A customer of BetMGM has sued the sports betting and online gaming operator for inducing him to cover up glitches and preventing him from reporting the same to regulators. BetMGM is a joint venture between MGM Resorts International (NYSE:MGM) and British firm Entain PLC. According to the Wall Street Journal, customer Sam A. Antar alleged that he regularly faced thousands of gaming disconnections (between May 2019 and January 2020), often in the midst of favorable hands, which he believes deprived him of potential winnings. The lawsuit has been filed in the New Jersey Superior Court.
The customer stated that despite his complaints, BetMGM did not address the issue and instead gave him free betting credits (bonuses) to continue gambling. Such bonuses totaled more than $30,000 per month. Antar blamed BetMGM for increasing his gambling addiction. The lawsuit, filed against BetMGM, MGM Resorts, Entain, and the Borgata casino in Atlantic City, New Jersey, seeks substantial damages for alleged corrupt and fraudulent practices.
MGM incurred $71.2 million of losses related to BetMGM in the second quarter of 2022, up from losses of $46 million in the prior-year quarter. BetMGM delivered revenue of $608 million in the first half of this year, up 70% year-over-year. MGM believes that BetMGM is on track to deliver revenue of $1.3 billion this year. It expects BetMGM to be profitable by 2023-end.
What is MGM’s Target Price?
MGM Resorts stock scores the Street’s Strong Buy consensus rating based on nine Buys and three Holds. The average MGM price target of $53.45 implies nearly 75% upside potential from current levels. MGM stock has declined about 32% year-to-date.
