As per Entain Plc’s recent quarterly reports, forecasted amounts are in line with the results. However, if there is one thing that may capture the eye of stakeholders, it will be the sudden 90% boost in the net gaming revenue (NGR) of BetMGM.
The sports betting unit generated $400 million in revenue in three months which could spark another acquisition bid again for MGM Resorts International. However, there are still some problems that need to be addressed before any deal can go through.
Why Would MGM Make Another Call?
Aside from the massive boost in gaming revenue, there are more reasons why the hospitality and entertainment giant would want to wholly-acquire BetMGM. One of these was its dominance in the US sports betting market. BetMGM holds a 23% market share in the states it operates, which includes the highly competitive New York gambling market.
Additionally, Co-founder of RoundHill Investments, Will Hershey stated that BetMGM was the “crown jewel” for MGM resorts and emphasized that the popular and one of the most trusted US casinos may have another shot at acquiring the company.
Can MGM Do it Now?
While acquiring BetMGM is something that can be prioritized by MGM resorts, there are several issues to address before making it possible. In his statement, Hershey does not state a time frame for the acquisition bid and recognized that the current status of the market does not favor large-scale mergers and acquisitions.
Additionally, it seems that the UK-based company is asking for a higher bid as it rejects the Las Vegas-based casino operator’s 11.06 billion bid last January 2021. MGM may bid while the US dollar is strong compared to the British pound and its largest shareholder, Barry Diller’s IAC/InterActiveCorp, could provide additional support. However, it may still not be enough.
More capital may be needed to fulfill the British gaming company’s valuation and creditors are unlikely to provide funds to gambling companies due to rough market conditions.
Lastly, even though MGM is one of the biggest player rs in the US gambling industry, it may be hard to convince a company that is also on a mission in expanding its market.