Mega-bucks deal confirmed as GVC and MGM look to dominate US sports betting
The owner of Ladbrokes and Coral announced on Monday morning that they are entering into a joint venture with the world's largest casino business in a deal intended to "dominate" the newly-opened US sports betting market.
GVC Holdings and MGM Resorts International, owner of famous Las Vegas brands including the MGM Grand, Bellagio and The Mirage, confirmed the $200 million (£153m) venture following reports over the weekend that they were close to finalising an agreement.
GVC said the deal would combine their technology with MGM Resorts' brands and national footprint, with a "clear path" to access in 15 states with a total population of 90 million.
The US Supreme Court lifted the ban on sports betting in the US in May, leading to a scramble by multi-national gaming groups to secure a slice of the market.
GVC already had a partnership with MGM to provide online casino and poker games in New Jersey, while their purchase of Ladbrokes included Nevada-based racing and sportsbook technology provider Stadium Technology Group.
GVC's chief executive Kenny Alexander said: "MGM Resorts is a world leading entertainment business and the most trusted name in gaming, with the highest quality brands and management, and strong sports connectivity.
"This combined with GVC’s technology and experience in successfully building online gaming businesses across multiple markets presents a truly exciting opportunity for US players and our respective shareholders. To be able to team up with a partner with such pedigree and knowledge, particularly in the US, is a real opportunity for GVC."
MGM and GVC have agreed initial commitments of US$100 million each under the 25-year deal.
A separate headquarters will be established in a "major US technology hub", with a leadership team selected from each company and additional new hires along with a four-person board with equal representation from both partners. Business is to be conducted primarily under the playMGM and Partypoker brands.
MGM Resorts chairman and chief executive Jim Murren said: "We are proud to join forces with GVC, the largest and most dynamic global online betting operator, with existing reputable and trusted operations in the U.S.
"With MGM Resorts' expertise and leading position in key markets across the US, this historic partnership will be positioned to become the instant leader in technology, market access, sports relationships and brands. 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 US. Together, we are creating a one-of-a-kind platform that we expect will dominate the US sports betting market."
Analysts at Goodbody said the deal would be well received by the markets. They added: "GVC’s CEO had commented back in May that the group would do something 'big and bold' in the US and this ticks that box."
GVC's share price closed more than five per cent up on Monday at 1,154p.
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