BetMGM will remain a joint venture between MGM Resorts and Entain for the foreseeable future, MGM CEO Bill Hornbuckle said.
Hornbuckle made the comments on MGM’s fourth-quarter earnings call Wednesday afternoon, saying it was “time to be definitive” about Entain. MGM offered $11 billion for the international online gambling company and was rejected in early 2021, and had kicked around the idea of another offer to take full control of BetMGM.
Entain investors reacted poorly to the news. Shares fell 14% to close at £13.48 in London Thursday on more than triple its average trading volume. Meanwhile, MGM opened 7% higher than its Wednesday close on the report.
Full statement on BetMGM/Entain
Hornbuckle leaned into the recent acquisition of LeoVegas as another reason why an acquisition of Entain no longer makes sense for MGM.
I’ll just step in and kind of give the first part of it because I think it’s time to be definitive and give a little direction. The simple answer on Entain is no, we’ve moved on. While we remain highly focused on BetMGM’s business through our partnership with Entain and making sure that, that business continues to grow, we see great potential in LeoVegas expansion capabilities.
I’ve said before, we like their technology platform and their leadership team. We’re also interested in the content studio business, we think there’s a real play there. We’ve seen that proven effective with brand when we combine great product in our brands at BetMGM. And over time, we like the live dealer business and the expansion of other global markets and frankly, and directly under our own purview.
Hornbuckle also said the brand is the leader in “what is financially the most important segment in the nation: iGaming.”
BetMGM expects profitability in the second half. Entain CEO Jette Nygaard-Andersen said an IPO for BetMGM could be considered once the company turned profitable.
No significant investment in JV after 2023
Hornbuckle does not expect much additional investment into BetMGM after the $150 million split by both owners this year.
“It gives us every reason to believe it should hit its target this year, starting to make profitability in the second half of the year,” Hornbuckle said. “We all have to be rational players. There is growth left. There are six additional states yet to go that have been identified. But no, there’s no large-scale capital. That business should begin to mend and take care of itself.”
That said, there is always the chance BetMGM wants to bolster its sports betting offering through an acquisition, he said. An LSR request to identify the six states remains unanswered at this time.
BetMGM sending younger players to casinos
Expect more BetMGM players to visit Las Vegas this year, Hornbuckle said.
Customers that gamble in-person and online with MGM spend about 40% more than other gamblers, he said, with thousands of customers that have played both channels.
BetMGM is also bringing in a younger customer with 85% under 49 years old, he said.