BetMGM Increases Customer Acquisition Spending

Company's 2024 Losses are Bigger Than Anticipated

BetMGM increases customer acquisition spending.
2024 losses expected higher than forecast.
BetMGM stock closed up 2.3%.

July 31, 20240 143 2 minutes readGambling News

BetMGM Increases Customer Acquisition Spending — BetMGM

BetMGM Puts Positive Spin on Report

BetMGM announced on Monday that its expected losses for 2024 are going to be larger than previously expected. The primary reason for the bigger loss is BetMGM increases customer acquisition spending to match the tough competition in the U.S.

The company is referring to this season as an investment year, which essentially means they’re going to lose money. BetMGM announced a core loss of $123 for the first half of the year and expects the second half will look about the same. That’s a great deal more than the anticipated $93 million loss for the entire year.

Despite the news,

BetMGM stock closed up 2.3% on Monday. The other company involved in the BetMGM joint venture with MGM, Entertainment, saw its stock drop to their lowest levels since COVID lockdowns in April 2020.

For the management at BetMGM, it wasn’t a hard decision to make. When

BetMGM increases customer acquisition spending, it’s to ensure future earnings. BetMGM may be No. 3 in the U.S. in net revenue, however, the sportsbook has a long way to go to catch up to FanDuel or DraftKings.

The sportsbook may have a great app, a popular BetMGM promo code, and solid lines, but it needs customers. Preferably new customers, who like to wager on sports and dabble in casino gaming. The betting trends show gamblers who bet on sports are more likely to partake in iGaming. Those are the types of bettors the sportsbook are targeting.

BetMGM Puts Positive Spin on Report

Expected losses were more than twice as much as was forecast, but BetMGM was putting a positive spin on the decision to spend more money on new players.

“The first half of this year has been very important in laying the groundwork for BetMGM’s future,” said BetMGM CEO Adam Greenblatt. “2024 is a year of investment, focusing on improving our customer experience and stepping up our level of investment in players.

We are encouraged to see this strategy delivering accelerating momentum. We have exceeded our goals for both acquisition and retention, which should lead to higher year-over-year revenue growth for the second half of this year into 2025.”

Greenblatt said the iGaming portion of the company was doing well and is a focus for the company moving forward.

“To maximize this strength and momentum, we plan to deploy additional marketing in the back half of this year. Our execution roadmap, building momentum and prospects ahead all support our confidence in BetMGM’s strong future,” he said.

It isn’t unusual to see things like BetMGM increases customer acquisition spending. It’s something all sportsbooks do in one form or another. Letting sports bettors wager on their expert picks isn’t enough to ensure long-term success. That takes a constant influx of new bettors and that’s what BetMGM is trying to accomplish.

Not all investors are happy with this approach, but the fact BetMGM stock actually showed a slight increase is good news for the sportsbook. It shows that some people understand the long-term aim of the company and its desire to be relevant in future years.

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