How BetMGM's Q1 2026 Earnings Prove Prediction Markets Are Disrupting Sports Betting
BetMGM CEO Adam Greenblatt named prediction markets as a direct competitive threat on the April 14 Q1 2026 earnings call. Here's what the data shows and what it means for prediction market traders.
For years, traditional sportsbooks dismissed prediction markets as a curiosity — federally regulated, yes, but not a real competitive threat. BetMGM's first-quarter 2026 earnings call ended that argument.
On April 14, CEO Adam Greenblatt didn't bury the competitive pressure in boilerplate language. He named it directly: "This jump is largely driven by new sports betting companies buying media in the category," he told investors. "They call themselves prediction markets."
That single sentence marks a turning point in how the American gambling industry publicly accounts for prediction market competition. It's also a data point that prediction market users — the people actually trading on Kalshi, Polymarket, and their competitors — should understand.
What BetMGM's Numbers Actually Show
BetMGM, the joint venture between MGM Resorts International and Entain plc, reported Q1 2026 net revenue of $696 million, up 6% year-over-year, according to its official April 14 business update released via PRNewswire. That top-line number looks decent — but it missed Wall Street consensus estimates of roughly $767 million and prompted a guidance cut.
Here's what the Q1 financials actually showed:
| Metric | Q1 2026 | Q1 2025 | Change |
|---|---|---|---|
| Total Net Revenue | $696M | $657M | +6% |
| iGaming Revenue | $481M | $443M | +9% |
| Online Sports Revenue | $203M | $194M | +4% |
| Adjusted EBITDA | $25M | $22M | +11% |
| Average Monthly Actives | 975,000 | 1,067,000 | -9% |
Source: BetMGM Q1 2026 Business Update, PRNewswire, April 14, 2026
Two things stand out. First, iGaming (online casino) is growing nearly twice as fast as online sports. Second — and this is the number that tells the story — monthly active users fell 9% while overall revenue still grew. BetMGM is making more money per user even as it loses users overall. The company updated its full-year 2026 net revenue guidance to $2.9–$3.1 billion, down from a prior range of $3.1–$3.2 billion.
Greenblatt's Diagnosis: Prediction Markets Are Buying Sports Bettors
Greenblatt was unusually direct about what's driving this. The earnings call transcript, confirmed by multiple financial outlets, includes his full characterization:
"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."
This is a CEO of a major publicly traded company explaining — on the record, to investors — that prediction market operators are functionally competing in the same customer acquisition market as traditional sportsbooks. Not as a niche curiosity. As a direct competitor.
The practical consequence BetMGM cited: customer acquisition costs for online sports betting rose materially in Q1, compressing margins and contributing to the guidance reduction.
The Fork in the Road: Hedge or Hold the Line
What makes BetMGM's position especially revealing is the contrast with its major competitors. DraftKings, FanDuel, and Fanatics have all launched prediction market products, accepting the regulatory risk BetMGM has explicitly declined to take.
Why won't BetMGM enter prediction markets? Greenblatt has been consistent on this point: launching sports event contracts could jeopardize the company's brick-and-mortar casino licenses in Nevada and other states. MGM Resorts' land-based properties are a core asset, and introducing a CFTC-regulated product that several state attorneys general have labeled illegal gambling would put those licenses at risk.
DraftKings, by contrast, has leaned into prediction markets aggressively. In its February 2026 earnings call — the one where Bloomberg reported DraftKings fell to its "largest intraday drop in nearly three-and-a-half years" on conservative guidance — CEO Jason Robins described prediction markets as the biggest growth opportunity for the industry since the 2018 Supreme Court decision that opened sports betting nationally. Robins projected the category could become a $10 billion annual revenue opportunity and said DraftKings intends to lead it.
The two strategies represent a genuine fork:
BetMGM's bet: Regulatory and legal challenges will eventually restrict prediction market sports contracts. States will win their lawsuits. The companies spending lavishly on customer acquisition will be burned when the regulatory environment shifts. Premium sports bettors — the high-value segment — will return to licensed sportsbooks when the promotional spending dries up.
DraftKings/FanDuel's bet: Prediction markets are federally protected under CFTC jurisdiction, the legal battles will resolve in their favor, and operators who are early in the space will own the category.
Both bets can't be right.
What the Q1 Data Tells Prediction Market Traders
If you're a prediction market user, BetMGM's earnings data matters beyond the sportsbook industry drama. A few things worth noting:
Prediction market platforms are now buying media at scale. Greenblatt's description of operators "throwing money at any sports media property that will take it" reflects the aggressive marketing push from Kalshi and others in early 2026. This is a sign of a category fighting for mainstream legitimacy, not a niche product.
