Ladbrokes Coral’s new owner, GVC, and MGM Resorts have announced a $200 million venture that will unite the UK’s biggest retail betting operator with one of the world’s biggest casino groups in a joint bid to dominate the newly liberalized US sports betting market.
GVC and MGM said in a joint press release they will build “a world-class sports betting and online gaming platform” which would have “meaningful early mover advantages.”
The plan is to launch ahead of the new NFL season in September — although the deal will first need to pass regulatory muster.
The two gambling giants will split ownership of the venture 50/50, each contributing $100 million. GVC has an existing commercial relationship with MGM in New Jersey, where it supplies technology for the Borgata’s online poker and casino operations, though PartyPoker — and the Party brand will also play a significant role in the deal.
Not Just Sports Betting
“The new venture will have exclusive access to all US land-based and online sports betting, online real money and free-to-play casino gaming, major tournament and online poker, and other similar future interactive businesses — facilitating entry into multiple digital gaming verticals under the playMGM and partypoker headline brands,” the two companies said.
The venture will also allow for full integration between the MGM Resorts and GVC loyalty programs, enhancing the user experience and value proposition for existing and future customers.”
In May, the US Supreme Court rejected PASPA, the federal law that had prohibited state-sanctioned sports betting since 1992, paving the way for states to legalize and regulate bookmaking operations.
‘De-Risking’ the Market
While the biggest betting operators from the UK and Europe — names like William Hill, Paddy Power Betfair and Bet365 — have been busily forging deals as they seek to make inroads into the gradually emerging markets, Ladbrokes and GVC had been oddly quiet.
It’s now clear why. For GVC, MGM Resorts represents the holy grail of potential US partners. Beyond its domination of the Las Vegas Strip, MGM has often market-leading presence in many states that either have or are likely to regulate sports betting, like New Jersey, Mississippi, Massachusetts, Maryland, and Illinois.
The deal will ease the Ladbrokes brand into a powerful market position. Ivor Jones, an analyst at Peel Hunt, noted that, beyond its initial outlay of $100 million, GVC will not be required to spend big on a range of different market-entry strategies, as will many of its competitors.
“GVC has signed up for a joint venture with one of the largest gambling businesses in the US on an exclusive basis,” he said in the note. “If the joint venture works, then it will de-risk access to the US sports-betting market for both parties.”