BetMGM is seeking another year to assume the reins of the nine Las Vegas retail sportsbook operations of MGM Resorts International.
In February, the Nevada Gaming Commission signed off on BetMGM, a joint venture between MGM and European-based Entain. BetMGM was initially licensed as a manufacturer and sports-information distributor and later registered as an information-technology provider. That license was thought to allow BetMGM “substantial involvement” in the race and sports operations at MRI properties, but concerns arose with regard to MRI’s role. Those led to BetMGM’s filing for additional licensing as a key employee, so it could be involved in the sports operations.
BetMGM, allowed to operate sportsbooks at nine MGM casinos in Las Vegas, had six months to complete the transition ahead of the start football season.
Scott Scherer, BetMGM’s private counsel, appeared in front of the Board to ask for more time. “Unfortunately it took a little longer to make that transition to BetMGM taking over as a key employee. We think we can learn a couple of things from the key-employee relationship. The biggest is whether it will allow us to do everything we need to do in compliance with all the regulations. The second is how the employees work together and third what kinds of issues do we need to anticipate during the transition to make it as seamless as possible for the customers.”
Scherer said it’s possible they’ll decide at the end of the process that being a key employee is all that they need to do and that they can be in full compliance with regulations. That could be a better option than the disruption that would be caused by transitioning to become the full operator of nine sportsbooks at the same time.
“We’re asking for a one-year extension, so if we ultimately make that transition, it will be a slow time period for the sports betting industry to minimize that disruption,” Scherer said.
Gaming Control Board Chair Mike Dreitzer said he appreciated the abundance of caution, due to the size of the undertaking and trying to ensure a minimum of disruptions. While he supported the waiver requested, he questioned whether one year was enough.
“Can you learn everything you need to within a year?” Dreitzer said. “That’s a good amount of time, but there’s a lot to know about whether you’ll make the final determination to take them over.”
Scherer said BetMGM has already been acting as a key employee for several months and an additional year will be enough.
Joshua Wyseman, director of licensing for BetMGM, said that so far, they’ve been learning about different division responsibilities between BetMGM and MRI staff and their expertise as a company and any future issues they have in taking over operations of the retail sportsbooks.
“I think the biggest issue is internal controls and making sure both companies are on the same page on how they’re going to work,” Scherer said. The most likely transition time would be after the 2026 NBA season next summer, since it’s a slower time of year for sportsbooks and the least disruptive.
“Doing nine properties in one day would be difficult and take a lot of planning,” Scherer said. “Hopefully, it won’t extend more than two days; the longer it takes, the more disruption to the customers.”
Board member George Assad said one year seems a reasonable request and during baseball season, sportsbook operations are slower.
Scherer said one of the issues to be resolved is how the trading will work. If BetMGM is the operator, MRI’s super trader isn’t needed.
“They’re working well together (now), and I don’t think that’s a significant headache. If that continues to be the case, it may be one of the factors against making the transition,” Scherer said.
When it comes to employees, Scherer said some longstanding MGM employees want to stay as MGM employees and not transition over to BetMGM.
“That’s one of the issues we have to consider before deciding whether the transition is worthwhile,” Scherer said. “We certainly don’t want to lose quality employees over that transition.”
The Nevada Gaming Commission will have final approval at its Aug. 21st meeting.
