“We’d have to come to some resolve,” said MGM Resorts CEO Bill Hornbuckle, referring to DraftKings’ bid for Entain. “We have 50 per cent [of BetMGM] now. I would like more. I would need more.”
In January this year MGM had its own US$11 billion (£8.07bn/€9.52bn) pitch for Entain summarily dismissed by the FTSE100 company – despite it representing a 22 per cent premium on the group’s shares.
At the time Entain Chairman Barry Gibson said the offer of 1,383 pence per share “significantly undervalued” the UK firm.
In striking similarity to Caesars Entertainment’s recent acquisition of William Hill, it’s believed that both MGM and DraftKings covet Entain’s proprietary software and online expertise.
And like the recent William Hill sale and subsequent asset stripping, it’s a dead cert that if Entain is acquired its 4,000-plus Ladbrokes and Coral high street betting shops will be sold off in a secondary sale.
The BetMGM stateside subsidiary–now the third biggest sportsbook in the US after FanDuel and DraftKings–has had a sterling H1 this year, generating net revenue of US$357 million (£262m/€309m) and handsomely ameliorating Covid-19 financial drag on traditional land-based casinos and gambling.
BetMGM’s revenue next year is expected to top US$1 billion (£734m/€865m).
Under the existing MGM-Entain agreement, any potential new owner of Entain must have the “permission” of the American partner to continue to operate the online joint venture.
“Any transaction whereby Entain or its affiliates would own a competing business in the US would require [our] consent,” MGM affirmed in an official statement last month.
If DraftKings buys Entain, MGM will certainly pursue a majority takeover of BetMGM, Hornbuckle has asserted.
“There’s a lot of ways to structure it,” said Hornbuckle. “The only thing that would be successful for us is if we got control of it and had a technology that we could proceed with.”
Meantime, his company has affirmed in a statement: “MGM’s priority is to ensure that BetMGM continues to capture the growing US online opportunity, realizing MGM’s vision of becoming a premier global gaming entertainment company.
“MGM believes that having control of the BetMGM joint venture is an important step towards achieving its strategic objectives.”