MGM Resorts Attempts to Buy BetMGM Partner Entain: $11 Billion Offer

MGM Takeover Attempt of Entain

The news has recently come out that MGM Resorts International has attempted a financial takeover of Entain, formally and better known as GVC Holdings, with a bid of $11 billion. This is significant for a multitude of reasons, but the biggest being that Entain is the other 50% stakeholder in MGM Resorts’ online sportsbook, casino, and poker platform, BetMGM.

As of Wednesday, Entain has shrugged off the bid saying that the $11 billion undervalues the company and its assets. MGM has already begun work on what it can do to up its bid in another attempt at buying out the gambling giant.

Entain does not just own a stake in BetMGM; it is a massive gambling and gaming enterprise. It owns major labels like Ladbrokes, bwin, Sportingbet, Betbook, VistaBet, and has several game labels like partypoker. The company saw an operating income of over $640 million in 2019, and that income likely went significantly higher in 2020.

Why MGM is Making This Move

MGM is starting to see the future of betting, and that is seemingly online. Statistics coming out of Illinois, New Jersey, and other states all point to online sports betting being the future, pandemic or not. While it can be argued that the numbers are inflated since so many people are locked inside their homes, most numbers suggest that 90%+ of future sports bets will be taking place digitally in states that offer both in-person and online betting.

MGM clearly wants to get as big of a piece of the pie as it can in this online gambling marketplace. Taking over Entain would not only then give the company full access to the revenue made by the American giant that is BetMGM but also give them access to tons of smaller sportsbooks that Entain is currently in control of.

MGM wants to invest in online betting, and the logical first step would be to acquire a partner like Entain and build off the many assets and projects that it has worked on both with and without MGM Resorts International’s help.

Will a Deal Get Done?

While at first glance it seems that Entain barley entertained the offer by MGM Resorts International, I do believe that a deal will get done by MGM. It is clear that if the gambling giant is willing to fork over $11 billion and take on all the assets of Entain, that it will not stop working until it finds a deal that works for both itself and Entain. It just makes too much sense for MGM to gain full ownership of BetMGM and also acquire smaller books like bwin.

It is unclear how much the numbers need to move, but it sounds like MGM is focused on the language of the current deal before it sweetens the pot when it comes to cash. This will be a deal to look out for as it will surely shift and change the balance of American and worldwide online betting in the future. For now, the news of even an attempt to buy and the news of Governor Cuomo supporting New York mobile betting has risen MGM’s stock quite significantly through Wednesday’s market operating hours.