In the US, BetMGM is in partnership with Entain and MGM Resorts International, and it has a sports betting and iGaming platform. But it seems that things are not going as well as expected, as BetMGM plans to lay off a total of 83 workers from its headquarters in New Jersey.

BetMGM, one of the foremost players in the sports betting and iGaming industry, has announced the termination of 83 workers at its corporate headquarters in New Jersey. The job cuts are part of the company's efforts to reduce operational costs and streamline its business as it navigates a competitive and evolving market.

Layoffs at BetMGM headquarters

The layoffs were disclosed through a Worker Adjustment and Retraining Notification (WARN) Notice filed with the New Jersey Department of Labor & Workforce Development. Under federal and state regulations, businesses with 100 or more workers must provide advance notice of mass layoffs or office closures to allow the workers time to seek alternative employment. BetMGM's notice indicates that the job terminations will take effect by the 27th of May, 2025.

BetMGM is a joint venture between Entain and MGM Resorts International, established to capitalize on the expanding online gaming and sports betting markets in North America. The company operates both online and retail sportsbooks, but recent market shifts and intensified competition have necessitated cost-cutting measures, including workforce reductions at its headquarters.

Competitive pressures and market challenges

Since the US Supreme Court's landmark 2018 decision allowing states to legalize sports betting, companies like BetMGM have aggressively pursued market share. However, despite significant investments, the industry's landscape has become increasingly dominated by DraftKings and FanDuel, both of which had an early advantage due to their pre-existing fantasy sports operations. Many fantasy sports enthusiasts transitioned to wagering on sports, allowing DraftKings and FanDuel to establish a strong foothold.

According to industry reports, as of February 2024, BetMGM controlled approximately 8% of the legal sports betting market in the US, based on total handle (the amount of money wagered by bettors). By comparison, FanDuel holds a commanding 37% share, followed closely by DraftKings at 35.5%. Caesars Sportsbook and ESPN Bet round out the top five with 5% and just over 3%, respectively.

While FanDuel and DraftKings successfully converted daily fantasy sports players into sportsbook customers, BetMGM's strategy relied on leveraging its existing customer base from MGM Resorts' land-based casinos. However, not all casino guests are interested in sports betting, making it difficult for BetMGM to scale its sportsbook operations as effectively as its top competitors.

iGaming opportunities and limitations

BetMGM has had more success in iGaming, which includes online slots and interactive table games. However, iGaming remains legal in only seven US states, and BetMGM is currently active in just four of them. With no immediate expansion of iGaming on the horizon, the company faces constraints in growing this segment of its business.

But despite the workforce reduction, BetMGM has seen revenue growth. In its 2024 fiscal year, MGM Resorts reported that BetMGM generated $2.1 billion in revenue, reflecting a 13% increase from 2023. The company earned $624 million from sports betting, with nearly $70 million coming from retail operations and the remainder from online betting. iGaming, a key area of growth, contributed almost $1.5 billion in gross gaming revenue.

However, despite the revenue boost, BetMGM has yet to turn a profit. The company reported an earnings before interest, taxes, depreciation, and amortization (EBITDA) loss of approximately $244 million, largely attributed to continued investments and acquisitions, including Tipico's US sportsbook operations and LeoVegas.

But company executives remain optimistic about BetMGM's future, describing 2024 as a "year of investment and rebuilding." They project that 2025 could mark a turning point, with revenue expectations set between $2.4 billion and $2.5 billion. If achieved, this could push BetMGM's EBITDA into positive territory, with estimates suggesting potential earnings of $500 million.