The consolidation of the sports betting and gambling sector isn’t exactly news. It has been going for a fair while now, and a fair estimation of the developments would be that companies have finally realized the boons of bringing their business portfolios closer together. The latest such move comes from two established gambling firms, GVC and MGM Resorts international.
Consolidation in Full Force
The two actors of the gambling community, to name GVC Holdings and MGM Resorts International (known for MGM Grand, Bellagio, and The Mirage) have decided to create a joint-venture, pooling their efforts into a bid to develop a company that can operate sports betting and iGaming activities within the boundaries of the United States.
Given the spate of regulatory changes coming down the pipeline, the consolidation is quite understandable indeed. With the markets soaring in value, the new company will seek to gain a firm and unshakeable foothold in the future gold mine.
The creation of the new entity will come at a most auspicious time, well ahead of the NFL’s new season.
Knowledge and Tech Savvy Combined
Both companies have something to bring to the table. MGM is a recognizable name in the gambling industry, having opened iconic properties all across the United States and built a solid portfolio with memorable assets.
Meanwhile, GVC will offer technological solutions and expertise as well as its own dedicated platform. Given the likelihood of all such activities taking off online, GVC’s know-how will be invaluable to the success of the venture.
If either company gets cold feet, though, there is likely to be an option, which will allow the other partner to buy up the remainder of the assets of the quitting party. Overall, both companies are committing for a period of at least 25 years, on paper in the very least.
GVC Drums Up the Benefits
GVC has been increasingly wordy about the perceived benefits of such an arrangement, hoping that the expanding market in the wake of the SCOTUS decision. Casino officials have been quite happy to share their two pence on the matter, too.
According to Kenneth Alexander, the current CEO of GVC, joining forces with MGM Resorts is a particularly clever strategy for his company. MGM is a known name with properties all across the world, which puts it in a unique position to be expanding in the U.S. They have brands and management of the highest quality, Alexander continued, which allow them to enter new markets easily.
Similar praise came from MGM Resorts own CEO Jim Murren who reiterated the position that MGM indeed possess the expertise to make big difference and drive inroads into new markets.
With other operators already on the market, including William Hill US, the new joint-venture between MGM and GVC will be a direct challenge to the established order. As states decided to let up their regulatory restrictions, the new entity will forge ahead, offering tempting betting and gambling options.
In order for the enterprise to take in full, though, both companies will have to commit significant resources, with the initial $200 million already on the table.