BetMGM confirms 83 layoffs as industry wrestles with thinning margins

BetMGM is joining a number of other companies to face uncertainty about the future of the industry with the firm confirming it would be laying off 83 people from its headquarters office in New Jersey.

BetMGM downsizes as it expects more difficult times ahead

This comes on the tail of similar news from competitors, with Flutter Entertainment wrestling with analysts on earnings calls, and Penn Entertainment facing the sobering reality that ESPN Bet, the much-hyped sportsbook that was supposed to piggyback on ESPN’s popularity, is doing much less well than it had been hoped for.

In situations like these, downsizing often seems to be the answer, and BetMGM has engaged in that tradition. The layoffs will come into effect on May 27, according to a public notice that was filed with the New Jersey Department of Labor.

BetMGM has not commented publicly on the layoffs, other than to say that it was a difficult decision to make, but the company needed to ensure that it remains resilient in the long term, as per a statement released to Next.io by a company spokesperson.

All told, however, BetMGM has been enjoying a fairly strong performance across the board, with the layoffs being more anticipatory than mandatory at the present time.

Challenges not immediately reflected in the near-term financial outlook

Although sports gambling did slow down in December, with the American Gaming Association citing a 29% decline in revenue, BetMGM is still projected to post positive EBITDA this year, as well as secure forward positions in the iGaming vertical, another precious source of revenue for the company.

Sports betting, however, is reaching maturity quickly, not least because of the fierce competition by rival companies interested in maintaining their leadership in the sector.

DraftKings, FanDuel and BetMGM collectively hold the entire sector with relatively well-funded minnows such as Fanatics and ESPN Bet trying to pry away an ever-increasing share of the market.

The downsizing at BetMGM, however, is a sign that industry insiders are aware of the challenges of remaining competitive and that difficult decisions ought to be made when necessary.

In the meantime, MGM Resorts may also be looking to buy out BetMGM from its partner, Entain, as the European gaming major is facing struggles of its own.

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