BetMGM made $86 million without a prediction market. Its CEO expects the Supreme Court to rule against them.
The quarter in numbers
The headline figures come from the company's own unaudited release. The year-earlier column is the comparison BetMGM gave, not our reconstruction.
| Metric | Q3 2026 | Q3 2025 | Change |
|---|---|---|---|
| Net revenue | $710m | $667m | +7% |
| iGaming net revenue | $483m | $454m | +6% |
| Online sports net revenue | $216m | $202m | +7% |
| Online sports handle | $3.24bn | $3.16bn | +3% |
| Gross hold on sports | 10.7% | 10.1% | +55 bps |
| Net hold on sports | 6.7% | 6.4% | +30 bps |
| Contribution | $175m | $133m | +32% |
| Adjusted EBITDA | $86m | $41m | +112% |
| Average monthly actives | 878,000 | 902,000 | -3% |
| Fees paid to MGM and Entain | $18m | nil | new |
Two things in that table do not usually move together. Revenue rose while the customer base shrank, and handle grew 3 percent while net revenue from sports grew 7 percent. The gap is hold: BetMGM kept 10.7 cents of every dollar wagered before promotions, up from 10.1, and 6.7 cents after them. The company attributes the better hold to "enhanced products," which in practice means more parlay and same-game parlay volume from the World Cup and the start of the football season, and to spending less on the players who were only ever there for the promotions. Its phrase for the 3 percent decline in actives is "refined player acquisition and management."
The result is a business sending cash upstairs: $18 million of parent fees in the quarter plus $50 million of excess cash distributed to MGM and Entain. Entain's shares rose about 4 percent on the day; it reports on 15 October and MGM Resorts on 28 October.
What Greenblatt said about the Supreme Court
The prediction market question came up because BetMGM is the obvious control group. FanDuel, DraftKings and Fanatics all now offer sports event contracts in states where they do not hold a sportsbook licence. BetMGM has said it will not, and Greenblatt has spent the year describing the newcomers as a cost line rather than a product opportunity. In April he said higher acquisition costs were "largely driven by new sports betting companies buying media in the category," adding, "They call themselves prediction markets." In July he called them the primary macro factor on the business. On 29 September MGM Resorts chief executive Bill Hornbuckle told the G2E conference that prediction markets "are hurting the industry, full stop."
On 13 October Greenblatt went further and gave a legal forecast. He said the key test for the Supreme Court is "whether this was the intent of Congress," and "I think that that will be shown to not be the case." He noted that most decisions so far have gone to states, attorneys general and tribes, and said he expects the same from the high court, ideally within the current term. The justices have not yet decided whether to take the case. New Jersey's petition in docket 26-299 was filed on 2 September; Kalshi's response, originally due 8 October, has been extended to 9 November. Between 22 September and 9 October eleven amicus briefs were filed, including Ohio's on behalf of 39 states and the District of Columbia, the NFL's, 145 tribes', and the American Gaming Association's. If the Court grants review in December or January, a decision by June 2027 is realistic; if it does not, the circuit split stands.
"Cosmetics in pursuit of survival"
The sharper comment was about the CFTC. On 9 October the Commission published an interim final rule that excludes bets placed with licensed casinos and sportsbooks from the statutory definition of a swap, and a separate proposal to write event contracts into it. The large prediction markets have said they do not plan to list traditional slots or table games, and the rule is widely read as drawing the line there. Asked whether that removed the casino-style threat to BetMGM's iGaming business, which is 68 percent of its revenue, Greenblatt said: "I don't think it's no longer a risk." He described the platforms' retreat from casino-like products as "cosmetics in pursuit of survival," and made two further points: that a rule can be changed by a later Commission, and that a product withdrawn to win a court case can come back in another form once the case is won.
He also expects more states to enforce their own laws against sports contracts whatever the federal rule says, and said that would shrink the platforms' addressable customer base. That is already visible in two of BetMGM's larger markets. In Nevada, the Ninth Circuit held on 28 August that the state can apply its gambling laws to Kalshi's sports contracts, and BetMGM's Nevada online handle rose 8 percent in the quarter; Greenblatt said the benefit is hard to isolate because of how customers register across state lines, but that he expects BetMGM to gain. In Michigan, Kalshi has been under a preliminary injunction since 1 September, Robinhood agreed on 9 September to stop offering sports contracts, and Coinbase agreed on 7 October to stop by 10 October and close open positions. BetMGM holds a licence in both states.
