MGM and GVC have announced a new joint venture to take advantage of the opportunities provided by the expansion of state regulated online sports betting in the US. Poker comes along with the deal.
The new business will be a 50/50 joint venture with each company contributing assets on an exclusive basis. The business will primarily use the playMGM and PartyPoker brands and extend for a period of 25 years.
Each company will seed the business with $100 million of capital as the basis for their activities in US sports betting and interactive gaming.
There will be a four person board of directors with equal “governance and decision making rights, and an independent leadership team will be selected “from best-in-class talent from each company and additional new hires.”
The new business will locate in an as yet to be decided “major U.S. technology hub.”
Joint venture deal highlights
The deal presentation sets out the joint venture highlights as:
- Opportunity to leverage each company’s unique and complementary assets to capture a once-in-a-lifetime new market opportunity
- Creates a leading platform with world class content, state-of-the-art proprietary technology, and broad reach and distribution
- Significantly increases speed to market for both parties and creates meaningful early mover advantages
- Lowers execution risk due to strong existing relationship, complementary capabilities, and both companies’ track records of successful partnerships
- Complete alignment of interests with a 50/50 joint venture structure
Ample liquidity with total upfront capital commitments from partners of $200 million
MGM’s new deal with Boyd Gaming is part of the venture
Monday morning also saw the announcement of a deal between MGM and Boyd Gaming.
Under the deal with Boyd, MGM Resorts and Boyd Gaming will each have the opportunity to offer “online and mobile gaming platforms – including sports betting, casino gaming and poker – in jurisdictions where either Boyd Gaming or MGM Resorts operate physical casino resorts and online licenses are available.”
MGM Chairman and CEO Jim Murren commented:
“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.”
Gaming President and CEO Keith Smith chipped in with:
“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.”
The Boyd MGM deal PR did not mention the separate deal with GVC, but tucked in the joint venture presentation slides, one of the assets that MGM lists that it is bringing to the deal is its agreement with Boyd Gaming.
Boyd AND MGM get GVC into 15 state markets
MGM on its own may be the largest US casino operator, but it is only present in Nevada, Michigan, Maryland, Mississippi and New Jersey with two more casinos opening in New York and Massachusetts.
The deal with Boyd expands the list of states where the joint venture will partner to 15:
- Nevada (MGM & Boyd)
- Maryland (MGM)
- Massachusetts (MGM – upon opening of MGM Springfield)
- Michigan (MGM)
- Mississippi (MGM & Boyd)
- New York (MGM – pending closure of Empire City purchase)
- Illinois (Boyd – MGM pending sale of Grand Victoria)
- Indiana (Boyd)
- Iowa (Boyd)
- Kansas (Boyd)
- Louisiana (Boyd)
- Pennsylvania (Boyd – pending closure of purchase of Valley Forge)
- Ohio (Boyd – pending closure of purchase from Pinnacle)
- Missouri (Boyd – pending closure of purchase from Pinnacle)
- New Jersey – (MGM)
Mississippi will soon have state regulated sports betting, at least at land-based casinos, and New York has semi-legalized sports betting which means it’s allowed at the four licensed commercial casinos.
New York isn’t likely to get to it this year, mid-term elections have disrupted the legislative timetable, but it is still one of the states most likely to legalize online poker.
The deal adds impetus to lobbying for online poker
Putting all of this together makes for a heady mix of ambition and capability that MGM, GVC and Boyd are bringing to the US online gaming space.
As more states find that sports betting generates valuable tax revenues for their cash-strapped budgets, the idea that sports betting is legal but online poker is not may begin to seem even more anomalous.
Online poker’s re-emergence as a legal state regulated pastime in the US has taken a long time, and there’s a long way to go before it will be as ubiquitous as it once was.
The deal that MGM and GVC have put together is a very bright spot for the future of legal US online gambling. As more land based casinos get into the online space, the lobbying pressure to allow online poker will only get stronger.