MGM and Ladbrokes Entering the US Sports Betting Market
According to available information, Nevada-based hospitality and entertainment company, MGM Resorts is on the verge of signing an agreement with GVC Holdings.
Under the provisions of the new deal, the two sides will create a joint venture in a bid to get a share of the emerging sports betting market in the United States. GVC Holdings is the parent company of two famous brands, Ladbrokes and Coral, and the former will be the one to ink a lucrative multi-million dollar with MGM.
An Ambitious Move
If the plans go through as expected, both companies will invest a total of $200 million ($100 million each) into the new venture. Media reports suggest the two sides will have an equal part in the new firm, while the entire arrangement would be based on a 25-year contract, while either side will have the option to buy out the other after 10 years.
Once the new deal is signed, GVC Holding will become the main provider of online gambling and sports betting services for MGM’s entire portfolio across the United States.
The British bookmaking brand wants to enter the US market as soon as possible. After the Supreme Court overturned the notorious PASPA act in May, sports betting has become a hot topic in the country, with many states working on their respective legislation, while some – such as New Jersey, Delaware, and Rhode Island – have already made sports betting legal.
But even before the court’s ruling, sportsbooks from the United Kingdom were present in the United States. William Hill and Paddy Power Betfair have already grabbed a significant market share in New Jersey and Nevada, where their activities were focused on sportsbooks and horse racing.
Paddy Power Betfair has 300 employees in the States and even owns a broadcasting channel. TVG used to broadcast live horse racing until live animal gambling was prohibited. A couple of months ago, the Brits bought the second-largest daily fantasy sports and sports betting provider in the United States, headquartered in New York City, Fan Duel.
William Hill has also been quite busy, opening its shops across Nevada and New Jersey, and steadily increasing its presence across the country.
The new venture by MGM and GVC will represent a tough competition for both Paddy Power Betfair and William Hill. But the market has plenty of potentials, especially since the estimates say the sports betting industry in the United States could bring more than $150 billion on an annual basis.
Founded in 1986 and based in Paradise, Nevada, MGM Resorts International is currently operating destination resorts in Las Vegas, Mississippi, Maryland, New Jersey, and Detroit, including Bellagio, MGM Grand, Mandalay Bay and The Mirage.
Based in Douglas, Isle of Man, GVC Holdings is a gambling and online gambling operator in B2C and B2B markets. GVC is present in different business segments, while the list of brands it owns includes Ladbrokes, Bwin, Sportingbet, PartyPoker, PartyCasino, Foxy Bingo, Foxy Casino, Gioco Digitale, CasinoClub.
GVC Holdings agreed to buy Ladbrokes Coral in December last year, while the acquisition was completed in March.