Prediction markets are no longer a minor irritation for US sportsbooks. BetMGM has pushed its $500 million adjusted EBITDA target beyond 2027, pointing to regulatory uncertainty around prediction markets and tougher competition for sports customers.
The operator is still profitable. Its total net revenue increased 3% year over year to $711 million in the second quarter of 2026, helped by continued growth from online casino games. The sportsbook side looked less convincing, with online sports revenue flat despite a busy sporting calendar.
What Has BetMGM Changed?
BetMGM said in February that it expected to reach $500 million in adjusted EBITDA during 2027. It repeated that target after its first-quarter results in April.
That timetable has now been dropped.
BetMGM still believes it can reach $500 million “in the coming years,” but said the target would take longer than previously expected because of the market environment and “prediction market regulatory complexity.”
The operator also expects its full-year results to land towards the lower end of its existing guidance:
- Net revenue: $2.9 billion to $3.1 billion
- Adjusted EBITDA: $300 million to $350 million
The ranges haven’t been cut again, but BetMGM is warning investors not to expect the top end.
BetMGM’s Second Quarter by Numbers
| Metric | Q2 2026 | Year-on-Year Change |
|---|---|---|
| Total net revenue | $711m | +3% |
| Online casino revenue | $483m | +8% |
| Online sports revenue | $228m | Flat |
| Online sports handle | $3.49bn | +2% |
| Adjusted EBITDA | $74m | -15% |
| Average monthly active users | 875,000 | -3% |
BetMGM took more in sports wagers and improved its gross hold from 9.8% to 10.3%. Even so, net sports revenue remained stuck at $228 million.
The company said major events such as the NBA playoffs and the start of the 2026 World Cup supported betting volume. That was offset by greater “player generosity,” which normally covers promotional spending, rewards, bonuses, and other reductions from gross gaming revenue.
Online casino remains the stronger part of the business. Revenue from iGaming rose 8% to $483 million, more than twice the amount generated by online sports betting.
Why Prediction Markets Matter to Sportsbooks
Platforms such as Kalshi list sports event contracts through a federally regulated derivatives framework rather than the state-by-state licensing system used by conventional sportsbooks.
That distinction gives prediction markets a route into areas where regular online sports betting may be restricted. It has also produced court cases and disagreements between federal authorities, state gambling regulators, and tribal gaming groups.
The Commodity Futures Trading Commission opened a new rulemaking process in June 2026 after noting the growing number and variety of event contracts, specifically naming contracts linked to sporting events. The proposal includes a framework for deciding whether certain contracts amount to gaming or conflict with the public interest.
For BetMGM, the problem isn’t only that customers have another place to trade sports outcomes. Prediction markets also compete for:
- Search traffic and advertising space
- New customer deposits
- Sports media partnerships
- Promotional attention
- High-value and frequent sports customers
Reuters reported that the rise of prediction-market products is increasing customer acquisition costs and putting pressure on sportsbook market share. DraftKings, FanDuel, and Fanatics have responded by entering the prediction-market sector themselves, while BetMGM has so far remained focused on its existing sportsbook and casino businesses.
What Does This Mean for Bettors?
More competition should give customers more places to compare prices and products. It may also encourage operators to offer better promotions when fighting for new accounts.
The catch is that BetMGM appears less interested in chasing every customer at any cost. Average monthly active users fell 3% in the second quarter, while the company continued to describe its acquisition strategy as disciplined and focused on higher-value customers.
That could mean fewer blanket giveaways and more targeted offers based on how often someone bets, what they wager on, and their expected value to the operator.
Prediction markets also need to be compared differently from sportsbooks. The contract price isn’t the only number that matters. Trading fees, spreads, available liquidity, settlement rules, and the ability to exit a position can all affect the final return. The CFTC advises customers to review contract-specific rules and understand how fees affect returns before trading.
Betfinder Take
BetMGM isn’t in financial trouble. It generated $99 million in adjusted EBITDA during the first half of 2026 and remains on course for another profitable year.
The more telling point is that prediction markets have moved beyond industry speculation. They’re now affecting the earnings timetable of one of America’s largest gambling operators.
Online casino growth gives BetMGM some protection, but its sportsbook is facing a more expensive fight for customers. Bettors may benefit from that competition in the short term. Whether it produces lasting value or simply more complicated ways to bet remains less certain.
