July 29, 2018 - 7:50 pm
MGM Resorts International is sprinting out of the sports betting gates.
The Las Vegas-based casino operator is in talks with GVC Holdings, one of the world’s largest sports betting companies, about a potential sports betting joint venture.
The potential deal comes two months after the U.S. Supreme Court gave the green light to states to legalize sports betting, potentially creating a multi-billion dollar opportunity for casino operators.
“The group can confirm that discussions are at an advanced stage regarding such a joint venture and will update the market when appropriate,’’ U.K.-based GVC said in statement on Saturday.
MGM spokesman Brian Ahern declined to comment.
The U.K.-based media company Sky News reported Saturday that each company will contribute $100 million to the new 50-50 joint venture, citing unidentified sources.
“From MGM’s perspective, the deal looks to be primarily about gaining a technology and operational partner for sports betting and online casino and poker in the U.S. market as more states roll those products out,” said Chris Grove, managing director of sports and emerging verticals for Eilers & Krejcik Gaming, a California-based research firm.
MGM owns properties in Maryland, Massachusetts, Michigan, Mississippi and soon in New York that could potentially offer sports betting in the future.
MGM’s New Jersey property Borgata Hotel Casino & Spa recently began offering sports betting while Mississippi is expected to give casinos permission to offer sports betting as early as this week.
“A large bookmaking enterprise may be a lot more complicated than MGM thought,’’ said David Katz, a gaming analyst at Jefferies in New York, adding GVC could deliver a lot of value for the casino operator.
MGM could give more details on the possible joint venture on Thursday when CEO Jim Murren hosts a conference call with investors to discuss the company’s second-quarter results.
MGM Resorts and GVC announced in May 2017 that they were launching online casino and poker games in New Jersey under the playMGM brand.
The two companies have been working together for at least five years. GVC has powered the online offering at Borgata since 2013.
MGM COO Corey Sanders hinted at the possibility of working with GVC on sports betting in the May 2017 statement.
‘’GVC has been a first-rate partner for us and we are excited about the possibilities of extending that partnership as regulated markets open up in the U.S.,’’ Sanders said then.
GVC completed the acquisition of Ladbrokes Coral Group in March to give it 3,500 betting shops in the United Kingdom.