GVC and MGM joint venture targets US first mover advantage

GVC and MGM joint venture targets US first mover advantage

Monday, July 30, 2018 Posted by Luke Massey
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The 50/50 joint venture will start with a $200 million capital injection

Confirmation of a deal between GVC and MGM Resorts has cleared the path for two multi-billion dollar gaming businesses to create a “one of a kind” platform for the US sports betting market.

The 50/50 joint venture will combine technology from GVC, the owner of Ladbrokes Coral, with MGM’s significant domestic market reach. This extends to 14 resorts, nine of which are in Las Vegas, 27 million loyalty members and an 11% share of the US casino gaming market by revenue.

Capitalised by an initial commitment of $100 million each, the arrangement has seen the two companies grant exclusive access to one another for all US land-based and online sports betting, online real money and free-to-play casino gaming, as well as major tournament and online poker.

Business is to be conducted primarily through playMGM and partypoker brands, while the joint venture will also benefit from MGM’s market access agreement with Boyd Gaming, which provides a pathway to access 15 states with an addressable population of approximately 90 million.

Kenneth Alexander, Chief Executive of GVC, 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.”

Jim Murren, Chairman and Chief Executive Officer of MGM Resorts, added: “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 US. 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.”

The venture will establish a separate headquarters to be located in a major US technology hub, select a leadership team comprised of best-in-class talent from each company and additional new hires, and form a four-person board of directors with equal representation from MGM Resorts and GVC to oversee the venture’s ongoing operations and growth.

Totally Gaming says: GVC and MGM are excited to announce the formation of the joint venture ahead of the American football season, the first since May’s PASPA repeal. While it is expected to increase speed to market (and subsequent first mover advantages) for both parties across the US, it remains to be seen whether MGM can take its stronghold outside of Nevada, where sports betting is of course already legal.

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