GVC and MGM confirm joint venture


    GVC and MGM confirm joint venture

    As part of a 50/50 agreement, both GVC and MGM will initially each pour 100 million US dollars into the cooperation. In the next step, both companies are planning to put together a project team of employees and additional new hires. In addition, a four-person board of directors - that is, an equal 2: 2 management - will be established as the central control point. According to the stock market giants, the joint venture should start its business as early as the start of the NFL season at the beginning of September. In addition, they are currently looking for a separate location - this will probably be in a "significant US technology center". After the US-wide sports betting ban was lifted by the Supreme Court last May, Ladbrokes and Bwin parent GVC is particularly hoping to tap into the potentially multi-billion dollar new overseas market. GVC CEO Kenneth Alexander, therefore, welcomes the cooperation as a “really exciting opportunity” for players and shareholders alike, he also explains:
    MGM Resorts is a leading global entertainment company and enjoys the highest level of trust in the gaming space, with strong brand and management qualities and high sports connectivity. In the USA in particular, it is a real opportunity for GVC to work with a partner who has such a pedigree and knowledge.
    On the other hand, the Las Vegas-based casino hotel chain MGM - the second largest in the world, behind Ceasars, wants to benefit from GVC's experience in the sports betting sector and from the Isle Of Man company's strong brand portfolio. In addition to Ladbrokes Coral and Bwin, Sportingbet and the online poker room PartyPoker are among the spearheads of the London Stock Exchange company.

    PartyPoker US comeback?

    To guarantee both gambling groups “full access to their interactive shops” apart from the joint sports betting program, the brands playMGM and PartyPoker are to be integrated into the joint venture offers. At this point, James Murren, CEO of MGM Resorts, emphasizes the “enormous potential” of the partnership - one will immediately be a leader in terms of technology, market access, sports relationships, and brands, the trade press quotes the managing director, who finally sums it up:
    We look forward to benefiting from GVC's [...] technology, expertise in digital customer acquisition and experience in adapting to new operating environments. GVC is unusually well qualified because of its existing business operations for the United States. Together we are creating a unique platform that we expect will dominate the US sports betting market.
    For the online poker room PartyPoker, which was founded in 1997, the integration on the platform would also mean a surprising US comeback: The industry pioneer based in Gibraltar has been for over 12 years - that is, since the Unlawful Internet Gambling Enforcement Act of 2006 ( PDF), a general online ban on betting and poker - no longer be active on the other side of the pond. PartyPoker, like 888 Poker, had withdrawn from the US market as a result of legislation.

    MGM: double big deal

    The arrival of GVCs in the US market was greeted with a five percent growth rate on the London Stock Exchange. In contrast, the Wall Street company MGM can only post an increase of 0.16 percent, but can also look forward to the conclusion of another mega-deal: To expand its mobile gaming offer within the USA, the billionaire company has a market access agreement with Boyd Gaming hit. The respective US licenses of both contractual partners can consequently be claimed twice, i.e. by both companies. In plain language: MGM has access to BG markets such as Louisiana, Iowa, and Indians, for which BG can, in turn, establish itself in MGM territories such as New York, New Jersey, and Mississippi. Henceforth, both companies will be active in a total of 15 US states and an estimated 90 million potential customers will be available.

    Goldrush mood overseas

    With all the optimism of the two CEOs - the competition in the gaming business is known to never sleep, especially not about a supposedly 60 to 150 billion US dollar market, as Bloomberg estimates it is called. As a result of the verdict, sports betting regulation is still the responsibility of the judiciary in the individual states, but legalization has unleashed a real race between European sports betting providers within the last few months. The youngest members of the US-wide American Gaming Association (AGA) include GVC, the successful Irish-English bookmaker Paddy Power Betfair and the Canadian Pokerstars and SkyBet owner The Stars Group. Meanwhile, sports betting king Bet365 caught attention early last June when a lobbying company from New York City was exposed to claims - according to insiders, the global industry leader is paying around 18,000 US dollars a month to influence the legalization debate in New York state in its favor. In the meantime, however, MGM itself can be found in the US headlines in a way that is immensely more negative - completely apart from all big deals: As recently became known, the owner of the Mandalay Bay Resort and Casino is currently suing over 1000 victims of the massacre on the Las Vegas Strip, in which 58 people were shot dead from the MGM hotel last October. With the class action lawsuit, MGM is trying to take preventive action against alleged claims for damages, for which the resort operator not only attracts the indignation of the victims and relatives but also reaps sharp criticism from the media and the population.

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