As the digital gambling partnership grows stronger between them, will GVC & MGM ever tie the knot?
They say long distance relationships rarely work out. But there’s one that has all the makings of a glorified fairy tale. A match made in Heaven, so they say. The two have been in courtship for quite some time, and their engagement is growing stronger. Could there be merger marriage bells in their future?
I’m talking, of course, about the relationship between GVC Holdings, the UK’s largest gambling firm, and US-based MGM Resorts International, the world’s largest casino, entertainment and hospitality brand.
GVC and MGM are poised to announce a new digital sports betting deal that could see them domineer the burgeoning US sports market.
GVC, MGM Digital Gambling Partnership Grows
On Saturday, it was revealed that these two global gaming brands have already agreed to a $200 million (£153mm) joint venture. They spent the weekend finalizing the contract, and according to Sky News, could release the official announcement as early as Monday.
The deal is said to revolve primarily around digital sports betting; an industry that’s sure to grow swiftly into the multi-billion-dollar range across the US. Sources say other online gambling services will also be in the mix.
Both GVC and MGM will invest $100 million (£76mm) into the deal, structuring a 50-50 partnership. GVC’s prominent technology and platforms will combine with MGM’s global namesake as one of the most famous hospitality groups in the world. Their joint operations will start in Nevada—the only US state where sports betting has been legal since 1992—and emanate outward, spanning the country as more states regulate digital sports gambling.
Some sources are predicting a 25-year partnership between the two; one that may even include the option to buy each other out after the first 10 years.
Wedding Bells in their Future?
This isn’t the first soiree GVC and MGM have attended hand in hand. Last year, the two initiated a joint venture in New Jersey to provide online casino and poker games via playMGM. And if recent merger history is any indication, these two could end up tying the knot in a record merger deal worth billions.
In one corner, we have GVC Holdings, with a market value of £6.29bn. It is the parent of such elite brands as Ladbrokes Coral Group, bwin, partypoker and Sportingbet. In the other corner is MGM Rwsorts Int’l, worth approximately $17.5bn (£13.4bn); twice that of GVC. MGM owns casinos, hotels, luxury golf resorts and other entertainment facilities from Vegas to the Cotai Strip and everywhere in between. Its properties include The Bellagio, The Mirage, MGM Grand Las Vegas, MGM Macau, and The Borgata in Atlantic City; just to name a few.
Multi-national mergers are the name of the game right now in the digital gambling sector; especially with the current condition of the US sports gambling market. Everyone is scrambling to partner with a US-based operation. PaddyPower Betfair has its eyes on DFS giant FanDuel, and reports indicate William Hill has spent the last few weeks negotiating with several companies.
A merger between GVC and MGM just seems right at this point. After all, Ladbrokes tied the knot with Coral before GVC scooped them up in March 2018 for an estimated £4bn. Canadian iGaming giant The Stars Group just paid £3.4bn to snag the UK’s SkyBet brand. Industry insiders appear keen on this happy couple taking the nest step to solidify their commitment.
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