The numbers say one thing. The guidance says another. And the share prices? Well, they don’t seem to care.
Welcome to the curious state of the US sports betting sector, a market bursting with optimism, but one where the data doesn’t quite stack up.
At the heart of this contradiction is BetMGM, the joint venture between Entain PLC (LSE:ENT) and MGM Resorts.
According to a recent research note from Shore Capital, BetMGM delivered a standout first quarter, with net gaming revenue up 34% to 657 million dollars, far outpacing DraftKings (up 20%) and FanDuel (up 18%).
Its sportsbook revenue surged 67% despite unfavourable sporting results, helped by higher margin bets like same game parlays and more disciplined marketing.
And yet, while its two larger rivals are forecasting accelerating growth through the rest of the year, DraftKings and FanDuel (owned by the UK's Flutter Entertainment PLC (LSE:FLTR)) guiding to 36% and 31% net revenue growth respectively, BetMGM is pencilling in a marked deceleration to just 10%.
This is where things get knotty. For DraftKings and FanDuel to hit their numbers, Shore Capital calculates they will need to increase revenues at a faster rate in the second to fourth quarters than they did in the first.
BetMGM, by contrast, is effectively assuming the opposite, a sharp slowdown, despite building momentum and a strong iGaming base.
The report questions whether all three can possibly be right, arguing there is “upside risk” to BetMGM’s full-year numbers if current momentum holds.
For investors, this dissonance is more than a quirk of earnings season. It speaks to a deeper question about the maturity of the US market, the sustainability of customer acquisition strategies, and how much faith investors can put in management guidance, especially in a sector known for promotional churn and regulatory fog.
Entain’s 50% stake in BetMGM remains undervalued, the note argues, with the joint venture barely priced into the group’s market capitalisation.
Assigning just 2.5 times forecast net revenue, a discount to DraftKings’ own 3 times multiple, implies BetMGM alone could be worth 350 pence per Entain share (current price 757p).
With Entain trading on 13 times FY26 earnings and under 7 times EBITDA, there is room for re-rating, provided BetMGM’s outperformance proves more than a one-quarter anomaly.
The investment case, then, hinges on which forecast is most credible. BetMGM’s cautious tone may reflect internal conservatism or a desire to overdeliver.
But if DraftKings and FanDuel are overstretching, market expectations could need trimming.
In the meantime, investors are left with a puzzle: trust the early numbers or the cautious guidance? When three players tell different stories about the same market, only one can be right.