News that MGM and GVC are entering a new partnership dedicated to sports betting has sent the stocks of the latter well past their normal average. With the rapidly churning changes in the United States, this new joint-venture will offer a fresh take on sports betting, bringing more competition and overall influencing the sector in a distinct and important way.
A Look Under the Hood – the $200m Agreement
And so GVC Holdings managed to notch up respectable results on Monday when its share price went up following news that the company had just tied up a partnership with MGM Resorts International, a U.S. casino and hotel operator.
According to the official announcement issued as a press release, the company is preparing to move in with a fresh entity that will be worth $200 million. At least this is the initial funding the companies have agreed to.
The event will also open at a specific time, ahead of the American football season, which will allow the companies to benefit in full from the new start. However, they will only have to open their operations in States which have acted on the PASPA defeat in May.
Effectively, PASPA was the piece of legislation which made it illegal on a federal level for any state to adopt any form of sports betting or gambling, bar a few exceptions who have fought long and hard for the privilege.
Now that PASPA is done and dusted, all companies are lining up to apply for licenses and make sure they set foot in the new and vibrant, and potentially multi-billion-dollar market.
Bringing Sports Betting Online
The cornerstone of GVC and MGM strategy is to bring all of their activities online. The news has been reported by every major news outlet on both side of the Ocean as this is a first for a British company, after William Hill, to be undertaking such ambitious feats in the United States.
Bringing online betting may be trickier still, though, as the U.S. is still trying to elaborate a working network of land-based venues, which can take the influx of gamblers eager to make a wager. Bringing things online will be challenging from a legal standpoint, but the companies seem to be onto a good thing.
Beyond that, GVC and MGM know that focusing on one or two states would be pointless, and they are pushing for as many as 15 U.S. states instead, hoping to target a total of 90 million people, albeit not all of those people are gamers, naturally.
Meanwhile the top bras at both GVC and MGM have been rather effusive about the new partnership. GVC will be able to bring much of the technical solutions that MGM International Resorts will need to promote its brand and products.
The synergies between the two companies only seem poised to continue. The project will continue for a period of 25 years before any company may officially pull out of the deal. Alternatively, one of the parties can buy the other’s shares if need is.