BetMGM Chief Executive Officer Adam Greenblatt noted the challenge that prediction markets are presenting during the company’s Q1 2026 earnings call on Tuesday.
BetMGM announced softer results with net revenue of $696M for Q1, which was up 6.6% YoY, and adjusted EBITDA of $25 million (+11% YoY) during a time of “hyperspend” by prediction markets including Kalshi and Polymarket.
Greenblatt noted that the results “were slightly below expectations due to a combination of player-friendly sports results and marketplace conditions, including intensifying competitive dynamics.”
Specifically, Greenblatt said that BetMGM’s customer acquisition costs increased significantly due to prediction markets, which continue to challenge traditional online sports betting (OSB) operators.
“This jump is largely driven by new sports betting companies buying media in the category,” Greenblatt said. “They call themselves prediction markets, and they are buying sports betting keywords, as well as throwing money at any sports media property that will take it.”
He added, “They are targeting sports bettors directly in their marketing, thereby bidding up the cost of acquiring new OSB players and extending payback periods. Some of these companies even have sportsbook mode in their product in an attempt to offer as close an experience as possible to sports betting.”
BetMGM Sees Higher Player Values in Q1
BetMGM’s average monthly active users (AMAs) declined 9% year over year to 597,000 in Q1, but handle per active user increased 23%.
“We have higher player values, higher handle per active than we (expected coming) into the year,” BetMGM CFO Gary Deutsch said. “The player counts have been lower, and the overall net impact is up, but it’s balancing those multiple metrics together.
“When we talk about things like handle, the whole has a factor on how the handle spins up. So, we dial up and look at all those metrics. But overall, the theme is we continue to see higher-than-expected player values.”
Greenblatt added, “BetMGM’s sports business has relatively more higher-staking, higher-value bettors. While this does result in somewhat more volatility in our whole percentage, the affinity of these players to BetMGM is an advantage for us, as they tend to be more resilient compared to a highly recreational customer base.”
Customer Battle With Prediction Markets Expected to Continue
During yesterday’s call, Greenblatt was asked if prediction markets were successfully encroaching on higher-value bettors.
“We’re actually seeing the more premium parts of our database incredibly resilient,” he said. “In fact, those are, of the whole, if you imagine a pyramid of players, the higher up you get, the better performing year on year is and our players have performed.
“So, actually, I think the impact of our strategy is proving to be correct or appropriate or resilient in these more turbulent times.”
Greenblatt also reiterated the company’s stance on standing firm against prediction markets.
“We stand with 40 AGs, our OSB regulators, regulated states, and tribal partners,” he said. “We look forward to an expedient outcome of the almost inevitable hearing of the pro-states’ rights, pro-tribal rights, and anti-prediction markets case by SCOTUS.
“In the meantime, we are refining our approach to OSB marketing for the rest of the year under the assumption that current media conditions persist.”
