BetMGM Pushes Back Profit Goal as Prediction Markets Gain Ground

Dr. Annelies De Vos · 2026-07-29

BetMGM, the joint venture between Entain and MGM Resorts, has revised its financial outlook for the remainder of 2026, pushing back its target of reaching $500 million in annual EBITDA. The company blames mounting competition from prediction market platforms and an increasingly crowded online gambling market for the delay. In its second-quarter and first-half 2026 business update released Tuesday, BetMGM reported continued revenue growth but acknowledged that profitability and long-term forecasts have taken a hit. Executives pointed to pressure from both regulated rivals and emerging alternatives that are reshaping the landscape. ### What's Behind the Delay? The core issue isn't a lack of demand. BetMGM's revenue is still climbing. The problem is that the cost of acquiring and retaining customers has gone up, and new types of competition are eating into margins. Prediction markets, which let users bet on everything from election outcomes to weather events, have become a significant force. These platforms operate in a regulatory gray area in many places, but they're attracting a younger, tech-savvy audience that traditional sportsbooks like BetMGM have relied on. Here's a quick look at the key factors: - **Rising customer acquisition costs**: BetMGM is spending more on marketing and promotions to stand out in a crowded market. - **Prediction market growth**: Platforms like Kalshi and Polymarket have seen massive user growth, siphoning off casual bettors. - **Regulatory uncertainty**: While some states have legalized online gambling, others are slow to act, creating a patchwork that complicates expansion. - **Increased competition**: Established players like DraftKings and FanDuel continue to dominate, while new entrants are offering niche betting options. ### The Bigger Picture BetMGM's situation isn't unique. The online gambling industry has matured faster than many expected. A few years ago, the focus was on rapid expansion and capturing market share. Now, the conversation has shifted to profitability and sustainable growth. For BetMGM, that means recalibrating expectations. The company still expects to hit $500 million in EBITDA eventually, but it's no longer confident that will happen by the end of 2026. Analysts had already been skeptical about that timeline, given the competitive pressures. The new guidance essentially confirms those doubts. ### What This Means for the Industry If a powerhouse like BetMGM is struggling to hit its profit targets, it's a sign that the online gambling market is becoming more complex. Prediction markets are a wild card because they don't fit neatly into existing regulatory frameworks. They're often classified as event contracts or financial derivatives, which means they can operate without the same licensing requirements as sportsbooks. This creates an uneven playing field. BetMGM and its peers have to comply with state-by-state gambling laws, while prediction platforms can sometimes bypass those rules by arguing they're not offering gambling. Until regulators catch up, this will likely remain a headache for traditional operators. ### Looking Ahead BetMGM is not sitting still. The company is investing in technology and partnerships to improve its platform and customer experience. It's also exploring new verticals, like live dealer games and virtual sports, to diversify its offerings. But the road to $500 million EBITDA is now longer than expected. For now, the message from BetMGM is clear: growth is still happening, but it's coming at a cost. And in a market where new competitors can appear overnight, patience is becoming a necessity. *Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always do your own research before making investment decisions.*