MGM Resorts and Entain: Betting Big on a Digital Future

The convergence of traditional hospitality and digital entertainment is reshaping the leisure industry, and MGM Resorts International (NYSE: MGM) stands at the forefront with its strategic partnership with Entain plc (LON: ENT). The revised financial outlook for their joint venture, BetMGM, has not only driven a 6% surge in MGM's stock but also underscored the viability of integrated resort models in a post-pandemic economy. Here's why this partnership matters—and what it means for investors.

The Catalyst: BetMGM's Financial Turnaround

BetMGM's FY 2025 guidance upgrade is the clearest sign yet of its transition from a speculative venture to a profit-driven engine. The joint venture now expects $2.6 billion in net revenue and $100 million in EBITDA, up from earlier projections. This marks a 34% year-over-year revenue growth in Q1 2025, fueled by explosive expansion in online sports betting (+68% YoY) and iGaming (+27% YoY).

The surge in MGM's stock on June 16, 2025, reflects investor recognition of BetMGM's operational maturity. The company's “contribution-positive” sports betting segment—once a drag on margins—now complements its iGaming division, creating a self-reinforcing revenue stream. For MGM, this is more than a side hustle: BetMGM's success validates the hybrid model of combining physical casinos with digital platforms, a blueprint for post-pandemic growth.

Regulatory Tailwinds and Market Expansion

The U.S. sports betting landscape is expanding rapidly, and MGM is positioned to capitalize. Missouri's upcoming December 2025 launch of online sports betting—its 31st state—will add 21 licenses, including partnerships with DraftKings and FanDuel. This expansion aligns with BetMGM's strategy to dominate states with high population density and established gaming infrastructure.

Meanwhile, federal and state regulations are evolving to address emerging risks like AI-driven betting and underage participation. The SAFE Bet Act, which targets college athlete prop bets and AI transparency, could standardize rules and reduce legal uncertainty—a net positive for established players like BetMGM.

The Synergy Advantage

The MGM-Entain partnership exemplifies the power of cross-industry collaboration. Entain brings cutting-edge technology and global expertise in regulated markets, while MGM leverages its U.S. footprint and brand equity. This synergy is evident in Q1 2025 results: Entain's revenue grew 9% YoY, with BetMGM accounting for 3% of that growth. Without BetMGM, Entain's growth would have been just 6%—proof of the joint venture's strategic value.

The integration also mitigates risks. BetMGM's non-GAAP metrics (net revenue, EBITDA) are intentionally conservative, ensuring operational flexibility. This discipline aligns with MGM's broader focus on cost management, a critical factor as the hospitality sector faces rising labor and capital costs.

Investment Implications

For investors, MGM represents a rare dual-play opportunity: exposure to both the recovering hospitality sector and the high-growth iGaming market. The stock's 6% surge in June 2025 is a preview of what's to come. Key catalysts to watch include:
1. Q2 2025 results (due July 29): Will BetMGM's momentum hold?
2. Missouri's market launch: A test of BetMGM's ability to scale in new states.
3. Federal legislation: Passage of the SAFE Bet Act could solidify regulatory clarity.

Actionable Takeaways:
- Buy MGM: For investors comfortable with volatility, a position in MGM offers exposure to two rising tides—casino recovery and digital gaming.
- Sector ETFs: Consider IGaming ETFs (IGAM) or iShares U.S. Gaming (ETFG) for diversified exposure.
- Risk Management: Monitor regulatory headwinds in states like California and Texas, where legalization faces persistent hurdles.

Conclusion

The MGM-Entain partnership is more than a financial win—it's a model for the future of leisure. By blending physical resorts with digital platforms, MGM is proving that the integrated resort model isn't just surviving—it's thriving. As states continue to legalize sports betting and iGaming, BetMGM's success will serve as a barometer for the entire industry. For investors, this is a story of resilience, innovation, and strategic foresight—and one worth betting on.