BetMGM Just Had Its Worst Q1 in Years — And It’s Blaming Prediction Markets

BetMGM had a rough start to 2026, and the company is not being quiet about who it blames. On April 14, the sports betting operator reported first-quarter net revenue of $696 million — up 6 percent year over year — but the headline number masked a meaningful miss versus analyst expectations and forced the company to cut its full-year guidance. CEO Adam Greenblatt spent a significant portion of the earnings call doing something unusual: calling out prediction markets by name and accusing them of deliberately targeting sports bettors.

The Numbers Behind the Miss

BetMGM’s Q1 results were mixed at best. iGaming drove most of the growth, with net revenue up 9 percent year over year to $481 million. Online sports betting net revenue grew a more modest 4 percent to $203 million, on a handle of $4.2 billion. Adjusted EBITDA reached $25 million, up 11 percent from Q1 2025, but that came in well below analyst expectations of around $34 million. Total net revenue of $696 million compared to analyst consensus estimates of roughly $767 million — a meaningful gap that sent the company cutting its annual outlook.

BetMGM now projects $2.9 billion to $3.1 billion in full-year 2026 net revenue, down from a prior range of $3.1 billion to $3.2 billion. Adjusted EBITDA guidance was maintained at $300 million to $350 million, but management said results are expected to land toward the lower end of that range. Perhaps the most striking figure: average monthly active users declined 9 percent year over year to approximately 597,000, with online sports monthly active users down 16 percent.

Greenblatt Names Kalshi

Greenblatt did not bury the competitive threat in boilerplate language. He addressed it directly, saying the most significant change in the operating environment for online sports betting in Q1 was a surge in customer acquisition costs driven by prediction market platforms buying media in the same channels traditional sportsbooks rely on.

“This jump is largely driven by new sports betting companies buying media in the category,” Greenblatt said. “They call themselves prediction markets, and they are buying sports betting keywords as well as throwing money at any sports media property that will take it. They are targeting sports bettors directly in their marketing, thereby bidding up the cost of acquiring new OSB players and extending payback periods. Some of these companies even have ‘sportsbook mode’ in their product in an attempt to offer as close an experience as possible to sports betting.”

The practical effect was real. BetMGM’s cost per acquisition for online sports betting customers rose materially during the quarter, compressing margins and contributing to the guidance reduction. CFO Gary Deutsch acknowledged that player counts declined but argued that player values were higher, with handle per active user up 23 percent year over year and net gaming revenue per active in online sports up 25 percent. The lower-value recreational bettors were leaving; the higher-value players remained.

The Kalshi Comparison That Stings

One data point circulating in industry coverage puts BetMGM’s position in uncomfortable context. Kalshi’s Q1 sports contract fee revenue was estimated at approximately $305 million — which, if counted alongside traditional sportsbook figures, would put BetMGM’s $203 million in online sports betting revenue below Kalshi on a same-quarter comparison. The framing is contested: prediction market fee structures are not equivalent to sportsbook net revenue. But the directional point is real. A platform that did not exist as a sports betting product five years ago is now generating comparable revenue to one of the top-five US sportsbooks.

BetMGM is also the largest US sportsbook operator that does not offer a prediction market product of its own. FanDuel, DraftKings, and Fanatics have all launched prediction market offerings. Greenblatt has been explicit about why BetMGM has not followed: launching sports event contracts could jeopardize the company’s brick-and-mortar gaming licenses in Nevada and other states that view such offerings as regulatory violations. That is a real constraint. But the competitive consequences are showing up in the numbers.

What This Means for Sports Bettors

BetMGM’s Q1 results are a window into a broader shift in the sports betting landscape. The companies that were not supposed to be competition — Kalshi, Polymarket, and similar platforms — are now spending aggressively in the same media channels as your sportsbook, driving up the cost of new customer promotions and stretching out the payback period for welcome bonuses. When sportsbooks pay more to acquire you, they eventually either spend less on promos or reduce the value of what they offer to keep you.

The regulatory picture remains fluid. Ohio has issued a $5 million fine to Kalshi. Nevada courts have temporarily shut the platform down in that state. Massachusetts has sued. BetMGM’s management described prediction markets as a short-term disruption with unsustainable unit economics, and Greenblatt compared their ecosystem to a “hardcore grinder poker” environment where recreational players eventually leave. He may be right. But for now, the disruption is measurable — and if you’ve noticed that your sportsbook’s promos seem less generous this year than they were two years ago, this is part of why.

The sports betting industry is going through a genuine reshaping. BetMGM’s earnings call made that undeniable. How the regulatory fights over prediction markets resolve in the courts and in Congress will determine whether this is a temporary dislocation or a permanent change in the competitive landscape. Either way, bettors should pay attention — because the incentives being offered to keep your action depend on how expensive it is to compete for it.