MGM Resorts is worth $17 billion and GVC is worth $8 billion.
MGM Resorts is in talks with GVC Holdings, owner of Ladbrokes-Coral Group, about a joint US sports betting venture, according to Sky News. While the discussions between GVC and MGM Resorts are about a nationwide US sportsbook operation, the speculation is a joint partnership might lead to a full-scale merge.
If so, then the combined corporate entity would be worth $26 billion. An executive from GVC Holdings told Sky News that the two sides were in “advanced discussions” over a joint venture.
This is not the companies’ first business interactions. Since 2013, MGM-owned Atlantic City casino Borgata has used software support from the Isle of Man-based GVC on its online gambling website.
Borgata Online once was the No. 1 online casino and poker site in the New Jersey market for its first several years, but since has fallen to No. 2 behind PokerStars in the iPoker market and No. 2 behind Golden Nugget/SugarHouse in the online casino niche. Still, Borgata is the most successful Atlantic City casino and remains the most successful online gambling brand, if both niches are considered.
$200 Million Investment by MGM/GVC
The prospective MGM/GVC online sports betting business will be a 50/50 operation, with both sides contributing $100 million investments in startup capital. While the joint venture will focus initially on the Nevada gaming market, MGM Resorts could launch online sports betting operations in several states. One can expect the Borgata Online Sportsbook to be launched in short order, as well.
MGM Resorts owns the Beau Rivage casino in Biloxi and the Gold Strike Casino in Tunica, so the Ladbrokes-Coral Group likely would support online sportsbooks in Mississippi, too. Mississippi legalized land-based sportsbooks earlier this month. Those bookmaker operations likely will launch intrastate online sportsbooks in the coming months and years.
US Sports Betting Expansion
Dozens of US states are expected to legalize sports betting. MGM Resorts owns casino-resorts in 7 US states, so it could open intrastate online and mobile sportsbooks in a variety of locations around the United States.
A merger between the two companies also would have the resources to invest in more casino locations in other US states. The repeal of the PASPA federal ban on sports betting is expected to lead to consolidation in the US gambling industry, as various companies seek better market positions in the expanding bookmaker business. Companies already have launched strategic partnerships, buyouts, and mergers in the two months since the US Supreme Court decision which legalized sports betting in 50 states.
GVC and MGM Resorts Compared
GVC Holdings has £6.29 million ($8.2 billion) in market capitalization, mainly through its Ladbrokes, Coral, and Gala brands. MGM Resorts has an estimated value of $17.2 billion. Besides world-famous casino-resorts like MGM Grand, Bellagio, and Borgata, MGM Resorts owns two lucrative casinos in the world’s top destination resort city, Macau.
The MGM Macau and MGM Cotai generate a large chunk of MGM Resorts’ revenues.
In the United States, the MGM National Harbor has been a big success in Baltimore, while the MGM Springfield is expected to open in Western Massachusetts later this year.
Paddy Power-Betfair Expansion
The deal helps GVC Holdings match the moves of two key rivals from the UK gambling industry: Paddy Power-Betfair Group and William Hill. Paddy Power-Betfair recently merged with daily fantasy sports juggernaut FanDuel, which has 6 million US sports gamers in its customer database.
William Hill US Operations
William Hill USA operates 108 of the 128 land-based sportsbooks and betting shops in Nevada, while it has a strategic partnership with Monmouth Park Racetrack in Oceanport, New Jersey. It was William Hill’s joint venture with Monmouth Park which led to the sports betting laws by the US sports leagues, which then led to the Supreme Court repeal of PASPA.
William Hill also announced a bookmaker deal with Ocean Resort Casino in Atlantic City. Ocean Resort is located at the old Revel Casino and is owned by Colorado real estate developer Bruce Deifik.
