January 4, 2021
US casino conglomerate MGM Resorts recently made a bid to purchase the owner of British bookmaking firm Ladbrokes in partnership with the IAC Group’s billionaire tycoon Barry Diller. According to people familiar with the deal, Entain, which also owns Bwin and Partypoker, recently received a second offer after rejecting the first all-cash proposal worth $10 billion, which they had graciously rejected.
The move is the latest in a long line of mergers and acquisitions US gambling conglomerates have been making recently in the wake of the easing restrictions on online gambling in the States. While gambling remains a regulated activity in the country, a historic decision by the US Supreme Court removed the barriers previously set against online gambling.
IAC invested $1 billion in the MGM group earlier this year to boost the operator’s online gambling business. The firm is willing to finance MGM’s latest acquisition plans and might invest an additional $1 billion to aid the takeover. There is no official word on the deal from Entain’s end on whether the board plans to accept the new deal, which is expected to include both cash and stock.
Entain recently added David Satz to its Board of Directors to help the group assess its future in the US market. Satz is a former executive at Caesars Entertainment and is experienced in the US gaming regulatory environment.
Barry Diller built his own broadcasting empire after assisting Rupert Murdoch to launch the Fox Television Network. According to Diller’s assumptions made earlier in August, IAC’s experience could help MGM grow its online gaming business. IAC currently owns quite a few digital media brands including video streaming service Vimeo, home improvement site Angie’s List, and news site The Daily Beast.
IAC has also expanded its business beyond its horizons recently, acquiring countless businesses like travel portal Expedia, and more recently Match Group, the owner of popular dating apps OkCupid and Tinder.
While MGM declined to comment, Entain could not be reached. IAC sent out an email stating “we don’t comment on speculations and rumors”. MGM signed a $200 million contract with Entain in 2008 to pursue sports betting in the USA. The partners upped the ante last year by investing another $450 million in the joint venture called Roar Digital.
Under the current situation, BetMGM and Entain split the economics, but with iGaming and mobile sports wagering kicking off in the United States recently, brick-and-mortar companies are slowly looking at digital opportunities for higher profit margins. The deal follows closely in the heels of Caesars Entertainment’s planning to acquire its online casino and sports betting partner William Hill in the first quarter of 2021.
Entain’s share prices jumped 25% in the last year and if the rally continues, prospective buyers will have to pay a premium price for acquiring the British firm. It makes sense for MGM to want to acquire Entain as the latter is responsible for BetMGM’s entire technological support.
100% up to $ 100
Wagering - 1x