Challenges mount
BetMGM is to lay off 83 staff in New Jersey just a month after news emerged Fanatics Sports is seriously threatening its US market position.
the downturn has hit BetMGM hard, stated an analyst
Fanatics’ rapid growth looks on pace to see it overtake BetMGM as the US’ third biggest sportsbook. While the former sports apparel-brand is soaring despite an industry-wide slowdown in sports betting handle growth over the fourth quarter, the downturn has hit BetMGM hard, stated an analyst.
Cue a public notice BetMGM filed with the New Jersey Department of Labor last week that the 83 layoffs will go into effect May 27.
According to media reports, representatives of the sportsbook co-owned by MGM Resorts International and Entain did not respond to a request for comment on Monday.
Historic disadvantage?
Gambling reporter Corey Sharp gave a reason for BetMGM’s struggles, claiming it is not able to compete with FanDuel or DraftKings for sports betting market share “in the way it has for online casinos.”
Sharp stated the years of FanDuel and DraftKings building up a daily fantasy sports fanbase gave their pivot into sports betting an early advantage. BetMGM, however, moved into the market via its online casino.
transfers more naturally to online casino than to sports betting.”
Sharp stated this impacts BetMGM because it is “relying mostly on MGM Resorts’ retail customer database, which transfers more naturally to online casino than to sports betting.”
The casino disadvantage and job cuts underline the challenge BetMGM is facing as sports merchandising giant Fanatics’ organic pivot to sports betting has seen it capture a 6.7% market share in January.
According to JMP Securities, this means Fanatics is breathing down BetMGM’s neck “by just 80 basis points.”
Battle for third
While DraftKings made ground on industry leader FanDuel in January, the market lead of the two historic DFS brands appears unassailable, Fanatics overtaking BetMGM would be a major shake up to the status quo.
Results in January have already seen Penn Entainment reassuring investors they could opt out of the ESPN Bet deal in 2026. CEO Glenn Snowden stated last week ESPN Bet has failed to meet market expectations over the past 1.5 years.