One of the biggest casino and sportsbook operators in the US, MGM Resorts International, is on the verge of completing a deal it sees as a game-changer. MGM wants to buy out Entain Plc to completely control the jointly-led BetMGM sports betting operator, and is now free to make another bid.
Back in January, MGM made its first bid to buy out Entain by offering a little over $11 billion to take complete control of BetMGM. But, the deal was cast away as the British bookmaker considered it inadequate. After this, MGM made it clear that it wouldn’t consider bidding higher, and from that point on, the company was unable to bid for six months per UK law.
While the potential new bid is just a rumor and MGM hasn’t made an official statement on this topic, it is easy to see why it wants more control. Results have just come in and they show that BetMGM is a fast-growing operator in its region.
BetMGM 2021 Revenues
Official reports state that BetMGM has had a fantastic year so far. The total revenue made by this operator in the first quarter of 2021 was $163 million. Compared to the 2020 Q1 revenue, that is an increase of a whopping 430%. The reason why BetMGM was able to record such massive growth is due to its structure and effective approach towards customer engagement, but also thanks to relentless marketing.
BetMGM is responsible for around half of the revenues that MGM makes, but that is likely to change if they end up purchasing Entain.
MGM Will Have to Offer More
The initial offer by BetMGM to purchase Entain’s part of the company was around $11 billion, but that was back in January. Since then, Entain’s share price has risen a lot and, a week ago, it closed at $25.05. Whatever the decision is, it will be interesting to see how MGM will deal with this purchase.
After all, MGM is not quite familiar with how the Australian and European markets operate. At the moment, MGM’s liquidity is a little less than $10 billion and that means that the deal between these two parties could have a solid cash component. However, with less experience in certain markets, the acquisition is also a larger gamble.
With the rise of the iGaming industry in North America, it is not hard to conclude how MGM managed to grow in such a short period and be able to be a part of deals of this magnitude. Speaking of the rise of the iGaming industry, it is worth noting that, according to the CFRA, the North American iGaming industry is likely to reach $42 billion this year. That’s why many experts consider 2021 to be the perfect time to launch an online casino in the US.