MGM Going Hard to the Hole on Online Gaming, Sports Betting
In the early years of online gambling lobbying/advocacy in the United States, MGM Resorts International was one of the gaming companies that, by and large, was in favor of legalizing internet gambling. With the Borgata in Atlantic City, it definitely has a presence now that online gaming is legalized in New Jersey. But this week, MGM demonstrated that it is all in on the future of internet gambling with a trio of significant announcements.
The first disclosure came on Monday, July 30th, when MGM announced that it has entered into a 50-50 joint venture with GVC Holdings PLC to create a sports betting and online gaming offering. It will cover the gamut: real money and play money casino gaming and poker, online sports betting, land-based sports betting, and whatever else MGM and GVC may develop later on.
The two companies have already worked together in New Jersey, as partypoker, a brand owned by GVC, powers Borgata’s online poker room and casino. GVC also owns the Gala, Sportingbet, Ladbrokes, and bwin brands, to name a few.
“MGM Resorts is a world leading entertainment business and the most trusted name in gaming, with the highest quality brands and management, and strong sports connectivity,” said Kenneth Alexander, Chief Executive Office of GVC, in a press release. “This combined with GVC’s technology and experience in successfully building online gaming businesses across multiple markets presents a truly exciting opportunity for U.S. players and our respective shareholders. To be able to team up with a partner with such pedigree and knowledge, particularly in the U.S., is a real opportunity for GVC.”
About Those “Multiple Markets”
Along with the GVC deal, MGM also announced an “unprecedented partnership” with competitor Boyd Gaming. In the agreement, the gaming companies will share access to online gambling markets where one has a brick-and-mortar casino and the other doesn’t.
“We are excited to team yet again with Boyd Gaming on this unprecedented partnership, which allows us to fully engage with the almost 30 million M life Rewards members throughout the country,” said MGM Resorts Chairman & CEO Jim Murren in a statement. “We look forward to expanding our entertainment options for guests beyond their visits to our land-based resorts.”
As Murren mentioned, MGM and Boyd are partnering “yet again.” The two have worked together before, each owning half of the Borgata until MGM bought out Boyd’s share in 2016.
Both companies have land-based casinos in Nevada and Mississippi. While some of the other locations are dependent on the closing of corporate acquisitions and casino openings, MGM has properties in five states that Boyd does not, including New Jersey, while Boyd has casinos in eight states that MGM does not. MGM tends to have the grander properties (pun intended), while Boyd has typically served as a more regional gaming company. It appears that as long as internet gaming licenses are available in the various jurisdictions, each company will allow the other to piggyback on its presence in a state to offer online poker, casino games, and sports betting.
“Our industry is evolving, providing opportunities for growth through new forms of gaming like online and mobile gaming,” said Boyd Gaming President and CEO Keith Smith in the same press release. “Thanks to our partnership with MGM Resorts, Boyd Gaming will have the opportunity to potentially add an online presence in five additional states, positioning us for significant future growth as our respective companies take a leadership role in our industry’s evolution.”
Embraced by Professional Sports
And then, on Tuesday, MGM dropped perhaps the biggest bomb of the week, announcing that it has become the official gaming partner of the NBA and WNBA. This is a significant departure from historical norms, as professional sports have tried to stay as far away from gambling as possible, at least publicly. Now the NBA and WNBA have an official gambling partner.
The part about it being the NBA specifically isn’t all that surprising, though, as NBA Commissioner Adam Silver has for years been a proponent of legalized sports betting, even as his league and others fought against New Jersey’s efforts to launch a sports betting industry. The U.S. Supreme Court’s overturning of PASPA in May has opened the door for every state to regulate sports gambling if they so choose and though only a few have so far, several more are seriously looking into it.
Silver’s attitude was essentially that people like to bet on sports and it is has been regulated successfully in Europe, so let’s get proper controls in place and let people do it, since it increases interest in the games.
ESPN reports that the deal is for three years “at least” $25 million. The NBA, PGA Tour, and MLB have tried to convince state legislators to add an “integrity fee” in any sports betting legislation so that the leagues can get a cut of the revenue the casinos bring in, but these fees are horrible deals for sports books, so the leagues haven’t made much headway on that front. This deal with MGM is a way for the NBA to still get something from sports betting.
In exchange, MGM will get the rights to use highlights from the league and league logos where it sees fit and, perhaps most importantly, be able to receive official statistical data straight from the league. The NBA and WNBA will promote MGM across various platforms.
Silver admits that the financial part of the agreement essentially replaces an integrity fee. In a news conference, he said, “….we decided here, rather than sort of re-litigating the integrity fee, which is still being hotly discussed state by state, let’s find an approach which is unique to us and where we both feel that we’re being fairly treated.”
Murren expressed his excitement for the deal, saying, “The foremost mission is to maintain and preserve the integrity of the game, the fan experience for the NBA fans, [and] in fact help catapult further the global presence of the NBA. As a global entertainment company, I feel MGM has an opportunity to partner with the NBA to do that.”