BetMGM has lowered its expectations for the remainder of 2026 and postponed its timeline for reaching $500 million in annual EBITDA, citing mounting competitive pressure from prediction market platforms and a more crowded online gambling landscape.

The joint venture between Entain and MGM Resorts released its second-quarter and first-half 2026 business update on Tuesday, reporting continued growth in revenue while acknowledging challenges that have affected profitability and long-term forecasts. Company executives said competition from both regulated and emerging alternatives has become a significant factor in the U.S. online betting market.

BetMGM now expects full-year revenue and adjusted EBITDA to land toward the lower end of its previously announced guidance ranges. The operator projects 2026 net revenue between $2.8 billion and $3.1 billion, while adjusted EBITDA is expected to fall within a range of $300 million to $350 million.

The company also said it no longer anticipates reaching its previously stated goal of $500 million in annual EBITDA by 2027. Executives attributed the revised timeline partly to increased competition from prediction markets and the regulatory questions surrounding the sector.

Prediction Markets Become a Growing Concern

BetMGM leadership identified prediction markets as one of the most significant forces affecting the online sports betting industry.

Licensed sportsbook operators across the United States have faced increasing pressure from platforms such as Kalshi, while major gambling brands including FanDuel, DraftKings and Fanatics have introduced related offerings. The growing presence of these products has contributed to higher customer acquisition costs and intensified competition for bettors.

BetMGM CEO Adam Greenblatt described prediction markets as the primary factor behind the company’s lower revenue expectations.

“It’s tough out there,” he said, according to Reuters. “But I think, certainly on the OSB side, the primary macro impacts are prediction markets. And then, of course, it doesn’t help that gas prices are where they are and consumer discretionary income, but trying to parse out those effects is very, very challenging. I think prediction markets is the primary.”

Greenblatt also pointed to broader competitive pressures within online gaming and sports betting. According to the company, the arrival of additional operators has increased the cost of attracting customers by roughly 15% compared with a year ago.

“As new entrants join the market and, certainly in established markets, their ability to compete and make impact is very challenging,” Greenblatt said. “It’s challenged. And so what we’re seeing is some of the new entrants investing in growth, investing in players in, frankly, less commercially rational ways in order to establish a beachhead. And it’s in that context that actually, we’re delighted with the resilience of our business, the resilience of our player base and the continued momentum of our business notwithstanding.”

Online Casino Expansion Remains a Key Opportunity

While sports betting competition continues to increase, BetMGM remains focused on growing its online casino business, which accounts for roughly 70% of company revenue.

During its conference call, management identified three jurisdictions that could become important targets for online casino legislation in 2027: Indiana, Virginia and Washington, D.C.

“The top three states remain Virginia, where we made some good progress last year and are hopeful to see legislation in 2027. In D.C., we’re also hoping to see some legislation in ’27,” Greenblatt said.

“The other state in which we are turning our attention to as an industry is Indiana, where we’ve seen some changes to the political landscape, which should be conducive to the passage of iGaming. With all of these three states there come risks. But in the fullness of time, we very much expect to see an expanding tab.”

Greenblatt acknowledged that online casino legalization remains difficult because each jurisdiction presents different political and economic considerations.

“The reality is every state is different. Every state has its own specific political landscape, headwinds, tailwinds, fiscal needs, and pressures,” said Greenblatt.

Recent legislative efforts illustrate those challenges. Virginia lawmakers failed to reconcile competing online casino proposals before the end of the state’s legislative session. In Washington, D.C., lawmakers have discussed the Internet Gaming and Consumer Protection Act, which would authorize online casinos while prohibiting sweepstakes operators using dual-currency systems. Indiana lawmakers considered online casino legislation in 2025, though concerns regarding impacts on land-based casinos contributed to the proposal’s failure.

Revenue Growth Continues Despite Profitability Pressures

BetMGM generated $711 million in revenue during the second quarter, representing a 3% increase from the same period in 2025.

The company’s online casino segment remained its strongest contributor. Net iGaming revenue reached $483 million during the quarter, up 8% year-over-year. Online sports betting revenue totaled $228 million, matching the figure reported a year earlier.

Adjusted EBITDA for the quarter declined to $74 million from $86 million in Q2 2025. First-half revenue rose to $1.4 billion from $1.3 billion in the prior-year period, while adjusted EBITDA slipped from $109 million to $99 million.

“Q2 was another quarter of focused execution by BetMGM. Although the quarter came in a little lighter than expected, we continued to deliver against our north star of profitability,” said Greenblatt.

BetMGM accepted $3.5 billion in wagers during the second quarter, compared with $3.4 billion a year earlier. Average monthly active users fell to 875,000 from 901,000. For the first six months of 2026, handle reached $7.7 billion, up 3% year-over-year, while average monthly actives declined to 925,000 from 984,000.

“We saw handle growth despite the challenging market environment, driven by strong engagement around the tentpole events like the World Cup and NBA Playoffs,” Greenblatt said.

The World Cup proved particularly significant for BetMGM. Greenblatt reported that wagering volume on the tournament was three times higher than during the 2022 event, with betting activity on the United States versus Belgium match exceeding that of any MLB or NBA playoff game on the platform.

“I’m so pleased, really so pleased with how this World Cup has played out,” Greenblatt said. “What we saw was a massive increase in fandom, and as you know for our category that is foundational. That is the core driver to ongoing engagement and betting activity, and obviously over time, handle growth. What we’ve seen and what we hoped for in anticipation of the World Cup was really the emergence of a new sport, of a new sport that could over time rival the big three in the US.”

When discussing soccer’s position among American sports, Greenblatt added: “I think soccer’s ahead now. I think as we look to the future, soccer is a real sports category and growing, and I think that as a feeder to our sector, that’s tremendously exciting.”

Retail Segment Faces Difficult Quarter

BetMGM’s retail sports betting operations experienced a notably weaker quarter than its online business.

“Retail had a tough quarter,” added Greenblatt. “Large stake bets were won by players on our own property sportsbooks.”

As a result, the company reported no retail revenue during the second quarter, compared with $16 million in Q2 2025. First-half retail revenue declined to $12 million from $36 million a year earlier.

BetMGM also highlighted developments beyond the United States. Following its July 13 launch in Alberta, nearly 10% of new customers reportedly had an existing relationship with MGM Resorts. The company sees potential benefits from the market, though any upside has not been incorporated into current guidance.

Meanwhile, executives said they are pursuing additional growth opportunities in Nevada, where online handle increased 10% during the first half of the year. Management believes the local Nevada customer segment remains an area with further potential for expansion as the company continues refining its strategy in a more competitive environment.