BetMGM’s Q1 2026 results are out and confirm what many analysts had predicted might be a sluggish start to 2026.
Today BetMGM reported net operating revenue of $696 million (a 6% year-over-year increase), 14% below the analyst consensus forecast of $810 million. Net operating revenue in Q4 2025 was $730 million.
Adjusted EBITDA came in at just $25 million, a marginal increase of 11% year over year, but a 68% underperformance against the $78 million forecast.
In a familiar refrain of recent times, customer-friendly sports outcomes (Super Bowl and March Madness) were blamed, as was waning general consumer confidence, following a pivotal year of blistering iGaming growth.
The joint venture subsidiary of Entain (LSE: ENT) and MGM Resorts (NYSE: MGM) does not break out net income; it is reported by the parent companies. Still, BetMGM’s poor EBITDA performance is enough to indicate that net income will be well below estimates.
Full-year 2026 revenue guidance has been revised lower due to weak first-quarter performance. BetMGM has lowered guidance to $2.9 billion–$3.1 billion from $3.1 billion-$3.2 billion previously.
Active Users Drop: Is Weeding Out Low-Value Players Just Part of Plan?
A dent to profitability was evident elsewhere too, with concerns about earnings and active users. Adjusted EBITDA fell 68% to $25 million, but perhaps more concerning was the 9% year-over-year drop in average monthly active users (AMAs) to 597,000.
On the conference call, analysts were keen to establish whether that 9% attrition rate was the result of a deliberate weeding out of low-value, promotion-heavy players, or if BetMGM is losing market share to aggressive competitors.
Analysts pointed to a recent report by Sensor Tower in early April claiming that Kalshi had grabbed a 21% share of MAUs in the US sportsbook market. CEO Adam Greenblatt reiterated his long-held view that BetMGM would not “be a first mover” in a market that it still considers “illegal sports betting”.
However, when asked about the possibility of an entrance at some point, Greenblatt said his team is monitoring the potential for a Futures Commission Merchant (FCM) license should the regulatory landscape become clearer.
The management has previously highlighted its “refined player management strategy”, which seeks to improve margins by moving up the value chain in terms of its user base.
Related to that, analysts were also watching out for any disclosures on revenue per user (RPU) growth to justify the lower headcount.
In post-call comments, analysts, notably at Jefferies and J.P. Morgan, noted that while revenue was disappointing, the 23% increase in handle per active user suggests the players BetMGM has are indeed more valuable than the ones they lost. The management plan may be working.
Accordingly, the market’s “show me” period will now extend into Q2, with all eyes on whether the sports hold percentage returns to the 9-10% historical average.
EBITDA Guidance Stays at $300-350M But at Lower End of Range
Leadership is sticking by its FY 2026 adjusted EBITDA guidance of $300 million – $350 million, but lowered expectations in saying that results will likely be at the lower end of the range.
Caution emanating from broker research in the run-up to the results appears to have been well-founded. For instance, UBS lowered its price target for MGM Resorts from $40 to $39 after a softer-than-expected start to 2026.
Wells Fargo, on the other hand, had maintained its $31 target but homed in on adverse regional weather events and continued marketing spending largesse as Q1 headwinds.
Looking past the balance sheet’s top-line disappointment, iGaming remains the star of the show. Growth in the segment was 9% YoY, contrasting with the volatility that plagues the sports book business.
Despite the underwhelming revenue numbers, BetMGM confirmed it remains “self-sustaining” and for the first time paid a Parent Fee (for licensing/service fees) of $3 million to MGM Resorts and Entain.
BetMGM putting up real numbers while the rest of the sector debates survival
Q1 revenue hit $696M (+6% YoY), but the real story is iGaming growing at 9% — double the 4% clip from sports betting. EBITDA +11% shows operating leverage actually kicking in. iGaming margins… pic.twitter.com/YDUxoASghp— Casey | Trade Tracs (@CaseyVSilver) April 14, 2026
Cash for Parents Likely To Reduce From 2025’s $270M
However, the “excess cash” available for distributions in 1Q may be reduced, given the low EBITDA. Last year, BetMGM returned $270 million to MGM Resorts and Entain in a sign of its newfound profitability. This year, it might be more like ~$50-65 million.
