According to CBRE Research Director John DeCree, MGM Resorts International is advancing its digital strategy in acquiring the U.S. product and technology platform of Tipico Group: MGM is positioning itself to be the controlling shareholder of its currently 50/50 BetMGM joint venture with Entain.
DeCree said acquiring Tipico’s U.S.-facing management, tech, and trading teams “solidifies the fourth pillar of MGM’s digital strategy, giving it a proprietary online sportsbook and filling a key void in its current digital offering.”
MGM, by way of its LeoVegas Group subsidiary, acquired the U.S. operations of the Malta-based igaming and sports-betting operator in a deal expected to close in the third quarter. No purchase price was disclosed.
“The control afforded by the Tipico online sports betting tech stack is crucial for scaling MGM/LeoVegas across multiple jurisdictions,” DeCree said. “The Tipico tech can be deployed internationally, where the BetMGM joint venture doesn’t have exclusivity.”
As part of the transaction, Tipico will shut down its U.S. operations, currently live in four states. Tipico also has an icasino platform and a player account management (PAM) system, enhancing LeoVegas’s existing tech.
DeCree said MGM’s first pillar, a scalable cloud-based technology, was achieved in November 2022 with the LeoVegas acquisition, along with a strong digital business team. The second pillar, content, was completed in September 2023 with the acquisition of Push Gaming, providing games to over 200 operators globally. The third pillar, live casino content, was secured through a partnership with Playtech last week. This partnership will offer live casino content, branded as MGM Live, streaming from Bellagio and MGM Grand in Las Vegas, DeCree said.
“It will be initially in international regulated markets like the UK and Mexico, although it could eventually expand to the U.S.,” DeCree said. “Initial game launches are expected to be baccarat and roulette, but could eventually include unique experiences, like celebrity-hosted trivia and branded TV game shows.”
Since acquiring LeoVegas in 2022, MGM management has been deliberate in their digital strategy, aiming for a self-sustaining business with content, live dealer, a scalable platform, and now a proprietary online sports betting tech stack, DeCree said.
“While public markets have largely preferred the top two U.S. online sports betting and igaming operators (DraftKings and FanDuel,) MGM’s progress is noteworthy. The acquisition of sub-scale online sports betting platforms in the U.S. has generally been unsuccessful so far. However, MGM is currently focused on international markets and perhaps amassing the necessary utilities and experience to one day leverage in the U.S.”
Currently, DeCree said the BetMGM joint venture with Entain is heavily investing to achieve product parity with U.S. online sports betting and igaming leaders.
“Initially, Entain brought the technology expertise, while MGM provided the brand, market access, and database,” DeCree said. “However, with its growing digital prowess, MGM could be positioning itself to one day be the controlling shareholder of the BetMGM joint venture. While a BetMGM transaction in the U.S. is probably not imminent, the joint-venture structure has a finite lifespan in our view.”
MGM/LeoVegas’s plans in Brazil are of note, DeCree said. Licensing is underway in Brazil with regulated online betting and icasino expected to go live in the four quarter.
“A local partner will likely be necessary to compete in Brazil, but given the regulatory rollout disruption, there could be an opportunity for a new entrant like BetMGM to gain market share in this exciting growth market,” DeCree said.
