BetMGM Needs a Record Q4 to Hit 2026 Guidance After Doubling Q3 Adjusted EBITDA to $86M

BetMGM more than doubled Q3 2026 adjusted EBITDA to $86 million, but must generate at least $115 million in Q4 to meet its annual guidance, while active customer numbers continue to decline.

BetMGM needs at least $115 million of adjusted EBITDA in Q4 to meet its 2026 guidance, 34% above its highest published quarterly result, even after more than doubling third-quarter adjusted EBITDA to $86 million, according to its Q3 2026 business update released Oct. 13.

The U.S. online sports betting and iGaming joint venture owned 50/50 by MGM Resorts International and Entain reiterated 2026 guidance of $300 million to $350 million in adjusted EBITDA and $2.9 billion to $3.1 billion in net revenue, having lowered its revenue forecast in April from $3.1 billion to $3.2 billion. Management expects both measures to finish toward the lower end of those ranges.

The earnings improvement comes despite a shrinking overall customer base. Average monthly actives fell 3% year over year to 878,000, the fourth consecutive quarterly decline, although iGaming actives increased 2%.

With $185 million of adjusted EBITDA in the first nine months, BetMGM is $115 million short of the $300 million floor (see Table 1). That is 34% above $86 million, the highest quarterly figure BetMGM has published, reached in Q2 2025 and again in Q3 2026, and 62% above the $71 million it reported in Q4 2025.

Revenue must also reach at least $784 million in Q4, exceeding the $780 million reported in Q4 2025, its highest published quarterly figure.

Citizens JMP Securities forecasts that BetMGM will miss its annual EBITDA target, while Macquarie Capital highlights stronger underlying profitability without explicitly predicting whether the company will meet guidance.

Chad Beynon, senior gaming, lodging and theaters analyst at Macquarie Capital, was more upbeat about the business, calling the quarter “a solid 3Q26 update that reinforces the success of its value-over-volume strategy.” 

Macquarie did not publish its own BetMGM EBITDA forecast or explicitly predict whether the company would meet guidance.

Table 1: How BetMGM’s 2026 Results Build Toward Its Guidance Floor

Source: BetMGM quarterly business updates. Notes: Non-GAAP figures; adjusted EBITDA is before parent fees. The 9M total plus the Q4 requirement equals the guidance floor ($2,116 million + $784 million = $2,900 million of revenue; $185 million + $115 million = $300 million of adjusted EBITDA). BetMGM notes that totals may not sum due to rounding; the rounded quarters sum to $2,117 million of revenue. BetMGM labeled its profit measure “EBITDA” through FY 2025. Quarterly business updates began in 2025, with comparisons back to Q1 2024; earlier updates gave half-year and full-year figures only. Q3 2026 figures are unaudited.

BetMGM Doubles EBITDA as Sports Betting Customers Decline

Net revenue rose to $710 million from $667 million, with BetMGM reporting year-over-year growth of 7%. The result exceeded the $707 million consensus cited by Citizens by $3 million.

iGaming revenue increased 6% to $483 million, accounting for 68% of the total, while online sports betting revenue rose 7% to $216 million on handle up 3% at $3.24 billion. Sports betting revenue grew faster than wagering volume as net gaming revenue hold increased to 6.7% from 6.4%.

Adjusted EBITDA rose $45 million on $43 million of extra revenue, which Citizens calculated as 105% flow-through (the increase in EBITDA as a share of the increase in revenue), citing a 3% cut in fixed costs. 

Contribution (net revenue less cost of revenue, excluding depreciation and amortization, and marketing acquisition spend) rose 32% to $175 million.

The results are said to reflect BetMGM’s strategy of prioritizing higher-value customers over customer volume, although performance differed between its sports betting and iGaming businesses.

BetMGM attributed the fall in actives to “refined player acquisition and management.” Chief Executive Officer Adam Greenblatt said on the Oct. 13 call that the lower count was “entirely as expected” and that BetMGM has concentrated marketing on iGaming, multi-product states and “higher-value, higher-staking players.” 

While overall monthly actives declined, iGaming actives rose 2%, suggesting that the reduction was concentrated elsewhere in the business. Beynon wrote that sports actives fell 9%.

Sports handle per active rose 13% and sports net gaming revenue per active rose 18%, BetMGM said.

BetMGM is therefore generating more wagering activity and revenue per active sports customer, helping offset the decline in player numbers. The figures do not, however, establish whether that strategy can sustain revenue growth over the longer term.

Q4 Guidance Requires Higher Margins or Further Cost Savings

BetMGM said it expects profitability to accelerate in Q4, but its business update did not quantify the contribution required from higher revenue, lower costs or improved margins.

Contribution was $175 million in Q3 against adjusted EBITDA of $86 million, a difference of approximately $89 million.

If that difference remained unchanged in Q4, BetMGM would need approximately $204 million in contribution to deliver $115 million in adjusted EBITDA, a 17% increase from Q3.

At the minimum $784 million of revenue needed to reach annual guidance, that scenario would imply a contribution margin of approximately 26%, compared with 24.6% in Q3.

Maintaining Q3’s contribution margin on $784 million of revenue would instead produce approximately $193 million in contribution and $104 million in adjusted EBITDA, assuming the same $89 million difference. That would leave BetMGM about $11 million short of its quarterly EBITDA requirement.

These are illustrative calculations based on an unchanged difference between contribution and adjusted EBITDA, not company forecasts. Changes in operating costs, revenue or other factors could materially alter the outcome.

The broker notes identify several potential sources of improvement.

Macquarie said management described customer acquisition returns as the most attractive in several quarters and pointed to lower acquisition costs, payment processing improvements and operating leverage.

Promotions, elevated by Alberta, competitor launches and start-of-season spending, are expected to moderate gradually. A growing mix of parlays and same-game parlays has also supported sports betting margins.

Management said trends “remained healthy through Sept and continued into Oct,” according to Macquarie.

Citizens’ forecasts suggest those improvements may still fall short of what is needed. Its $261 million full-year EBITDA estimate implies approximately $76 million in Q4, $39 million below the amount required to meet BetMGM’s guidance floor.

Citizens described the quarter as “stronger than feared, alleviating some concerns around game outcomes at the start of the NFL season.”

Entain’s company-compiled consensus for BetMGM, dated July 17, put 2026 adjusted EBITDA at $304 million, although that forecast predates the latest quarterly results.

Prediction Market Competition Delays $500 Million EBITDA Target Beyond 2027

The company previously targeted FY 2027 for the milestone, but said in July that it would take longer, citing the market environment, including “prediction market regulatory complexity.” It now says it remains confident of reaching $500 million “in the coming years.”

On the Q2 call, Greenblatt named prediction markets as the “primary” reason for lower revenue expectations. 

On the Q3 call, he said competition remains intense because of spending by “unregulated and illegal operators” and expects that pressure to last at least until mid-2027.

The company has not quantified how much prediction market competition has contributed to the decline in overall monthly actives or the delay to its $500 million EBITDA ambition.

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