What the guidance implies for the fourth quarter
BetMGM reiterated full-year net revenue of $2.9 billion to $3.1 billion and adjusted EBITDA of $300 million to $350 million, and said it is tracking toward the lower end of both. The guidance has been cut twice this year, in April and July, and the $500 million EBITDA target once set for 2027 is now described as achievable "in the coming years."
| Measure | Nine months 2026 | Full-year guidance (low end) | Implied Q4 | Q4 2025 actual |
|---|---|---|---|---|
| Net revenue | $2,116m | $2,900m | $784m | $780m |
| Adjusted EBITDA | $185m | $300m | $115m | about $71m, implied by the 62% gap iGaming Express reports |
The arithmetic is ours and it is simple subtraction. To reach even the bottom of the revenue range BetMGM needs a fourth quarter roughly flat on last year's $780 million, which is plausible given the quarter just reported. To reach the bottom of the EBITDA range it needs about $115 million in a single quarter, which would be its best quarter on record by a wide margin and a third higher than the $86 million it just posted. That is why the company says "lower end" rather than "midpoint," and why Greenblatt spent the call talking about discipline rather than growth. Nine-month actives are down 5 percent; the plan is to make more from each remaining player, not to find new ones at today's acquisition prices.
Why this quarter matters beyond BetMGM
BetMGM is a 50-50 venture of MGM Resorts and Entain, and the only one of the four largest US online operators without an event contract product. Its numbers show what a sportsbook looks like when it concedes the prediction market customer rather than chasing them: smaller, more profitable, more dependent on iGaming, and more exposed to the legal outcome than a rival that has hedged by listing contracts of its own. DraftKings and Flutter sold off in early October on a reported Kalshi valuation; Entain rose on this release. One set of investors is pricing the chance that prediction markets take the sports customer, the other the chance that a court takes the product away.
Greenblatt's closing line was, "almost regardless of what happens in the external environment, we will find a way." The external environment has three dates on it: Kalshi's Supreme Court response on 9 November, the end of the CFTC's comment windows on the two 9 October rules, and whatever the justices do with the petition after that.
Method and limits
Financial figures are from BetMGM's 13 October release, which presents net revenue, contribution and adjusted EBITDA as non-GAAP measures, includes a gross presentation of certain Nevada operations, and describes all numbers as unaudited estimates. Quotations from the earnings call are as reported by Covers, which covered the call live; we did not listen to the call ourselves and we have not seen a transcript. The April, July and September quotations are as reported by iGaming Express. The implied fourth-quarter figures are our subtraction of nine-month actuals from the low end of guidance; BetMGM has not published a fourth-quarter forecast. Market share figures (14 percent of GGR in active markets, 20 percent in iGaming, 8 percent in online sports) are the company's own. Supreme Court docket entries are from the Court's public docket for 26-299. Nothing here is investment, legal or betting advice.
Frequently asked questions
What did BetMGM report for Q3 2026?
Net revenue of $710 million, up 7 percent on the year, with iGaming at $483 million and online sports at $216 million. Adjusted EBITDA more than doubled to $86 million. Sports handle rose 3 percent to $3.24 billion while average monthly active players fell 3 percent to 878,000. Full-year guidance of $2.9 billion to $3.1 billion of revenue and $300 million to $350 million of adjusted EBITDA was kept, with results expected near the lower end of both.
What did Adam Greenblatt say about prediction markets?
On the 13 October call he said he expects the Supreme Court to rule against prediction markets because the key test is whether Congress intended sports and casino-like contracts, which he thinks will be shown not to be the case. He called the operators' moves to drop casino-style products "cosmetics in pursuit of survival" and said their acquisition spending is a "distortion" BetMGM has to work around.
Does BetMGM offer a prediction market?
No. It is one of the largest US online sportsbooks without a sports event contract product. FanDuel, DraftKings and Fanatics all offer event contracts in some states where they do not run a licensed sportsbook; BetMGM has said it will not.
When will the Supreme Court decide the Kalshi case?
Nothing is scheduled. New Jersey's petition in docket 26-299 was filed on 2 September, Kalshi's response is due 9 November after an extension, and amicus briefs from 39 states and the District of Columbia, the NFL and the American Gaming Association were filed on 7 and 8 October. If the Court grants review in December or January, a decision could come by the end of the term in June 2027.
Related
- Is Kalshi legal in Nevada? The August 12 geofence, explained
- Is Kalshi legal in Michigan? The August 12 deadline that decides it
- Is Kalshi legal in your state? The 50-state tracker
- DraftKings and Flutter sold off on a Kalshi valuation
- Odds converter: American, decimal, fractional and implied probability
Sources
- BetMGM via PR Newswire, BetMGM Q3 2026 business update, 13 October 2026.
- Covers, BetMGM CEO expects Supreme Court to side against prediction markets, 13 October 2026.
- Covers, BetMGM's enhanced products and World Cup engagement deliver 7 percent revenue growth in Q3, 13 October 2026.
- iGaming Express, BetMGM Q3 2026: fewer players, double the profit, 13 October 2026.
- Supreme Court of the United States, Docket No. 26-299, Flaherty v. KalshiEX, LLC, retrieved 13 October 2026.
- CFTC, Release 9309-26, interim final rule excluding certain activity from the definition of swap, 9 October 2026.
- Michigan Gaming Control Board, Coinbase agrees to halt sports-related event contracts in Michigan, 7 October 2026.
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