 21% share in online casino gaming across active states, while its 8% sports betting share reflects the intense competition in that segment.
For MGM Resorts, the BetMGM turnaround provides a critical growth engine as the company navigates a broader hospitality portfolio that includes flagship Las Vegas properties and international operations in Macau. The joint venture's profitability arrives as MGM faces modest headwinds in its core casino business, with quarterly earnings growth declining 70% year-over-year despite stable revenue trends.
The company is scheduled to release its own fourth-quarter and full-year 2025 earnings on February 11, where analysts will scrutinize how the BetMGM success story translates to MGM's consolidated financial performance. With the online business now generating meaningful cash and targeting $500 million in annual EBITDA within two years, investors are increasingly viewing the digital venture as a transformative asset for the traditionally brick-and-mortar operator.
BetMGM's achievement of profitability places it ahead of several competitors who continue to prioritize customer acquisition over earnings. The milestone validates MGM's strategic bet on partnering with Entain, bringing European online gaming expertise to the US market, and suggests the joint venture is well-positioned to capitalize as the US sports betting and iGaming markets mature toward more rational economics.