Both MGM and Caesars Aggressively Expanding Through Sports Betting
MGM Resorts International plans to set up a legal sports betting and online gambling business and Caesars Entertainment Corp will start allowing sports bets at two casinos in New Jersey this month and in Mississippi next month, just two more giants joining in the business after a landmark Supreme Court decision in May to permit sports betting in the United States.
The SCOTUS decision has kick-started businesses on both sides of the Atlantic Ocean to race to either expand or launch their American operations with the expectation that they would get a piece of the multi-billion-dollar pie that is legal sports betting.
The SCOTUS Decision
On May 14, 2018, the United States Supreme Court struck down the 1992 federal ban on sports betting, which had effectively prohibited sports betting outside of Nevada. The Professional and Amateur Sports Betting Protection Act made it illegal for a state to “sponsor, operate, advertise, promote, license, or authorize by law” any sports betting. Nevada was exempt, along with three other states, Oregon, Delaware, and Montana, which had already enacted sports lotteries. Those states were allowed to continue.
The 6-3 ruling was a huge victory for states that want to legalize and regulate sports betting, both in-house and online. Many casinos and racetracks that have been given the green light by their respective state legislature have chosen to work with operators of online gambling sites or betting shops in Europe.
On the flip side, the NFL, NBA, ad NCAA all backed the federal ban.
MGM Resorts International
MGM Resorts International announced Monday via a press release with The Wall Street Journal that it would partner with the British gambling company GVC Holdings PVC in a 50-50 joint project that would give them the advantage of getting to market quicker and with fewer risks than doing it alone. Each company will spend $100 million on the project and will each have their own separate headquarters in a major tech hub city. The joint venture will create a leading sports betting and interactive gaming platform in the U.S.
UK gambling companies have experience in legal sports betting, since it is legal in the United Kingdom, and has been for almost 60 years. The United States can learn a lot from legalization in the UK, and this merger is one way to go about it. They plan to take advantage of the opportunities presented by the SCOTUS decision, and what better time to do so than right before football season? The Chicago Bears and Baltimore Ravens preseason Hall of Fame Game is scheduled for this Thursday, August 2.
Analysts are praising UK companies as a good way to learn about the legalization of sports betting in the United States, and they’re saying that the MGM-GVC Holdings PVC project is fantastic. According to Berenberg analyst Roberta Ciaccia in an article on MarketWatch:
“This looks like the most comprehensive and solid deal we have seen so far relating to U.S. sports betting.”
Ciacca went on to say,
“We consider this to be a strong positive catalyst for GVC. This is clearly the ‘big and bold’ deal that GVC had intimated,”
referring to a promise made in May by GVC’s CEO Kenny Alexander that his company had plans to move aggressively in the American market. Combine the power of the MGM brand, a larger profit pool, and any losses from initial operating costs would probably be covered by future market-share gains. The MGM has a customer base of about 27 million people.
MGM International is an American global entertainment and hospitality company with destination resorts in Detroit, Las Vegas, Mississippi, New Jersey, and Maryland. The company started in 1987 as MGM Grand, Inc. and became MGM Mirage in 2000 after it bought Mirage Resorts. In the mid-2000s, the company shifted focus to developing and building real estate in the gaming and leisure industry. The company changed its name to MGM Resorts International in 2010 in order to better reflect its strategy of expanding globally. The company is known for its inclusion and diversity initiatives. Over 38 percent of the company’s management are minorities and almost 43 percent are women.
GVC Holdings PLC
GVC is a huge player in the gambling market in the United Kingdom, where legal sports betting is well-established. The company has brands such as Sportingbet, Ladbrokers, and bwin. GVC also owns the Partypoker brand. GVC has four business segments: sports labels, games labels, B2B; and non-core assets. Listed on the London Stock Exchange and a constituent of the FTSE 100 Index, GVC was founded in Luxembourg in 2004 as Gaming VC Holdings and was reorganized in 2010 as GVC Holdings. In 2012, William Hill and GVC bought Sportingbet. William Hill took the Spanish and Australian holdings while GVC took the rest of the world. The final acquisition by GVC of Ladbrokes Coral was completed in March 2018, in a deal worth up to £4 billion (about $5.25 billion US). The Group has headquarters in the Isle of Man and employs over 2,800 people across North and South America, Asia, and Europe.
Caesars Entertainment Corp
Sports wagers will be taken at two of Caesars’ casinos in New Jersey this week and will launch in Mississippi in August, jumping into the competition for sports betting business. The two casinos in New Jersey that will launch the undertaking for Caesars are Harrah’s and Bally’s in Atlantic City. They will open sports books on Tuesday and Wednesday. The Horseshoe Tunica and Harrah’s Gulf Coast resorts in the state of Mississippi will follow along in mid-August. Caesars will also start taking legal sports bets on mobile devices throughout New Jersey and from inside casinos in Mississippi very soon. Caesars plans to use tech provided by Scientific Games Corp, a casino supplier.
Caesars is an American gaming corporation based out of Paradise, Nevada. The company owns and runs over 50 hotels and casinos, and many golf courses. It started October 29, 1937, when Bill Harrah opened a small bingo parlor in Reno. He expanded, eventually forming Harrah’s Inc. in 1971. Harrah’s was bought in 1980 by Holiday Inns, which was purchased by The Promus Companies, which renamed its gaming hotel business Harrah’s Entertainment. Harrah’s acquired Caesars Entertainment, Inc. in 2005. A planned name change to Caesars Entertainment Corp was made official at the end of November, 2010.
Final Words on MGM and Caesars Sports Betting Moves
Two longtime players in Nevada are quickly maneuvering into sports betting throughout the country. I expect this aggressive foray into sports betting to continue as states legalize and roll out their sports betting regulations and platforms. There are already rumors and whispers of Caesars preparing for sports betting in Michigan once the state approves sports betting most likely in 2019. With West Virginia next in line to have legal sports betting in their casinos, I expect more jockeying and positioning from Caesars, MGM, and other well-established gambling and gaming entities.
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