MGM Digital Narrows Loss to $4m as Revenue Growth Slows to 6%
MGM Digital posted third-quarter revenue of $184m, up 6% from $174m a year earlier. That's the LeoVegas-led international online arm of MGM Resorts, and the growth is a sharp slowdown from the prior quarter. UK and European operators are absorbing higher taxes. The segment's adjusted EBITDAR loss narrowed to $4m, from $23m a year earlier. Nearly break-even now.
The improvement came in a weak quarter for the parent. Group adjusted EBITDA fell to $403m from $506m. Regional Operations revenue dropped 8%, and Las Vegas Strip resorts fell 2%. Strip EBITDAR declined 12% to $531m. Average daily room rate in Las Vegas slid 8% to $218, and revenue per available room fell 8% to $193. Occupancy held at 89%.
MGM Digital bundles LeoVegas with other consolidated interactive subsidiaries. The BetMGM North America joint venture sits outside it. LeoVegas has been in MGM's accounts since the acquisition closed on 7 September 2022. Over the first nine months, segment revenue is up 21%. Note that the second quarter's stronger rise was recorded with the higher UK online casino tax already in force. That duty increase is part of a package the government says will raise more than £1bn a year.
BetMGM lifted MGM Digital's business-to-consumer revenue by 8%, with Spain, the Netherlands and the UK leading the gains, management told analysts. In August, MGM began running online sports betting in the UK on its own platform. That platform now generates more than 80% of the company's online sports revenue there. And the next UK tax change is already scheduled: a new 25% remote betting rate within General Betting Duty takes effect in April 2027.
Macau was the bright spot. MGM China posted record revenue of $1.1bn, up 5%, and a record 17.1% market share. Segment adjusted EBITDAR still fell 7% to $264m from $284m, as intercompany branding licence fee expense rose by $22m year on year.
The net loss attributable to MGM narrowed to $17.1m from $285.3m a year earlier. Adjusted earnings per share missed expectations, a sign of pressure on large land-based casino operators.
In North America, BetMGM reported third-quarter net revenue of $710m, up 7% on $667m. The joint venture with Entain paid MGM $34m in the quarter. BetMGM said it expects to finish 2026 near the bottom of both guidance ranges: $2.9bn to $3.1bn for net revenue and $300m to $350m for adjusted EBITDA.
The number to watch is the $4m loss. Another quarter of 6% growth against a 21% nine-month run rate would leave MGM Digital's break-even target exposed to the April 2027 UK duty change.