Entain praises above-expectation US performance as revenue hits $1.4bn in 2022

Entain has lauded the performance of its US division after reporting a 71% year-on-year (YOY) above-expectation increase in its net gaming revenue to $1.44bn during 2022.

Delivering a financial update for the full-year 2022, Entain singled out its US-facing JV business BetMGM as a shining light for the firm during the year.

Entain said it expects the US operator to be EBITDA-positive in H2 2023, with a long-term target EBITDA margin of 30%-35%.

BetMGM now holds a 29% market share in igaming and 18% in sports betting where it operates in the US. Entain said it was on track for its expected long-term market share of between 20% and 25% and that it expects BetMGM will return net gaming revenue (NGR) of between $1.8bn and $2bn in 2023.

The FTSE 100 operator championed improvements to its user experience for BetMGM, with average monthly igaming customers jumping 51% and sports betting customers up 61% in Q4 2022 compared to Q4 2021.

BetMGM is live in 24 jurisdictions, including Ohio, and will soon launch in Massachusetts, giving the firm access to roughly 48% of the US adult population.

During the final quarter of 2022, BetMGM’s share of gross gaming revenue (GGR) in the sports betting and igaming markets in which it operates was 18% and 20% excluding New York.

“Alongside our success in securing a market leadership position, we have also maintained strong financial discipline,” Entain said in a statement released with their group results.

“Supported by the significant embedded margin advantage BetMGM enjoys through its parental structure, 2022 saw us increase focus on building a sustainable and profitable business for the long term.”

Entain continued: “The prioritization of NGR over GGR, through progressively strategic bonus optimization, has seen sports NGR margins double year on year in Q4.

“More rigorous customer segmentation and player analytics, coupled with a data-led approach to marketing, enables bonusing to be effective and efficient,” it added.

Looking ahead, the business expects long-term CPA rates of approximately $250 to remain in place and that its EBITDA margin will sit between 30% and 35%.

At a group level, Entain posted a 13% year-on-year (YOY) rise in EBITDA to almost £1bn as the London-listed giant championed its geographic diversity and in-house tech as the core reasons for a stellar 2022.

Entain recorded £993.2m in EBITDA for full-year 2022 compared to £881.7m in 2021, with the group highlighting the welcome return of retail income following the lifting of Covid-19 lockdowns.

However, Entain did note that underlying online EBITDA fell 8% YOY to £828m as the firm highlighted emerging regulatory headwinds in the UK and Germany, along with strong 2021 pandemic-related comparables. Elsewhere, retail EBITDA soared 319% to £280m.

Additionally, group NGR jumped 12% YOY, or 10% in constant currency (cc), to £4.3bn in 2022 compared to £3.9bn in 2021.