MGM Prepared to Do Anything to Acquire Entain

By John Isaac,
Editor at online-gambling.com

John Isaac Editor at online-gambling.com

John Isaac is an editor with many years of experience in the gambling industry. He writes expert articles on card games like blackjack and poker. In addition, he is also well aware of the US gambling laws and the Indian and Dutch gambling markets. You can rely on verified information and insightful details.

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Last updated: December 3, 2022

The rumor mill continues to spin about MGM Resorts International reconsidering a takeover bid of Entain Plc. There are renewed speculations that the casino giant may seek to acquire the entirety of the Ladbrokes owner or try to acquire the remaining 50% of BetMGM it doesn’t own. MGM and Entain each own half of BetMGM, and the former has long stated that it would like to control the entire property. It is important to mention that BetMGM is the leading iGaming operator in the United States.

BetMGM is also the second-largest online sportsbook company and is on the verge of profitability. This highlights MGM’s desire to gain complete control of the internet gaming entity. The OSGA (Offshore Gaming Association), citing an unnamed source close to MGM, mentioned that MGM almost instantly regretted BetMGM’s 50/50 structure. This is something MGM has not been shy to admit.

MGM made attempts to buy Entain outright in January 2021 for more than $11 billion. However, the offer was rejected as insufficient. The problem for MGM or any other Entain suitor is that DraftKings offered above $22 billion for the Coral owner in late 2021. But the talks fell through.

Some Other Challenges with Acquiring Entain Completely

If MGM intends to make another offer for Entain, it will almost certainly need to offer an amount that is more than double the initial amount it offered in January 2021. In the present macroeconomic environment, accessing financing as much as that at a rate that is favorable is tricky. Additionally, Entain has been on its own acquisition binge, adding heft that may isolate it from purchase. Lastly, the company’s CEO says the company is more buyer than seller, implying that it may take an extremely high offer to bring the company to the bargaining table.

Furthermore, there has long been speculation about what MGM may do to the European and Australian assets of Entain if it is able to complete a takeover of the target. The recent acquisition of LeoVegas by the casino giant indicates a willingness to expand in Europe, potentially opening the door to expanding its footprint on that continent.

An Outright Takeover of Entain Is One That May Make Sense

While acquiring the 50 percent of BetMGM it does not own would be more cost-effective, MGM would undoubtedly pay up for that privilege, especially given the unit’s growing attractive economics. Will Hershey, the co-founder of Roundhill Investments, stated in the weekly email update of the firm that MGM bidding for the entirety of Entain is the most likely outcome for two reasons.

According to Will Hershey, the first reason is that MGM has indicated its interest in online gaming outside of the United States through its acquisition of LeoVegas earlier in the year. The second reason is that investors now favor near-term profitability over long-term top-line growth. This means that an acquisition of Entain’s entire asset portfolio would be more appealing for MGM this time round. This deal would also include its profit-making UK and European operations