BetMGM's Accelerating Growth and Revised EBITDA Trajectory: A Strategic Buy Opportunity in the US iGaming Sector

The U.S. iGaming and online sports betting sector is undergoing a seismic shift, driven by regulatory tailwinds, a surge in digital adoption, and a maturing market structure. At the forefront of this transformation is BetMGM, a joint venture between Entain (owner of the Borgata brand) and MGM Resorts International. With its recently upgraded FY2025 guidance and a clear path to margin expansion, the company is emerging as a high-conviction investment in a sector poised for exponential growth.

Market Context: A $31.14 Billion Opportunity by 2030

The U.S. online gambling market is expanding at a compound annual growth rate (CAGR) of 12.2%, with total revenue projected to reach $31.14 billion by 2030. This growth is fueled by the legalization of sports betting in over 30 states post-2018's PASPA repeal and the anticipated entry of 20+ U.S. states and Canadian provinces into online betting by 2025. BetMGM's 14% gross gaming revenue (GGR) market share in active markets positions it as a podium player in a race where scale and operational efficiency are critical.

Strong Q2 2025 Results and Upgraded Guidance: A Recipe for Conviction

BetMGM's second-quarter 2025 results underscore its ability to execute amid a competitive landscape. The company reported $228 million in Online Sports Net Revenue, a 56% YoY increase, and $449 million in iGaming Net Revenue, up 29% YoY. These figures translated to a $86 million EBITDA in Q2 and $109 million in 1H 2025 EBITDA, far exceeding initial expectations.

The upgraded FY2025 guidance now targets $2.7 billion in Net Revenue and $150 million in EBITDA, up from previous estimates of $2.6 billion in Net Revenue and $100 million in EBITDA. This revision reflects not just top-line momentum but also disciplined cost management. For instance, NGR (Net Gaming Revenue) per active player surged 70% YoY in 1H 2025, signaling improved player value and engagement.

Handle Growth and Strategic Execution: The Twin Engines of Margin Expansion

The company's Online Sports handle grew 27% YoY to $7.515 billion in 1H 2025, a critical metric for long-term profitability. Higher handle directly correlates with increased Net Gaming Revenue (NGR), as operators earn a percentage of wagers. BetMGM's ability to attract and retain high-value players—through refined targeting, enhanced CRM, and a “premium mass” strategy—has amplified this effect.

Moreover, the company's Contribution (Net Revenue minus cost of revenue and marketing spend) improved from negative $38 million in 1Q 2024 to $116 million in 1Q 2025, demonstrating superior operating leverage. This is a direct result of the joint venture's cost structure: shared infrastructure with Entain and MGM, AI-driven personalization, and a focus on cross-sell engagement.

Joint Venture Synergies: A Competitive Moat

BetMGM's 50/50 partnership with Entain and MGM is a strategic differentiator. Entain's global gaming expertise and technology stack provide a robust foundation for product innovation, while MGM's brand equity and retail presence in states like New Jersey and Pennsylvania drive customer acquisition. The integration of BetMGM's digital wallet with MGM's physical casinos has further blurred the lines between online and offline, creating a seamless omnichannel experience.

Long-Term Outlook: $500 Million EBITDA in Sight

BetMGM's long-term ambition of achieving $500 million in EBITDA by the mid-2030s is now more attainable than ever. The company's 14% GGR market share, combined with a 12.2% CAGR in the U.S. online gambling market, creates a clear runway for growth. Additionally, its $150 million undrawn revolving credit facility ensures flexibility to invest in new markets or enhance player retention.

Investment Thesis: A Strategic Buy

Given the sector's expansion and BetMGM's operational execution, the stock offers a compelling entry point. Key catalysts include:
1. Regulatory Expansion: 20+ states expected to legalize online betting by 2025, expanding BetMGM's TAM.
2. Margin Resilience: Improved NGR per active player and contribution margins suggest EBITDA can scale faster than revenue.
3. Joint Venture Stability: Entain and MGM's shared risk and resources provide a durable competitive advantage.

While the stock is currently trading at a premium to peers, the upgraded guidance and long-term EBITDA trajectory justify the valuation. Investors with a 3–5 year horizon should consider initiating positions in this high-growth, high-conviction name.

Conclusion

BetMGM's upgraded guidance, driven by handle growth, disciplined execution, and joint venture synergies, positions it as a clear beneficiary of the U.S. iGaming boom. With a clear path to $500 million in EBITDA and a market cap that underprices its long-term potential, the company represents a strategic buy opportunity for investors seeking exposure to a secular growth story. In a sector where first-movers are rewarded, BetMGM is not just keeping pace—it's setting the pace.