Updated: September 30, 2022
MGM Resorts International has announced a 50/50 joint venture partnership with UK based GVC Holdings, one of the world’s largest online sports books, in a dramatic attempt to be the first major player out of the starting block after a recent U.S. Supreme Court decision opened the doors to legalized sports betting across the USA.
With the now legal sports betting market in the US estimated to be worth some $150 billion, MGM’s decision to partner with GVC, an experienced international player in the online sports betting market, signifies a major move to pick up a slice of that enormous pie.
“With MGM Resorts’ expertise and leading position in key markets across the U.S., this historic partnership will be positioned to become the instant leader in technology, market access, sports relationships and brands,” said Jim Murren, Chairman and Chief Executive Officer of MGM in a press release.
The joint press release went on to say, “With proven track records as partners of choice, MGM Resorts and GVC will bring together market-leading assets, distinguished brands, proven and scalable proprietary technology, and extensive industry expertise to revolutionize the world of sports betting and online gaming in the United States. The formation of the joint venture significantly increases speed to market for both parties in an efficient and prudent manner, lowers execution risk, and creates meaningful early mover advantages.”
“We are excited to benefit from GVC’s proprietary, best-in-class technology, digital customer acquisition expertise, and experience with adapting to new operating environments. GVC is unusually qualified due to their existing operations in the U.S.,” said Murren.
The first steps to mega merger?
While the specifics of the deal were being kept under wraps, Sky News reported that as part of the deal each partner would invest some $100 million in a 25 year partnership. The media outlet went on to speculate that the deal would be the early steps on the road to a $26 billion mega merger between MGM and GVG that would create a “global gambling behemoth”.
GVC Holdings, which is listed on the London Stock Exchange, reported some $1.046 billion in revenue last year, with net income of $39 million. New York Stock Exchange listed MGM, on the other hand, posted $9.8 billion in 2017 revenue with reported net income of $3.1 billion.
A tale of two lions
However, as Sky News reported, 49 year-old GVC CEO Kenny Alexander has a long track record of going after big game mergers and acquisitions. After starting as an accountant at Sportingbet in the UK, he rose quickly through the ranks to become CEO and embarked on a series of major acquisitions to build a company with a solid online sports betting presence combined with brick and mortar shops.
The company itself was founded in 2004 in Luxembourg and reorganized under the name GVC Holdings in 2010. GVC then went on to acquire the UK sports book Sportingbet in a deal worth $711 million. In 2016, GVC picked up Bwin Party Digital Entertainment for $1.48 billion and the well-known UK sports book Landbrokes Coral for $5.3 billion.
Today the company operates some 10 major brands, focused on the UK, Germany, Italy and South America to the fledgling US market that include both online sports betting and casino gambling sites as well as retail sports betting shops across the UK.
MGM Resorts International is global monolith in the casino market operating properties around the world, including the Bellagio, MGM Grand, Mandalay Bay and The Mirage in Las Vegas, the MGM Springfield in Massachusetts and the National Harbour in Maryland as well as mega integrated casino resorts in Macau and Singapore among other properties.
Led by 56 year-old CEO Jim Murren, MGM has completed some $15 billion worth of acquisitions under his tutelage and is clearly eager for more. The partnership between the MGM lion and the British lion could well be the starting gun in the race to form the world’s largest casino and sports betting empire.
With the race now on to corner the lucrative but young US sports betting market, the deal between Alexander and Murren, was described as “a masterstroke” by one insider speaking to UK based Sky News.