BetMGM has reported its Q1 2026 financial results, confirming a difficult start to the year that fell short of analyst expectations.
The operator reported net operating revenue of $696 million, a 6% year-over-year increase, but still 14% below the consensus forecast of $810 million. Consequently, full-year revenue guidance has been lowered to a range of $2.9 billion–$3.1 billion.
EBITDA Underperformance and “Refined Strategy”
BetMGM Q1 adjusted EBITDA came in at just $25 million, representing a 68% underperformance against the $78 million forecast. Leadership attributed these numbers to customer-friendly sports outcomes during the Super Bowl and March Madness, alongside waning general consumer confidence.
However, a 9% year-over-year drop in average monthly active users (AMAs) to 597,000 raised concerns among investors. CEO Adam Greenblatt defended the attrition as part of a “refined player management strategy” intended to weed out low-value, promotion-heavy players in favor of higher-margin, premium users.
Analysts from J.P. Morgan and Jefferies noted that a 23% increase in handle per active user suggests this “move up the value chain” may be working despite the lower headcount.
iGaming Growth and Parent Fee Milestone
While sports betting faced volatility, iGaming remained a standout, growing 9% year-over-year. BetMGM also confirmed that it remains self-sustaining, having paid its first-ever “Parent Fee” of $3 million to partners MGM Resorts and Entain.
Greenblatt remains optimistic about the long-term roadmap:
“Our iGaming business is growing at scale, and our Online Sports business continues to strengthen despite a challenging market in Q1. As we look to the rest of the year, we will continue to focus on our areas of strength… These give us confidence that we will deliver on our updated 2026 guidance as well as continue on the path to $500 million of Adjusted EBITDA in 2027.”
Despite these assurances, both MGM Resorts and Entain face downward stock pressure as investors weigh the impact of higher UK taxes and potential regulatory headwinds, such as the proposed ban on online sports betting in Ohio.
