The BetMGM Bull Case: Why the iGaming and Online Sports Betting Boom is Just Getting Started

The U.S. iGaming and online sports betting market is entering a golden era. With regulatory expansion, shifting consumer habits, and technological innovation converging, the sector is primed for explosive growth. At the forefront of this transformation is BetMGM, which recently upgraded its FY2025 guidance, signaling confidence in its ability to capture a significant share of this expanding pie. For investors, the question isn't whether the market will grow—it's whether BetMGM can sustain its podium position in a fiercely competitive landscape.

A Guidance Upgrade That Speaks Volumes

BetMGM's FY2025 guidance upgrade—from $2.6 billion to $2.7 billion in net revenue and from $100 million to $150 million in EBITDA—reflects more than just a Q2 win. It's a validation of the company's strategic execution and a glimpse into the sector's long-term potential. The 36% year-over-year revenue growth in Q2 and the 35% increase in 1H 2025 underscore BetMGM's ability to scale profitably. Notably, its EBITDA margin expansion—from a $123 million loss in 1H 2024 to $109 million in 1H 2025—demonstrates operational discipline in a capital-intensive industry.

The upgrade isn't just a function of top-line growth. BetMGM's iGaming and Online Sports segments are diverging in performance. While iGaming grew 29% YoY to $449 million, the Online Sports segment surged 56% to $228 million. This divergence highlights a critical trend: the online sports betting market is outpacing iGaming in growth, driven by live betting, in-game wagers, and a younger demographic increasingly comfortable with digital platforms.

The Power of the Joint Venture Playbook

BetMGM's 50/50 joint venture with Entain (owner of bwin, PokerStars, and other global gaming brands) and MGM Resorts isn't just a structural detail—it's a strategic moat. By combining Entain's cutting-edge technology with MGM's iconic brand portfolio and physical footprint, BetMGM has created a hybrid model that few competitors can replicate.

Consider the omnichannel integration: BetMGM's Nevada digital wallet, which allows users to move seamlessly between online and retail experiences, has driven a 30% increase in monthly actives in the first half of 2025. This flywheel effect—where digital engagement drives in-person visits and vice versa—is a powerful differentiator. Moreover, the partnership with Marriott Bonvoy, which grants access to 170 million loyalty members, provides a low-cost customer acquisition channel that rivals like DraftKings or FanDuel lack.

The joint venture also mitigates risk. Both Entain and MGM have committed $1.1 billion in cumulative investment since 2018, ensuring BetMGM has the capital to scale rapidly. With no further capital injections expected from parents, the upgraded EBITDA guidance suggests the venture is nearing self-sufficiency—a critical milestone for long-term sustainability.

Sector Tailwinds: Regulatory, Demographic, and Technological

The U.S. online sports betting market is projected to grow from $17.94 billion in 2024 to $33.18 billion by 2030, with the online segment expanding at a 12.8% CAGR. This growth is fueled by three key drivers:

1. Regulatory Expansion: With 20+ states and Canadian provinces expected to legalize online betting by 2025, the TAM is expanding rapidly. BetMGM's “launch playbook”—proven success in states like Colorado and Michigan—positions it to capture market share in new jurisdictions efficiently.
2. Demographic Shifts: Younger bettors, who prioritize mobile-first experiences and social betting, are driving demand for dynamic, gamified platforms. BetMGM's focus on “premium mass” players—those who spend more per session but aren't high-rollers—aligns with this trend.
3. Technological Innovation: AI-driven personalization, live betting enhancements, and cross-platform integration (e.g., second-screen experiences during ESPN broadcasts) are redefining user engagement. BetMGM's exclusive content library, including live dealer games and proprietary titles, ensures it stays ahead of the curve.

The Investment Case: A $500M EBITDA Path

BetMGM's long-term ambition of reaching $500 million in EBITDA by the mid-2030s is no longer a pipe dream. The company's 14% GGR market share (22% in iGaming, 8% in online sports) and upgraded 2025 guidance provide a clear trajectory. With EBITDA margins targeting 30–35% in the long term, the business model is shifting from a high-growth, low-margin story to a scalable, cash-generative asset.

For investors, the key risks include regulatory headwinds and competition from entrenched players like FanDuel and DraftKings. However, BetMGM's joint venture structure, omnichannel strategy, and financial discipline mitigate these concerns. The company's undrawn $150 million credit facility and strong cash flow generation suggest it's well-positioned to weather short-term volatility.

Final Verdict: Position for the Next Phase

The U.S. online gaming market is entering its inflection point. BetMGM's guidance upgrade isn't just a Q2 win—it's a signal that the company is adapting to the sector's evolving dynamics. With a 14% GGR market share, a clear path to $500 million in EBITDA, and a joint venture that combines the best of both worlds, BetMGM offers a compelling long-term investment opportunity.

For those seeking exposure to the next phase of digital betting expansion, BetMGM's stock—valued at a discount to its peers given its mixed performance history—presents an attractive entry point. The sector's growth is inevitable; the question is whether BetMGM can maintain its podium position. Based on its 2025 guidance and strategic advantages, the answer seems increasingly yes.