MGM Digital Q3 revenue up 6% as EBITDAR loss shrinks to $4m

MGM Digital, the online gaming arm of MGM Resorts that consists of LeoVegas and other consolidated subsidiaries, posted third-quarter revenue of $183.7 million, up 6% from $174.0 million a year earlier. Its segment adjusted EBITDAR loss narrowed to $4.2 million from $23.2 million, according to MGM Resorts' results release of 28 October. MGM Digital does not include BetMGM North America, which MGM reports separately.

The numbers

Segment adjusted EBITDAR is the measure MGM uses for segment performance. It is measured before interest, tax, depreciation, amortisation, triple net lease rent expense and certain other items, so a smaller EBITDAR loss is not the same as a smaller net loss. By our calculation, nine-month revenue rose about 21% (20.8%), well ahead of the 6% in the third quarter alone.

What MGM said on the call

On the earnings call, according to a transcript published by The Motley Fool, chief executive Bill Hornbuckle said the BetMGM brand "continues to drive 8% top line growth in the B2C channels", with gains in Spain, the Netherlands and the UK. That 8% refers to the B2C channels, not to MGM Digital as a whole, which grew 6%.

Chief financial officer Jonathan Halkyard said MGM Digital turned roughly $10 million of extra revenue into a $19 million improvement in EBITDAR. On the UK, he said: "In August, we launched online sports betting in The UK on our proprietary platform, which now drives over 80% of our online sports revenue." In the results release, Hornbuckle said MGM's digital businesses, "including our BetMGM North America Venture and MGM Digital", "reported strong topline growth during the third quarter".

Our reading

The headline improvement is in the loss line: about $19 million better than a year ago on revenue that grew around $10 million. Growth, though, was slower in the third quarter than across the first nine months. For players at LeoVegas-group brands, the results say nothing about bonuses, terms or product changes, and in its release and on the call (per the Motley Fool transcript), MGM did not link them to the deposit-limit rules in Spain or the Netherlands or to UK tax changes. MGM bought LeoVegas in 2022.

BetMGM's North American results are covered in BetMGM's Q3 net revenue. For the markets MGM named, see Spain's €700-a-day joint deposit limit, the KSA's 2025 Dutch market scan and the UK Budget's gambling duties. For another UK-heavy operator, see Entain's Q3 update.