MGM Resorts and British gaming giant GVC have announced a massive $200 million joint venture to take advantage of the nascent US sports betting market. Each company is putting $100 million into the deal.
The partnership is a 50/50 venture and will last 25 years, according to a GVC investor communication. The Powerpoint went on to mention that business will primarily occur under the playMGM and partypoker brands.
“With MGM Resorts’ expertise and leading position in key markets across the U.S., 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 U.S.”
The joint venture is symbiotic
As Mullen intimated, there are concrete reasons for each side of the venture. From MGM’s point of view, GVC’s sports betting technology will allow MGM to pursue sports betting in US states as they legalize the practice.
For GVC, the deal opens the door to the US wider for the British gaming company. GVC has provided online casino solutions for American companies before, including at MGM’s Borgata Casino Hotel & Spa in New Jersey.
GVC is much more established in Europe, where its bwin.party and newly-acquired Ladbrokes Coral maintain strong presences. However, the company will now be able to enter into 13 Las Vegas casinos and two other states – New Jersey and Mississippi – where sports betting is legal and MGM owns property.
MGM also owns casinos in four other states where sports betting legalization is a strong possibility. Michigan, Maryland, New York, and Massachusetts all have sports wagering bills alive or expected in their legislatures, with legalization to come in 2019.
MGM either already owns or will own casinos in those four states.
MGM didn’t sleep this weekend
The deal with GVC was not the only move that MGM made in the past two days. MGM and Boyd Gaming will now share an access partnership.
In other words, the two will allow each other to use state licenses as needed. Boyd will gain access to states where MGM operates and vice versa.
This arrangement is critical for MGM’s sports betting aspirations, as the company does not own a property in Pennsylvania, where sports betting is soon to be a reality. However, Boyd Gaming is in the process of purchasing Valley Forge Casino Resort in King of Prussia, Pennsylvania.
Interestingly, GVC is rumored to have been discussing a partnership with Valley Forge. It is unclear whether Boyd would honor the deal if it were to go through.
However, given the close relationships all three of these companies enjoy, these announcements may just be formalities for them.