Entain May Consider MGM Takeover Offer
According to recent rumours, New Jersey-based online sports betting company BetMGM has solid plans to expand its online presence across the global sports betting and gaming market. Part of these plans are alleged to concern one of the leading sports betting and online gaming providers, Entain plc, owner of some of the UK and Ireland’s favourite and most recognised bookmakers and casinos such as Ladbrokes, Coral, and Bwin.
Entain and BetMGM currently have a very successful partnership in the United Kingdom which started in 2018 through a 50/50 joint venture, with each company contributing $100 million to the partnership. The terms of the deal were that Entain would take care of the online sports betting and gaming side of the venture, while MGM would be responsible for physical casino locations. According to the rumours, now that the venture is due to reach the end of the five-year agreement period, MGM has developed a strong enough position to be considering taking the next step – namely, incorporating Entain altogether.
Such a deal would automatically make MGM one of the strongest players at the UK and Irish sports betting, casino, and gaming markets. While MGM’s US customers may not be too familiar with the brand Entain, they have certainly heard of some of the sports betting sites and online casino providers owned by it. In addition to Coral and Ladbrokes, who feature on our list of best bookmakers in Ireland, these include brands like Party Poker, Sportingbet, Crystalbet, Gala, and Foxy Games.
The Entain and BetMGM joint venture was very beneficial for both companies. Through the venture, Entain had access to BetMGM’s established customer based, and was able to provide its already well-polished online sports betting services to those willing to explore the world of digital betting and gaming. BetMGM meanwhile was able to take advantage of the vast experience and industry knowledge held by Entain, who currently own the oldest bookmaker in the UK and Ireland – Ladbrokes.
Throughout the period of the venture, the US sports betting and online gaming market saw a lot of changes and expanded rapidly. A number of states have now legalised online sports betting and many providers offer betting and gaming across various platforms and devices. Experts predict that by 2024 as many as 30 US states may join the list of those who offer licenced and regulating online gaming and betting.
With the expansion and success of the US online betting market, industry experts are of the opinion that MGM, who are already either the leading, or one of the leading casino providers in most states, would gain a lot from acquiring Entain’s US assets. Indeed, MGM must have reached the same conclusion, because they made a bid to acquire Entain in January 2021, offering $11bn for all company’s assets, including the ones outside of the US. While MGM has not specified what exactly they plan to do with the company’s international holdings, it is clear that a deal to acquire one of the leading European online betting and gaming providers holds a multitude of opportunities for the US giant. MGM could continue to operate the European assets, or another option would be for these to be sold to a local competitor such as William Hill or Flutter Entertainment. However, the offer was turned down by Entain, with the company stating that the price was too low.
A surprise followed several months later – one of MGM’s biggest rivals in the US, sports betting operator DraftKings, offered $22bn to acquire Entain. The bid was bound to fail due to a special clause in the joint venture between Entain and MGM, stipulating that MGM had the right to veto any potential partnership between Entain and other US betting or gaming providers. MGM stated its readiness to invoke the clause, however that was not required – Entain turned down the offer, stating that $22bn was also too low.
With the end of the venture in place however, rumour has it that MGM is putting a new, stronger proposal in place, which would reflect the company’s growth and development through the five years. There hasn’t been any information yet in terms of the potential amount to be offered, or any timescale, however it is expected that MGM would act prior to the end of the agreement in order to avoid the risk of rival companies making a surprise move similar to the one made by DraftKings.
Any potential acquisition of Entain would certainly be of interest to customers in Ireland who will expect to see a continuation of the high levels of customer service and satisfaction currently maintained by Entain, combined with its excellent features, promotions, and customer offers. We will follow the developments and report any relevant news here – please check back for more information.