According to sources familiar with the matter, gambling and casino giant MGM Resorts is currently once again considering making an acquisition offer for the British gambling group Entain which owns some of the most popular gambling and sports betting brands on a global scale, such as Coral, Ladbrokes and Gala Bingo, by the end of 2023.
As reported by Casino Guardian, the US gambling operator originally approached Entain with a takeover bid in January 2021. However, the British gambling giant turned down the £8.1-billion offer at the time, saying that the price offered for its assets was too low.
Some market experts have previously shared an opinion that MGM Resorts is likely to consider making another bid to take over the British company after the UK Government publishes its much-awaited White Paper on the UK gambling sector. As a matter of fact, the long-delayed White Paper has been considered a potentially serious obstacle for the bidders, as they have been willing to finally learn its content because the implementation of new rules could have a massive impact on the valuations of gambling businesses that are based and operate in the UK. According to market experts, stricter regulatory measures on online gambling and measures aimed at tackling gambling addiction rates, for example, could result in a decline in gambling companies’ share prices.
Reportedly, the White Paper, which has already been delayed several times, could be released in the upcoming weeks, or as soon as March 2023.
Entain’s Acquisition Would Help MGM Resorts Establish Better Online Gambling Presence
Last week, some Deutsche Bank analysts published a note describing a deal between the two companies as a “fairly obvious combination”.
The previous acquisition offer made by MGM Resorts combined cash and shares. According to experts from Deutsche Bank, a new takeover offer with additional cash is likely to be supported by shareholders.
On the other hand, reports by the banking news hub CTFN have described the deal between Entain and MGM Reports as inevitable, with analysts suggesting that the US casino company was constantly considering an offer for Entain’s assets. Entain, previously known as GVC Holdings, is currently estimated at £8.9 billion, with the figure being larger by £800 million than the MGM Resorts’ initial proposal in 2021.
In 2018, the British gambling giant joined forces with MGM Resorts on the BetMGM joint venture, which currently offers online casino, sports betting and poker services in a few US states. The sports betting venture of the two companies, which is expected to publish its financial update in a few days, generated revenue of more than £1 billion in its last fiscal year.
After the US Supreme Court struck down the federal ban on sports betting in the country in 2018, the US has become a lucrative market for British gambling operators that have been seeking further expansion worldwide. Online gambling there is currently legal only in a number of states, including New Jersey.
A potential merger with Entain, which has years of experience in offering online gambling services to consumers, would make it much easier for MGM Resorts to start offering such services in its domestic market once online gambling is legalised by more states.
- Author
Olivia Cole
