Since launching, joint venture BetMGM has grown steadily in the US, no doubt due to support from both its parent companies: Entain and MGM Resorts.
The partnership between the two dates back to July 7 2018, when Entain (then GVC Holdings) signed a $200m (£152m) deal with MGM Resorts, with a plan to launch a joint venture into the newly emerging US sports betting market.
Thus, BetMGM was born.
This was signed only two months after the US Supreme Court overturned PASPA and gave individual states the chance to legalize sports wagering. This made Entain one of the first operators to actually enter the US sports betting market.
The next year would really kick things off, though, with BetMGM opening the Moneyline Sportsbook in Borgata for $12m on June 28 2019 and the online app in New Jersey a few months later on September 6.
The brand would only continue to grow, and now holds a #1 position within iGaming in the US and is challenging at #3 or #4 across states in sports betting.
Of course, while Entain has 50% ownership of the BetMGM project in the US and Canada, MGM Resorts managed to keep 100% ownership of the BetMGM brand outside of these jurisdictions, including Entain’s British home turf.
This was possible by MGM utilizing technology from LeoVegas and Kambi, while the US brand would continue to use the technology and platform provided by Entain.
“We do not consider that the UK launch will make any impact to our business or indeed the market" - Entain
Naturally, this raised questions about the future of Entain and its involvement with BetMGM.
This wasn’t the first time this idea had been raised, though, as MGM Resorts actually proposed an $11bn acquisition deal in January 2021, which Entain ultimately refused.
When DraftKings also announced a similar plan a few months later, MGM confirmed it would have taken over BetMGM if DraftKings had signed the deal to acquire Entain.
There were also interesting comments made during BetMGM’s most recent conference call, with the brand confident in its relationship with MGM Resorts.
On the issue of cannibalisation between land-based and online customers between BetMGM and MGM Resorts, Gary Deutsch, BetMGM CFO, commented that the issue “is not something we spend any time talking about between us”.
This wasn’t the only confident statement from the call, however.
Adam Greenblatt, BetMGM CEO, said: “Our relationships with both Entain and MGM Resorts have become ever deeper.
“In the beginning, BetMGM was a plucky start-up with mixed views on its potential to take a position to be meaningfully valuable and contributing to our shareholders. Today, that’s not the case at all” - Adam Greenblatt, BetMGM CEO
It’s hardly an industry secret that MGM Resorts has been interested in buying out Entain, at least for the BetMGM brand.
Despite Bill Hornbuckle, MGM CEO, saying that it was ‘unlikely’ that the company would make another bid for Entain at the start of the year, a lot has happened in the industry since then.
With Entain shares dropping to their lowest in years and its CEO, Jette Nygaard-Andersen, stepping down with immediate effect, this has created the perfect opportunity for any interested buyers to make a move.
But perhaps Entain’s weaker position in fact provides the perfect opportunity for MGM to go in another direction.
At least, in regards to BetMGM, it could be prime time for MGM Resorts to take full control of the brand away from Entain.
It would also provide some much-needed positive press for MGM Resorts, strengthening its public image after the recent cyberattacks and security breaches.
By making a play for 100% ownership of BetMGM, this would certainly show that MGM is once again in control of its business.
And with no permanent CEO in place (and Entain’s recent performance under great scrutiny), MGM might have its clearest run yet at claiming BetMGM all for itself.
