BetMGM ‘Optionality’ Could Be Imminent for Entain, Says Analyst

• Entain could be ready to make a decision on the fate of its 50% interest in BetMGM
• Jefferies analyst says BetMGM “standalone capability” could emerge as soon as Q2
• That would provide Entain with flexibility

The time for Entain Plc (OTC: GMVHY) to make a decision on its 50% interest in BetMGM could be drawing close. It may even arrive as soon as next quarter.

In a new report on the Coral owner, Jefferies analyst James Wheatcroft notes the gaming company’s ongoing technology transformation could set the stage for BetMGM to eventually stand on its. How that evolution takes shape isn’t clear nor is the role partner MGM Resorts International (NYSE: MGM) would play in such a scenario.

Entain’s ongoing tech transformation (focused on modularising and cloning the central platform) should create stand-alone capability for BetMGM by 2Q26E, unlocking strategic optionality,” observes Wheatcroft.

He reiterated a “buy” rating on shares of Entain with a price target implying upside of 82% from where the stock settled on March 18.

What BetMGM ‘Optionality’ Could Look Like for Entain

It’s an admittedly speculative exercise and it should be noted that Wheatcroft did not go down this road in his report, but as it relates to BetMGM, optionality for Entain has long been viewed by investors as divesting the 50% stake.

Some Entain activist investors have previously pushed for cash-raising asset sales and for those still involved with the stock, they’d likely be delighted by the company monetizing BetMGM.

How such a transaction would play out or if Entain even wants to consider remain to be seen, but it’s likely MGM would like first crack at the other 50% of BetMGM. It’s no secret that the casino operator would like to control all of the iGaming and online sports betting (OSB) entity.

BetMGM Prediction Markets Stance Advantageous

For now, BetMGM is staying away from prediction markets. That could work in the operator’s favor, allowing it retain more of its earnings while rivals DraftKings (NASDAQ: DKNG) and Flutter Entertainment (NYSE: FLUT) spend to compete with prediction market incumbents.

Jefferies’ Wheatcroft praised BetMGM for a product mix that tilts in favor of iGaming over sports wagering, providing some buffer against prediction markets encroachment.

“BetMGM’s cautious stance against launching a prediction product should see it deliver the highest level of EBITDA growth in FY26E, with FLUT/DKNG’s investments limiting guided EBITDA growth to c15%/c30% vs c50% for BetMGM. BetMGM’s iGaming-focused product mix also provides a greater degree of prediction market insulation, with c30% of NGR from OSB vs FLUT/DKNG’s c65%,” adds the analyst.