BetMGM Q3 2026 Business Update - Events Platform - Q4 - MGM RESORTS INTERNATIONAL

Explicit Guidance:

• Reaffirmed full-year 2026 Net Revenue guidance: $2.9 billion to $3.1 billion.
• Reaffirmed full-year 2026 Adjusted EBITDA guidance: $300 million to $350 million, with a forward view toward the lower end of the range.
• Long-term profitability outlook: Path to $500 million in Adjusted EBITDA anticipated for sometime beyond 2027.

Business-Segment Outlook:

• iGaming (70% of total): Focus on differentiated content and premium player value; expecting continued rollout of "Game of Thrones" franchise titles and progressive side bet jackpot features across all gaming markets by year-end 2026.
• Online Sports Betting (OSB): Expect competitive pressures from regulated and unregulated operators to persist at least through mid-2027; maintaining strategy of "value over volume" with reduced marketing investment in OSB-only markets while increasing focus on multi-product states.
• Retail/Omni-channel: Nevada retail sportsbook handle grew 8% in Q3; anticipated to continue driving new customer acquisition for online platforms.
• New Markets: Alberta launch showing attractive ROIs and per-player metrics trending better than post-Ontario launch; expecting growth trajectory to mimic or exceed Ontario's historic ramp-up.
• Borgata Brand: Successful relaunch in New Jersey and Pennsylvania; 28% increase in average daily active users (vs. February 2026 benchmark) expected to continue.

Market and Competitive Outlook:

• Competitive Environment: Highly intense operating environment driven by significant investments from unregulated/illegal operators and prediction markets; expects market share in sports and iGaming to remain solid (approx. 8% and 20%, respectively) despite reduced marketing spend.
• Pricing & Margins: Anticipate margin upticks due to favorable bet mix shifts (increased parlays/Superchargers/SGPs) and high-margin product introductions (jackpot features) later in 2026.
• Acquisition Costs: Customer acquisition costs (CPAs) have meaningfully reduced since the latter stages of the World Cup, with payback periods improving to levels not seen since early 2026; expects this efficiency to drive future profitability.
• Prediction Markets: Expects a progressive reduction in the addressable TAM for prediction markets as state courts (9th and 6th Circuits) and potentially the Supreme Court restrict their operations in 2026/2027.

Macro / Industry Outlook:

• Regulatory Landscape: Anticipates Supreme Court clarification on prediction market risks within the 2026-2027 legislative session, expecting outcomes favorable to states/tribes which would eventually force casino-like products to reemerge in a different form.
• Operational Environment: Acknowledges that while promo intensity remains elevated due to competition, the "balance between marketing and promo" is expected to ease over time as the business shifts focus to retained players over new acquisitions.

Strategic Initiatives:

• Geographic Focus: Shifting investment toward multi-product states, Nevada, and Alberta while reducing investment in lower-return OSB-only markets.
• Product Launches: Continued expansion of "Game of Thrones" exclusive content and "Traits" side bet; rolling out live-streamed slots (via Awager) and sports-branded casino games (e.g., Minnesota Vikings partnership) throughout 2026.
• Technology & UX: Planned improvements to app speed, stability, responsiveness, and navigation/discovery engines in the very near term.
• Capacity: No specific Capex expansion mentioned; strategy focuses on optimizing existing channel mix and capital allocation rather than physical capacity additions.

Risks and Headwinds to Outlook:

• Regulatory Uncertainty: Persistence of prediction market ambiguity and potential legal challenges from CFTC/Social gambling regulations.
• Competition: Intense spending by unregulated operators and prediction markets; potential for margin compression if promo intensity cannot be lowered significantly.
• Market Dynamics: Potential slowdown in new customer acquisition in mature states; reliance on high-value player retention rather than volume growth.
• Cost Pressures: Tension between payment flexibility and cost control; rising taxes and sports data fees may limit operating leverage.
• Seasonality: Calendar variances (e.g., World Cup timing) can impact Q3/Q4 comparisons.

Management Tone on the Future:

• Confidence: High confidence in meeting FY2026 guidance ("on track") and delivering sustainable, profitable growth.
• Strategic Certainty: Clear pivot to efficiency and unit economics; management views the reduced marketing spend and improved acquisition efficiency as a deliberate, successful execution of strategy rather than under-investment.
• Hedges: Explicitly hedges the EBITDA guidance toward the lower end of the range; cautions that competitive dynamics and regulatory rulings (prediction markets) remain persistent headwinds.

Miscellaneous:

• Capital Return: Continuing to pay parent fees to Entain and MGM Resorts (calculated as % of revenue) and cash distributions; $18M in fees and $50M in distributions paid in Q3 (Total $68M).
• Player Metrics: OSB handle grew 3% in Q3; Handle per active up 13%; NGR per active up 18%; Active players down 9% (intentional volume reduction).
• Cross-sell: 55-60% of sports players also play iGaming; 15-20% of iGaming players also use OSB.