MGM Could Look to Unlock BetMGM Value, Says Analyst
Posted on: January 8, 2026, 06:00h.
Last updated on: January 8, 2026, 06:00h.
- Rise of prediction markets could prompt investors to look for other digital gaming growth vehicles.
- There’s long-running speculation about what MGM could do with the online gaming unit.
- Analyst says DraftKings, Flutter valuations could provide templates for BetMGM valuation.
Could this finally be the year in which MGM Resorts International (NYSE: MGM) moves to acquire the 50% of BetMGM it doesn’t own and explore avenues for unlocking that unit’s value for shareholders?
One analyst believes those are possibilities. In initiating coverage of the Bellagio operator, Texas Capital analyst David Bain notes that with BetMGM rivals DraftKings (NASDAQ: DKNG) and FanDuel parent Flutter Entertainment (NYSE: FLUT) moving into prediction markets, that could compel investors to examine other digital gaming growth vehicles. That could motivate MGM to evaluate options for BetMGM.
We believe this, in turn, should re-expose circular, digital/omnichannel benefits and the significantly implied lower digital valuations of MGM and Caesars versus digital peers,” observes Bain who rates MGM a “buy” with a $56 price target.
There’s ample speculation about the possibility of Caesars Entertainment (NASDAQ: CZR) potentially spinning off its digital business. That’d be an easier lift for that operator because it wholly owns its interactive unit whereas MGM and Entain Plc (OTC: GMVHY) each own half of BetMGM.
BetMGM Speculation Returns
MGM leadership has made clear it’d like full control of BetMGM — a desire that could be growing strong as the business’s finances steadily improve. How and if such a transaction plays out remains to be seen.
As Bain points out, MGM could buy out Entain’s 50% stake in the online sportsbook operator or acquire the Ladbrokes owner outright. The Luxor operator attempted to do just that five years ago only to be rebuffed. Still, five years in corporate terms is an eternity and there’s sell-side sentiment that following years of leadership changes, Entain is steadying and now could be the time for the company to monetize its BetMGM interest.
“BetMGM consolidated in MGM financials and the optionality of a partial (or full) spinout of the business while maintaining the digital benefits to its land-based business should support a higher overall valuation, in our view,” says Bain.
The Texas Capital analyst points out that Entain trades at 8x estimated 2026 enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA) and that if MGM wanted to acquire the company outright, it’d likely have to offer well north of 10x EV/EBITDA though he acknowledges there haven’t been “strong checks suggesting any potential price bogey of late.”
iGaming Makes BetMGM Attractive for MGM
There’s a long way to go before MGM can even consider the idea of spinning off BetMGM to public investors, but iGaming is likely a source of that desire. Bain notes BetMGM’s US iGaming market share of 20% compares favorably with the 25% and 24%, respectively, of FanDuel and DraftKings, underscoring the point that on a standalone basis, BetMGM could be valued comparably to those rivals.
Additionally, while conventional wisdom holds it’s unlikely any states will approve internet casino legislation this year, it’s possible prediction market expansion will force legislators to reconsider.
“While there is little momentum in any state for new iGaming expansion fiscal state concerns could reverse the current lack of momentum,” concludes Bain. “Overall, we believe additional iGaming state expansion is a “matter of time,” though timing visibility is admittedly low. Notably, almost all states are already ‘a little pregnant,’ with other approved forms of gaming.”
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