However, if sports hold improves, there could be a distribution of cash to shareholders via buybacks later in the year. Unlike Entain, MGM Resorts does not pay a dividend. Enttain’s progressive dividend policy equates to a yield of 3.7%.
In comments accompanying the business update, Greenblatt emphasized that the “path to $500 million adjusted EBITDA in 2027” remains intact, supported by that “refined player management strategy” already mentioned, and the launch of new proprietary iGaming content.
“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, particularly in iGaming, multi‑product states, omnichannel in Nevada, and servicing our premium mass sports players.
“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.”
BetMGM Still the Growth Story for MGM Resorts and Entain
MGM Resorts and Entain shares face downward pressure today as investors digest the guidance cut and the volatility of sports betting margins highlighted in this update.
The stock prices of MGM Resorts and Entain plc have been influenced by several diverging factors in recent weeks:
MGM is currently trading at a high P/E ratio (~48.3), leading some analysts to worry about valuation, as they argue that the “profitability story” is priced in.
Meanwhile, leverage is still a worry. MGM’s high debt-to-equity ratio (including lease liabilities) is 12.91x, with total debt of $31.38 million. Having said that, BetMGM’s ability to self-fund and return cash is a significant de-risking counterbalance.
Although the debt ratio is substantial, the interest payments are manageable, with an interest coverage ratio of 3.6x. Investors should also bear in mind that the cost of aggressive share buybacks on MGM Resort’s part means less shareholder equity and a higher debt-to-equity ratio.
Also, even though BetMGM centers the growth story, MGM’s recent stock performance has also been lifted by the stronger-than-expected recovery in Macau gaming revenues.
Entain shares, which trade on the London Stock Exchange, fell sharply shortly after the earnings release, losing 6%, but have recovered to trade 0.55% higher in the session (547.2p) at the time of writing.
Tax changes are weighing on the Entain stock, with the UK’s Remote Gaming Duty increasing from 21% to 40%, hurting its core UK-focused Ladbrokes and Coral brands.
Back with BetMGM, on the upside, it recently signed a deal with Games Global in which it will exclusively debut the Gold Blitz franchise in the US. That should help the company protect its position in the high-margin iGaming sector. BetMGM’s market share is around 21%.
On the potential downside, there are regulatory headwinds. A week ago, on April 9, 2026, Ohio Republican lawmakers put forward the Save Ohio Sports Act, which would ban all online sports betting in the state. The legislation is not sure to pass, but it is a risk to the ‘Big Three’ of FanDuel, DraftKings and BetMGM.
| Period | Metric | Reported Result ($m) | Consensus Forecast ($m) | Beat / Miss (Indicator & %) |
| 2025 Q1 | Net Operating Revenue | $661 | $648 |   +2.0% |
| Adjusted EBITDA | -$1 | -$5 | +80.0% |
|
| Net Income (Loss) | -$32 | -$45 | +28.9% |
|
| 2025 Q2 | Net Operating Revenue | $695 | $682 | +1.9% |
| Adjusted EBITDA | $42 | $31 | +35.5% |
|
| Net Income | $18 | $12 | +50.0% |
|
| 2025 Q3 | Net Operating Revenue | $714 | $698 | +2.3% |
| Adjusted EBITDA | $81 | $65 | +24.6% |
|
| Net Income | $85 | $52 | +63.5% |
|
| 2025 Q4 | Net Operating Revenue | $730 | $692 | +5.5% |
| Adjusted EBITDA | $98 | $74 | +32.4% |
|
| Net Income | $60 | $76 |   -21.1% |
|
| FY 2025 | Net Operating Revenue | $2,800 | $2,720 | +2.9% |
| Adjusted EBITDA | $220 | $165 | +33.3% |
|
| Net Income | $175 | $95 | +84.2% |
|
| 2026 Q1 | Net Operating Revenue | $696 | $810 | -14.1% |
| Adjusted EBITDA | $25 | $78 | -68.0% |
|
| Net Income | [Miss]* | $42 | (Miss) |
|
| Note: The Q1 2026 Business Update summary did not release a specific consolidated Net Income figure for the JV today; this is typically disclosed in the parent companies’ full quarterly filings (MGM on 29 April). However, given the 68% shortfall in Adjusted EBITDA, a significant miss against the $42 million Net Income target is likely. | ||||
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