Having forged a formidable range of betting-related partnerships in 2018, America’s largest casino group, MGM, is leading the charge across new US betting markets.
Of all the stakeholders in US gaming, few are doing more to secure their share of sports betting revenues than MGM.
While many of the larger firms in Europe are undergoing yet another wave of mergers and acquisitions, the US market has thus far escaped that fate, with many of the incumbent operators – casinos – opting instead for joint ventures with European sportsbooks and / or data sharing and mutual marketing deals with the now prized sports leagues.
In both cases, MGM is out in front. In terms of league deals, all the major sports leagues, with the stark exception of the NFL, have sides with MGM.
Football may be the pick of the bunch when it comes to US sports, but the league is still not quite willing to stare directly into sun. It stole headlines when it signed Caesars as its first ever gambling partner at the beginning of this year, but the deal omitted any detail about sports betting – leaving it some way short of the pacts struck between MGM and the NBA, NHL, and most recently the MLB.
On the joint venture side, MGM’s partnership with GVC is also the most magnanimous; CEO Jim Murren described it as an “historic partnership”, that will “dominate the US sports betting market.”
It might. GVC is still Europe’s largest- listed online operator, owner of the ubiquitous bwin sportsbook brand, and now parent to UK omnichannel giant, Ladbrokes Coral – after its takeover this time last year. And crucially GVC is already flourishing in the US with various igaming brands already flush in New Jersey.
Their $200m ($100m a piece) agreement, which was this month rebranded as Roar Digital, is to be headed up by Matt Prevost, who spent four years as CMO at Coral, out of an office in New Jersey.
Similar deals have been struck by its rivals. While Eldorado has forged a formidable partnership with William Hill, its 20 US venues and $1.5bn annual revenues pale in comparison to MGM’s portfolio The latter took $7bn in the US alone last year, and has a customer base of some 27 million.
MGM’s casinos are also spreading across some of the most promising sports betting markets. Asides from 13 casinos in Nevada, it has several major venues in New Jersey. Its now gearing up to acquire Empire City in New York, where betting is widely expected to be legalised before the end of the year. And two of its most profitable casinos, in Massachusetts and Maryland, could also be taking bets this year, is lawmakers go that way.
This reach is only compounded by another deal struck last year with rival casino Boyd Gaming. Boyd’s estate brings Roar Digital’s total exposure to 15 states (and rising) and a US population of $90m.
Since partnering with GVC and Boyd, MGM has launched the PlayMGM app in Nevada, found a tribal ally in the United Auburn Indian Community, and appointed Sportradar as its exclusive supplier of US sports data.
MGM is now understood to be taking the fight to Massachusetts, where the president of its MGM Springfield resort, Mike Mathis, is apparently “very anxious” to start taking bets.
“That is something we plan on tackling with the legislature right after the first of the year and we’ve been doing some of the prep work for that,” Mattis said in a December statement. Coincidentally three bills are now on the table in the state.
Also this year, the group has announced a new restructuring initiative, MGM 2020, designed to cut the fat (potentially including 70,000 employees) over the next 24 months and boost earnings by $300m.
Commenting on the initiative analysts at Union Gaming said taking a “more defensive approach to the cost structure and streamline operations” is “particularly important” for MGM this year,“ given some of the economic uncertainty ahead.”
The brokerage upgraded the group’s ebitda for next year from $3.5bn to $3.6bn.