Roar Digital said Wednesday shareholders MGM Resorts International and GVC Holdings committed to a second round of investment in the sports betting and iGaming operation.
Following the initial commitment of $200 million in 2018, the Las Vegas-based casino operator and the United Kingdom betting giant have invested $450 million into Roar Digital, which operates the BetMGM wagering application.
Roar Digital now has more than $370 million of investable capital in an effort to compete in the expanding U.S. sports betting and iGaming markets.
“With broad market access secured, our long-term technology foundations now firmly established, and a high performing team in place, this further unequivocal support from our two shareholders will ensure we can achieve leading market positions in this industry that is growing even faster than our initial expectations,” Roar Digital CEO Adam Greenblatt said in a statement.
BetMGM is on track to generate over $130 million of net revenue this year, mostly from iGaming in New Jersey.
Deutsche Bank gaming analyst Carlo Santarelli told investors the deal “serves as another reminder of just how competitive the sports betting and iGaming arenas will be over the coming years.”
Due to the COVID-19 pandemic, sports are on hold for the most part and iGaming is limited primarily to New Jersey and Pennsylvania, which others, such as Michigan, waiting in the wings.
Santarelli said FanDuel and Draft Kings – two daily fantasy operators – have a “meaningful head start in the race for market share.” He said the companies have “critical partnerships’ in the future. He said a “customer acquisition spending spree” will take place once sports start back up.
The investment into ROAR Digital will help the company compete, he said.
“We believe the ability to spend to acquire and retain customers will be critical over both the near and the medium term, given the commoditization of the offering within the sports vertical,” Santarelli said.
ROAR is on track to operate in 11 states by the end of 2020 and has secured market access to 19 states that together reach approximately 50% of the U.S. population.
Roar has exclusive partnerships with Yahoo Sports and Buffalo Wild Wings. When sports return, the company will launch the BetMGM wagering engine to Yahoo’s 64 million monthly active users, including one of the largest fantasy sports player bases in the U.S.
“Our investment in Roar is a demonstration of our continued excitement about the unique benefit of offering unforgettable, premier entertainment experiences to millions of our loyal guests directly through BetMGM,” MGM Resorts acting CEO Bill Hornbuckle said in a statement. “We believe this competitive advantage places BetMGM at the forefront of the most dynamic growth opportunity in all of U.S. gaming and will ultimately deliver meaningful long-term value for our shareholders.”
Howard Stutz is the executive editor of CDC Gaming. He can be reached at hstutz@cdcgaming.com. Follow @howardstutz on Twitter.
