Entain Spurns $11B MGM Resorts’ Takeover Bid
MGM Resorts says it is done trying to leverage a buyout of mobile betting partner Entain after making two multi-billion offers. The Las Vegas-based gaming giant said Entain rejected its latest offer of $11 billion in combined cash and shares to turn over its business operations to MGM. Last year, MGM offered $10 billion to take ownership of online gaming partner Entain and fully control their joint-venture, BetMGM.
Entain said the initial offer undervalued its operations. MGM responded with an offer that included shares and boosted the total value to $11 billion, but Entain likewise declined that offer. MGM officials hoped the lure of shares ownership would sway Entain officials.
Until recently, Entain operated as GVC Holdings but recently rebranded as Entain to emphasize its online and mobile gaming offerings. GVC reported a $77.4 million operating loss in the U.S. market during the third quarter of 2020, which was up from an anticipated $52 million loss.
Entain officials describe the firm as one of the world’s largest online and retail sports betting and gaming providers supported by its proprietary technology. In addition to sports betting, Entain entities offer online and mobile casino gaming, poker, and bingo. Entain also operates many well-known brands, including:
- Ladbrokes
- Foxy Bingo
- Coral
- Eurobet
Entain has gaming licenses in more than 20 nations located on five continents. In December 2020, the company changed its name from GVC Holdings to Entain. It ranks among the Financial Times Stock Exchange 100 top enterprises.
Las Vegas-based MGM Resorts jointly owns and operates BetMGM with Entain and is investing fully into expanding its market share of online and mobile gaming and sports betting. Eleven of the United States allows legal sports betting and online and mobile casino gaming, with most remaining states likely to do the same in the near future.
New Jersey has replaced Las Vegas as the nation’s top sports betting locale. BetMGM owns about a 22 percent share of online gaming and 10 percent of online sports betting in New Jersey, and about 17 percent market shares in other states. It currently operates in eight states and recently rolled out a new app that standardizes its mobile and online betting platforms in all states.
MGM plans to expand operations into a total of 20 states by the end of 2021 and is spending mightily to grab anticipated market shares. Combined BetMGM marketing efforts by MGM and Entain totaled between $150 million and $160 million for 2020, with an operating loss of about $145 on the joint effort.
To expand its betting operations, BetMGM announced several promotional deals with four NFL teams and an NHL franchise during the third quarter of 2020. Those new partnerships are with the:
- Detroit Lions
- Detroit Red Wings
- Denver Broncos
- Tennessee Titans
- Las Vegas Raiders
BetMGM also inked a cross-promotional deal with Yahoo Sports that enables members of both platforms to use a single account and wallet for transactions. The Yahoo Sportsbook in New Jersey redirects customers to BetMGM to create an account that they can use on both platforms.
Yahoo Sports reports 64 million unique visitors every month. The partnership with BetMGM enables more crossover potential as BetMGM becomes operational in more states. MGM also plans to integrate the BetMGM app at its nine Las Vegas casinos to encourage visitors to download the app and place bets remotely.
MGM properties account for about 45 percent of total rooms on the Las Vegas Strip and host about 7 million visitors during non-pandemic years. Visitors who download the BetMGM app and return to markets into which MGM is expanding will have an obvious incentive to continue using the BetMGM app.