Cannibalisation “totally overstated”, says BetMGM CEO Greenblatt

BetMGM CEO Adam Greenblatt addresses the ongoing concerns regarding online gambling’s potential impact on the retail casino sector, asserting that fears of cannibalization are mostly exaggerated. In his analysis, he delves into BetMGM’s strategic product evolution while casting a critical eye on unlicensed gaming alternatives, such as sweepstakes and prediction markets.

### The Online vs. Retail Casino Debate

The gambling industry in the United States has witnessed extensive discourse surrounding the influence of iGaming on the physical casino market. Greenblatt emphasizes that studies often provide conflicting insights about whether online gaming detracts from retail performance. Current operators in the iGaming sector continue to debate online casinos’ effects on their brick-and-mortar counterparts.

For instance, during discussions in Maryland, industry representatives such as Cordish Companies highlighted concerns that online gambling could negatively affect state tax revenues and employment within physical casinos. In contrast, John Pappas from the iDevelopment and Economic Association pointed to Pennsylvania’s revenue reports, which indicated no adverse effects from iGaming.

### BetMGM: A Model for Omnichannel Success

BetMGM, a joint venture between Entain and MGM Resorts, has been at the forefront of an omnichannel approach, integrating online and retail platforms effectively. The company claims to be the first to introduce a seamless betting wallet in Nevada ahead of the NFL season in 2023, allowing users to enjoy a seamless experience across digital and physical spaces.

In MGM Resorts’ 2024 earnings call, CEO Bill Hornbuckle reported an impressive 60% increase in first-time depositors acquired in Nevada, demonstrating that thoughtful cross-selling and product integration can drive significant growth.

Greenblatt articulates a clear stance on the cannibalization fears, stating, “The concerns around retail to digital cannibalization are overstated by the incumbents in the retail sector.” He explains that while the pandemic did complicate attendance patterns at physical casinos, the overarching trends show consistency rather than a decline, with iGaming expanding tax bases in states that feature both retail and online options.

### Addressing Cannibalization Fears

Greenblatt points out that the industry should focus on driving synergy between retail and online gambling to build a sustainable future. MGM Resorts, as emphasized by Hornbuckle, is actively bridging the gap between these two segments, fostering a fresh wave of innovation in the gambling experience.

Hornbuckle likens this evolution to previous shifts in the dining and retail sectors, emphasizing an entertainment revolution within gambling. BetMGM has bolstered this transition by promoting rewards programs that allow for credits and perks across both gaming channels, enriching the player experience and merging digital engagement with in-person attendance.

### Building Connections in a Growing Market

Adam Greenblatt, who has an extensive background in the gaming industry from his tenure at Ladbrokes Coral to leading BetMGM, moved to the United States during a pivotal moment. Following the Supreme Court’s decision to eliminate PASPA in 2018, the U.S. market became ripe for growth, allowing European gaming firms to enter and create robust operational teams in key locations.

His peer, Yaniv Sherman from 888 Holdings, notes the unique challenges faced by Greenblatt in his role, as he navigated dual ownership while building a formidable presence in U.S. iGaming.

### Embracing the Future of U.S. Gaming

As the operator focuses on its existing player base and improving retention rates, Greenblatt mentions that BetMGM is transitioning out of an acquisition-focused strategy towards enhancing the value offered to current clients. In recent performance metrics, BetMGM reported a 55% increase in monthly users in Q4, signaling positive growth amid competitive pressures.

Despite the need for growth in a maturing market, BetMGM is optimistic about its trajectory. Greenblatt expresses confidence in the firm’s comprehensive plan to boost player value while concurrently managing operational costs to target a positive EBITDA of $240 million by 2025. This involves strategic layoffs aimed at enhancing efficiency—a move also echoed by MGM Resorts, which has implemented measures to adjust pricing strategies across their venues.

### A Commitment to Regulated Gaming

Greenblatt perceives BetMGM as an educator for regulators, advocating for a clear understanding of the iGaming model and the impact of blanket taxation on regulated entities. As unlicensed operators continue to challenge the landscape, with some states taking action against unregulated sweepstakes, the conversation will likely shift towards enforcing stricter licensing norms.

Looking ahead, while new igaming states may not emerge imminently, Greenblatt remains hopeful about the future landscape of regulated gaming. He perceives a growing momentum toward regulation that respects state-level decisions concerning gaming, setting a foundation for BetMGM’s continued advocacy for a healthy industry.

In summary, BetMGM is strategically navigating the complexities of the U.S. gambling landscape, focusing on innovation, player retention, and regulatory advocacy while debunking the persistent myths around cannibalization. The company’s concentrated efforts aim to create a harmonious integration of retail and online gaming, fostering a sustainable and profitable future for both sectors.