The sportsbook establishment views this as temporary. Greenblatt repeated his belief that most users who've moved to prediction markets will eventually return, and that the current spending environment is unsustainable. Prediction market operators have a different view. That disagreement is now being measured quarterly in public earnings data.
Regulatory outcomes are still the wildcard. BetMGM's CFO Gary Deutsch noted on the call that the company is "refining its approach to OSB marketing for the rest of the year under the assumption that current media conditions persist." BetMGM is not assuming prediction markets will be regulated out of existence — it's planning around the current landscape while betting long-term on a favorable regulatory shift. With the CFTC's Advance Notice of Proposed Rulemaking (ANPRM) comment period closing April 30, 2026, and the Ninth Circuit having heard oral arguments on the federal preemption question just days before BetMGM's earnings call, the regulatory picture could shift substantially before Q2 2026.
The customer who left BetMGM for prediction markets isn't necessarily a high-value user. BetMGM's own data suggests the users declining are recreational bettors — lower-value customers who respond to promotional offers. Handle per active user and revenue per active user both increased year-over-year, suggesting BetMGM's remaining customer base is more engaged, not less. If you're using prediction markets because you find the format more interesting — cleaner contracts, no parlay traps, transparent pricing — you're probably not the customer BetMGM thinks it's losing.
The Question Prediction Markets Still Need to Answer
Greenblatt made one point that's worth sitting with: the "hardcore grinder poker" analogy. He argued that prediction market platforms are, in effect, a high-information environment where recreational users lose quickly and stop participating — the same dynamic that eventually hollowed out the US poker market.
It's a fair concern to raise. Prediction markets reward information: sophisticated traders with edge tend to win, while uninformed participants provide liquidity and exit. If platforms don't solve for recreational engagement at scale, the user acquisition spending Greenblatt is criticizing might not produce durable economics.
None of that changes the fact that Q1 2026 is the first time a major US gambling operator has explicitly attributed guidance pressure — not just competitive noise — to prediction market competition. The industry is past the point of denial.
Frequently Asked Questions
Does BetMGM have any prediction market products? No. BetMGM does not currently offer any prediction market or event contract products. CEO Adam Greenblatt has said the company will not be a first mover in this space, citing risks to its casino licensing agreements in Nevada and other states.
Can I still bet on sports through BetMGM if I also use prediction markets? Yes. BetMGM operates in more than 25 states as a licensed sportsbook and iGaming operator. Using Kalshi, Polymarket, or other prediction market platforms separately doesn't affect your BetMGM account.
Did DraftKings or FanDuel report Q1 2026 earnings with prediction market data? DraftKings reported in February 2026 that prediction market impact on its revenue was "de minimis" through Q4 2025, and guided to a $10 billion market opportunity long-term. Q1 2026 earnings for DraftKings and FanDuel parent Flutter Entertainment were expected later in April 2026.
What is BetMGM's ownership structure? BetMGM is a 50/50 joint venture between MGM Resorts International (NYSE: MGM) and Entain plc (LSE: ENT). Neither company is a prediction market operator.
What is the CFTC ANPRM and why does it matter to BetMGM? The CFTC's Advance Notice of Proposed Rulemaking on prediction markets (published March 2026) is an information-gathering step. The comment period closes April 30, 2026. Greenblatt referenced the ANPRM process on the earnings call when noting that BetMGM, along with state attorneys general, is "awaiting potential US Supreme Court consideration" of the state-vs-federal jurisdiction question. A CFTC rule that clarified or restricted prediction market sports contracts would directly validate BetMGM's decision to stay out.
Sources & Verification
- BetMGM Q1 2026 financial data (revenue, EBITDA, MAU, guidance): BetMGM Q1 2026 Business Update — PRNewswire, April 14, 2026 — verified April 18, 2026
- MGM Resorts investor relations (same release): investors.mgmresorts.com — verified April 18, 2026
- Greenblatt "They call themselves prediction markets" quote and earnings call commentary: Cited consistently across multiple financial outlets reporting the April 14 call; primary attribution to the BetMGM April 14, 2026 investor call
- DraftKings 2026 guidance and Robins commentary: Bloomberg, February 12, 2026 — verified
- CFTC ANPRM and April 30 comment deadline: Federal Register, RIN 3038-AF65, published March 16, 2026 — verified
- Kalshi and Polymarket lobbying context: CNBC, Alex Harring, April 15, 2026 — verified
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