BetMGM Had a Rough Q1 and Is Openly Blaming Prediction Markets — What That Means for Bettors in 2026

BetMGM posted first-quarter 2026 revenue of $696 million last week, up 6 percent year over year. By most standards that is a reasonable quarter for a large online gaming operator. But the Wall Street consensus estimate was $767 million, the company cut its full-year revenue guidance from $3.1 to $3.2 billion down to $2.9 to $3.1 billion, and the earnings call was notable primarily for what CEO Adam Greenblatt said about why: prediction markets are eating the company’s lunch at the customer acquisition level, and that problem is not going away.

For bettors, the specifics of what BetMGM is facing — and how it plans to respond — matter because they directly shape the promotions, player management decisions, and market strategy of one of the five largest US sportsbooks. When a major operator adjusts its behavior under competitive pressure, the downstream effects reach every player who bets on the platform.

The Numbers Behind the Miss

The $696 million figure breaks down into two segments that tell different stories. iGaming net revenue was $481 million, up 9 percent year over year, driven by what Greenblatt described as better player management and exclusive content deals. Online sports betting net revenue was $203 million, up 4 percent, on a handle of $4.2 billion. Adjusted EBITDA reached $25 million, an 11 percent increase, though that figure also came in below analyst expectations of approximately $34 million.

Monthly active users declined 9 percent year over year to approximately 597,000 overall, with online sports monthly actives down 16 percent. The company attributed part of that user decline directly to competition from prediction markets. CFO Gary Deutsch said the revenue guidance reduction reflected factors “in both” the first quarter and the remainder of the year, with sports results in Q1 described as “driven by a lot of bad results for the house.”

The Prediction Markets Problem, in Greenblatt’s Own Words

Greenblatt did not bury the competitive threat in boilerplate language. He addressed it directly. The core issue, as he described it on the April 14 call, is that prediction market platforms — and he named Kalshi specifically — have been buying the same media inventory that traditional sportsbooks use to acquire customers. Keywords, sports media properties, television advertising: prediction market companies are bidding on the same channels.

“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,” Greenblatt said on the call. “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 scale of Kalshi’s presence in sports is considerable. Kalshi controlled approximately 89 percent of US prediction market volume as of early April 2026, according to Bank of America analysis, with Polymarket and Crypto.com splitting the remainder. In its 2025 full-year results, Kalshi generated $263.5 million in fee income, with 89 percent of that — roughly $234.6 million — coming from sports. That puts Kalshi’s sports revenue in the same neighborhood as BetMGM’s $203 million online sports net revenue for a single quarter.

What BetMGM Is Actually Going to Do About It

The company’s response is essentially a strategic retreat from customer segments it has decided are not worth the current cost to acquire. BetMGM said it will reduce marketing spend in states where it only offers sports betting without an iGaming product, on the grounds that its product suite is less differentiated in those markets and the customer acquisition payback period is too long under current media cost conditions. Money will be reallocated toward iGaming markets and multi-product states where the company’s product suite is broader and player lifetime value is higher.

Greenblatt confirmed the company is assuming current cost-per-acquisition conditions persist for the rest of 2026. BetMGM is not expecting the prediction market advertising pressure to resolve itself — it is building that environment into the plan for the year.

What This Means for Players in 2026

When a sportsbook decides its customer acquisition economics are broken, the first things that typically change are promotional structures. Looser sign-up offers tighten. Ongoing reload bonuses get smaller or harder to qualify for. Odds boosts and free bet programs get pruned for players who do not represent high enough long-term value. BetMGM has been explicit that it is trying to retain higher-value bettors while accepting the loss of recreational players who were being poached by prediction market platforms.

For the sharp bettor, this creates a straightforward dynamic: operators fighting for market share tend to compete harder on price and promotion. BetMGM’s response is the opposite — they are deciding which fights are worth having. In sports-only markets, they are effectively stepping back. That could mean thinner promos, less competitive lines, and less aggressive player acquisition in those states.

The broader message from BetMGM’s quarter is that the US sports betting industry is no longer in the growth-at-any-cost phase. Operators are under earnings pressure. The prediction market category is generating revenue comparable to mid-tier licensed sportsbooks despite operating under a different regulatory framework and without paying state sports betting taxes. That tension is real, it is quantified now, and it will shape the competitive environment for every bettor in every market for the foreseeable future.