MGM Resorts CEO, Bill Hornbuckle, has hinted at a potential buyout of BetMGM, currently co-owned and operated with Entain, dependent on the possibility of the latter’s acquisition by DraftKings.
As reported by Bloomberg, Hornbuckle made the comments whilst speaking at the Global Gaming Expo casino industry event and in a separate interview, highlighting ‘a lot of ways’ for a potential agreement between MGM, DraftKings and Entain to work.
Entain confirmed on 21 September that DraftKings had made a proposal for a $22.4 billion takeover of the FTSE100 betting firm, which has established a strong profile in the US via its ongoing partnership with MGM via the BetMGM subsidiary – which generated a net gaming revenue of $357 million in the first six months of 2021.
The terms of the collaboration between MGM and Entain stipulates that a potential new owner of the latter would not be able to operate BetMGM without the permission of its stateside partner.
A statement from MGM on 22 September noted that ‘any transaction whereby Entain or its affiliates would own a competing business in the US would require MGM’s consent’.
According to Hornbuckle, MGM will pursue a majority takeover of BetMGM in the event that DraftKings successfully purchases Entain, with the goal of accessing the unit’s technology.
“We’d have to come to some resolve,” the CEO remarked in an interview with Bloomberg. “We have 50% now. I would like more. I would need more.”
The outlet also added that Hornbuckle acknowledged the possibility of licencing BetMGM’s technology – such as sports betting odds – from DraftKings, whilst speaking at the aforementioned Global Gaming Expo.
“There’s a lot of ways to structure it,” he said. “The only thing that would be successful for us is if we got control of it and had a technology that we could proceed with.”
MGM had previously pursued its own attempted takeover of Entain in January of this year at a purchase price of $11 billion, representing a 22% premium on the Ladbrokes and Coral operator’s share price.
This offer was rejected by Entain, with group Chairman, Barry Gibson, stating that the 1,383 pence per share proposal ‘significantly undervalued’ the company.