MGM Resorts announced Monday that its subsidiary, LeoVegas Group, has entered into an agreement to acquire the product and technology platform comprising the U.S. sportsbook and online casino from Tipico Group Ltd.
The announcement comes roughly two months after reports surfaced on BetMGM.
Formed six years ago, BetMGM is a t venture between the entities. The acquisition of Tipico’s U.S. platform is the second major investment by LeoVegas, following the acquisition of game developer Push Gaming in 2023.
MGM completed a $600 million acquisition of LeoVegas, an iGaming-focused company, a year earlier.
“The acquisition of Tipico’s award-winning U.S. platform marks a significant milestone in the strategic development of MGM Resorts’ global digital gaming business, allowing us to operate a proprietary sports betting platform,” said Gary Fritz, president of MGM Resorts Interactive. “This acquisition gives us control of our entire technology ecosystem, and we are delighted to bring Tipico’s U.S. team, with their track record of developing high-quality product and pricing capabilities, into our business.”
The Future of BetMGM 3z3y2o
For months, rumors have run rampant about a potential divorce between the parties that own BetMGM, the third-ranked sportsbook nationwide by market share.
The rumors intensified last December when former Entain CEO Jette Nygaard-Andersen abruptly tendered her resignation. For his part, MGM Resorts CEO Bill Hornbuckle has lauded Entain interim CEO Stella David for her handling of the company since Nygaard-Andersen’s departure.
The two companies formed BetMGM in 2018 shortly after the U.S. Supreme Court’s historic PASPA decision. BetMGM, which is live in approximately two dozen U.S. states, has forged partnerships with many of the top North American professional sports leagues.
While MGM Resorts provides branding power with its recognizable imprimatur, Entain is responsible for supplying the JV with its sophisticated tech stack.
On a normal Saturday of sports, Entain’s platform handles about six times more interactions than Amazon does on Black Friday, Nygaard-Andersen previously told Sports Handle.
With Tipico entering the fold, MGM may gain some leverage over Entain if the companies return to the negotiating table.
Entain rejected MGM Resorts’ $11 billion acquisition bid in January 2021, arguing that the proposal substantially undervalued the company. Jordan Bender, an analyst with JMP Securities, wrote Monday that he believes the companies at some point will go their separate ways, leaving MGM Resorts with the BetMGM brand in the U.S.
“The route of acquiring U.S.-based technology, despite the plethora of European-based technology, highlights to us its interest to expand internationally, while keeping the data, code, knowledge, etc. for the evolving U.S. market, if and when it separates from Entain,” Bender wrote in a research note.
Winding Down U.S. Operations 6b1z27
Tipico will wind down its U.S. operations prior to the closing of the acquisition. As part of the transaction, LeoVegas will acquire certain parts of Tipico’s U.S.-facing management, technology and trading teams across the U.S., Colombia, and Europe, MGM said in a statement. Moelis & Company acted as an exclusive financial advisor to Tipico Group Ltd. on the transaction.
Tipico is currently live with online sports betting in four states: Ohio.
“After an exciting journey of constant development, progress, and unwavering belief in creating an excellent product offering, today marks the start of a new interesting chapter,” said Adrian Vella, CEO of Tipico U.S., in a statement. “Tipico has proven in one of the most competitive markets in the world that we can build proprietary technological solutions, whilst running sophisticated lean operations. Our rise from a start-up to an award-winning platform makes me very proud and I want to thank all my team, who made this story possible.”
The transaction, which is subject to regulatory and customary approvals, is expected to be completed in the third quarter of 2024. MGM Resorts ticked up 0.20, or 0.40%, on Monday to $42.17 a share.
