BetMGM CEO Says Customer Acquisition Costs Have Soared Due to Prediction Markets

(AsiaGameHub) –   On Tuesday, BetMGM CEO Adam Greenblatt highlighted the difficulties posed by prediction markets during the firm’s Q1 2026 earnings call.

The company reported net revenue of $696 million for the first quarter, a 6.6% year-over-year increase, alongside an adjusted EBITDA of $25 million, which rose 11% YoY. These results came during a period of intense spending by prediction market operators such as Kalshi and Polymarket.

Greenblatt stated that the quarterly performance “fell slightly short of expectations because of a mix of player-favorable sports outcomes and market conditions, which include heightened competitive pressures.”

He specifically pointed out that BetMGM’s customer acquisition costs saw a substantial rise due to the activities of prediction markets, which are increasingly putting pressure on conventional online sports betting (OSB) providers.

“This surge is primarily fueled by new companies in the sports betting space purchasing media within the category,” Greenblatt explained. “They identify as prediction markets and are acquiring sports betting keywords, in addition to spending heavily on any available sports media outlet.”

He continued, “Their marketing directly targets sports bettors, which drives up the expense of attracting new OSB customers and lengthens the time to recoup those costs. Several of these firms even incorporate a sportsbook feature in their product to mimic the sports betting experience as closely as possible.”

BetMGM Sees Higher Player Values in Q1

In the first quarter, BetMGM’s average monthly active users (AMAs) decreased by 9% compared to the previous year, settling at 597,000. However, the handle per active user grew by 23%.

“We are observing higher player values and a greater handle per active user than we had anticipated for the year,” commented BetMGM CFO Gary Deutsch. “The number of players has been lower, yet the overall net effect is positive, as we balance these various metrics.

“Factors like the overall handle influence how the handle accumulates. Therefore, we adjust and evaluate all these indicators collectively. The key takeaway is that we are consistently seeing player values exceed our projections.”

Greenblatt added, “BetMGM’s sports segment attracts a larger proportion of bettors who place higher stakes and are of greater value. Although this leads to slightly more volatility in our hold percentage, the loyalty of these customers is a strength for us, as they are generally more steadfast than a predominantly recreational user base.”

Customer Battle With Prediction Markets Expected to Continue

During the call, Greenblatt was questioned on whether prediction markets are making successful inroads with BetMGM’s high-value bettors.

“We are finding the more premium segments of our customer base to be remarkably stable,” he responded. “In the overall pyramid of players, the performance improves as you move towards the top, and our players have performed well year on year.

“Consequently, I believe our strategic approach is demonstrating its effectiveness and suitability during these more unpredictable market conditions.”

Greenblatt also reaffirmed the company’s position of holding its ground against prediction markets.

“We align with 40 state attorneys general, our OSB regulators, regulated states, and tribal partners,” he stated. “We anticipate a swift resolution from the likely Supreme Court hearing on the case that supports states’ rights, tribal rights, and opposes prediction markets.

“For the remainder of the year, we are adjusting our OSB marketing strategy based on the expectation that the current media environment will continue.”