During Wednesday’s Global Gaming Expo in Las Vegas, MGM Resorts International CEO Bill Hornbuckle downplayed speculation his company would be harmed by a takeover of BetMGM joint-venture partner Entain in a $22 billion offer by DraftKings. Instead, he insisted that MGM has a lot of power in any transaction.
Hornbuckle told the gaming industry audience that under the terms of its deal with Entain, DraftKings wouldn’t be able to operate in the U.S without MGM’s approval. And in an interview with Bloomberg published Wednesday, he said he sees a path for MGM to acquire Entain’s stake in BetMGM
When DraftKings’ bid was announced in September, MGM put out a statement hinting at its need to control BetMGM, a 50-50 partnership with Entain, a British gaming company that supplies the technology for the startup sports betting and igaming joint venture. Wall Street analysts seized on that as meaning MGM will want to control Entain’s 50% of the joint venture, unless it seeks to compete against DraftKings’ bid. MGM offered $11 billion for Entain in January in a bid that was rejected.
“I can tell you for sure that we have a great partnership with Entain and have gone from 8 percent to 25 percent market share in 18 months,” Hornbuckle said. “It’s not a cheap date. We’re entrenched in their technology, so we would love to own more of BetMGM and have the potential someday to go global. Will this relationship allow us to do it as currently constructed? Time will tell.”
Hornbuckle, who was scheduled to do a press conference Wednesday at G2E, but bowed out, told Bloomberg that he sees a path for his company to take full control of BetMGM. He said that if DraftKings reaches a deal to buy Entain, he’ll seek majority control of BetMGM and access to technology.
DraftKings has until Oct. 19 to present a formal offer to Entain under UK takeover rules, Hornbuckle told the G2E audience. In the Bloomberg interview, he said any agreement could involve BetMGM licensing some of the technology that powers the site from DraftKings.
“There are a lot of ways to structure it,” Hornbuckle told Bloomberg. “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.”
Hornbuckle added during his interview that licensing the technology isn’t a long-term solution and MGM would need to take over that skillset themselves.
As for how it will play out, Hornbuckle told the G2E audience, “This is really up to what DraftKings and Entain want to do. There’s a put-up or shut-up law come Oct. 19, and unless they get permission to extend their conversation, they have to come to an understanding or agreement and that’s two weeks away.”
Hornbuckle declined to speculate on whether that will happen, but called the whole situation complicated.
“DraftKings can’t be the owner of Entain and have other U.S. domestic offerings as DraftKings,” Hornbuckle said. “Something has to go. We have the opportunity to step in and say, in order to make that happen, and we would listen, this is what we would want to do.”
