Casino operator MGM Resorts is striving for more significant influence in the online betting market
The MGM Resorts International casino chain (NYSE: MGM) is seeking to obtain a controlling stake in the BetMGM online betting joint venture. However, other market players are also interested in a promising company. BetMGM is a joint venture between MGM Resorts and the British company Entain, which owns equal shares.
BetMGM has agreements with most major sports leagues, which allows it to become their official betting platform. In addition, the platform has teamed up with Boyd Gaming to offer web services and mobile gaming platforms (sports betting, casino games, and poker) and has also bought the Empire City Casino in New York pending the state’s approval of sports betting. Not so long ago, BetMGM became the second-largest online betting app in the United States by revenue share, ahead of DraftKings. MGM Resorts seeks a controlling stake in this joint venture; however, Entain has also received a buyout offer from DraftKings.
At the same time, DraftKings offers a price of $22 billion, which exceeds its market value. Earlier, Einstein rejected a purchase offer from MGM Resorts, which offered $11 billion.
Thus, Entain has not yet decided. The agreement with MGM Resorts allows the latter to veto any ties between Entain and another company, at least in the North American market. According to Wall Street experts, MGM Resorts can exercise this right. Most likely, all three companies will need to agree. Licensing of BetMGM technology may be one of the options.
It is not the best solution. It will leave MGM Resorts without ownership of the critical systems that run the online betting application, including the betting calculation system and the player account. MGM Resorts management notes that their goal is to own the technology to run an online betting business. Online sports betting and online games open up $40 billion in market opportunities for MGM Resorts.
Thanks to exclusive access to all MGM Resorts physical casinos in the USA, the BetMGM platform has become the fastest growing mobile betting platform in the industry with a monthly increase in market share and the leading online casino platform in many states. BetMGM operates in 12 states, but MGM Resorts expects that by the end of 2021, it will be possible to use in 20 states, that is, by about 40% of the US territory.
MGM Resorts also maintains leadership in the traditional gambling market. Last week, the company acquired the Cosmopolitan Center in Las Vegas for $1.625 billion.
The acquired multifunctional center includes more than 3,000 rooms and suites, a casino, 26 restaurants, a theater, a nightclub, and other facilities.
The Cosmopolitan brand is known worldwide for its unique customer base, high-quality product, and experience. Thus, the new acquisition will join Bellagio, MGM Grand, ARIA, Mandalay Bay, The Mirage, New York-New York, Park MGM, and others operating under the MGM brand. At the auction on October 8, MGM stock was worth $44.43.
