In the booming US online casino and sports betting industries, BetMGM is aiming for a long-term market share of 20% to 25%. The operator is well on its way to achieving that goal, according to recent data.

The operator, which is a 50/50 joint venture between MGM Resorts International (NYSE:MGM) and Entain Plc (OTC:GMVHY), is holding an investor day today and has data to back up its claims about online gaming’s rapid growth.

According to a statement, BetMGM is the number one market leader in iGaming in the United States, with a market share of 23% for the three months ended February 2021, and is on course to reach the number two spot in US sports betting and iGaming overall.

The company adds that the “long-term” total addressable market for internet casinos and sports wagering in the United States and Canada would grow to $32 billion without defining a time frame. That is on the more conservative end of the predictions made by some on Wall Street. But it’s still well ahead of the $2.4 billion the segments combine for today.

According to the company, “BetMGM expects to achieve $1 billion of net revenue from operations in 2022.” 

BetMGM’s update extends a run of positive data for companies with online casino exposure. As analysts and investors fawn over the growing legalization of sports betting, this segment has taken a backseat.

In comparison to online sports wagering, gaming operators have recently indicated that internet gaming provides greater margins and long-term growth prospects. MGM doesn’t shy away from that outlook, with CEO Bill Hornbuckle declaring earlier this month that “iGaming is the secret to this business,” and that it will eventually represent two-thirds of net income in the space.

If BetMGM’s $32 billion estimate is correct and the operator can gain a 25% share, the total will be $8 billion, with $4 billion flowing to the Las Vegas-based company.

In a standard operating environment, that would account for a significant percentage of the gaming company’s revenue. MGM generated $12.90 billion in revenue in 2019, with $6.52 billion attributed to casinos, prior to the coronavirus pandemic.

Online Paying Dividends

Should BetMGM prove successful in taking the number two spot among online sportsbooks, that would mean toppling rival DraftKings (NASDAQ:DKNG).  The company, along with FanDuel, controls over 60% of the US internet sports betting market, with BetMGM ranking third.

Some investors are already betting that the casino operator will be able to use its brand recognition from its land-based businesses to achieve online success.

Furthermore, the BetMGM unit’s impressive growth raises another issue: Will MGM revisit acquisition overtures toward Entain?

The British bookmaker declined a $11.06 billion offer from the Bellagio operator earlier this year, deeming it too low.

There was speculation at the time that MGM would increase its bid or revise it to include more cash. However, the suitor ultimately walked away. Some analysts claim that as BetMGM expands, the deal talk will pop up again in the future.