MGM Resorts International, by way of its LeoVegas Group subsidiary, has purchased the software and technology constituting the U.S. sportsbook and online-casino operations of Malta-based igaming and sports-betting operator Tipico Group. No purchase price was announced and the sale is expected to close in the third quarter of this year.
In a formal statement, MGM said, “The acquisition will allow LeoVegas to operate a purpose-built proprietary sportsbook across all international markets and brands, with the exception of those exclusive to the BetMGM JV.”
Certain members of Topic’s U.S., Colombian, and European managerial and trading staff will move over to MGM in the wake of the purchase, which now ends Tipico’s U.S. operations.
A statement by MGM Resorts International Interactive President Gary Fritz raised questions about the future of BetMGM. Fritz said, “The acquisition of Tipico’s U.S. platform marks a significant milestone in the strategic development of MGM Resorts’s global digital-gaming business, allowing us to operate a proprietary sports-betting platform.”
BetMGM, unlike Tipico, is co-owned by Entain. Continued Fritz, “This acquisition gives us control of our entire technology ecosystem.”
Chimed in LeoVegas CEO Gustav Hagman, “By controlling our own sportsbook technology, we ensure that we will deliver the world’s greatest igaming experience to customers across all our markets and brands. Powering our strong brands with a competitive and innovative sports product will enable us to grow and strengthen our sportsbook offering in both new and existing markets.”
Reaction from Wall Street was swift, but blasé. Deutsche Bank analyst Carlo Santarelli called the event “more symbolic than needle moving.” He elaborated, “It shows a continued commitment to MGM’s international digital strategy … though the acquisition does provide incremental sportsbook platform technology, which should provide some cost savings and incremental opportunities to drive revenue. Broadly, we do not view the transaction as being material near-term.”
Santarelli saw technology as providing the primary impulse for the deal. “With the transaction, MGM will control its entire technology ecosystem, while MGM will also maintain some domestic sports betting trading teams.” He added that the transaction advances MGM’s overseas capabilities “albeit modestly,” reducing the likelihood of another international acquisition of major scale.
The analyst didn’t see Tipico’s cessation of business as having a material impact on the OSB industry. He noted that it was operational in only four U.S. states (Iowa, Colorado, New Jersey, and Ohio). It was also operating an igaming platform in New Jersey.
Santarelli maintained a Buy rating on MGM stock, which was trading at $42 per share. His price target for the stock is $57 a share. MGM’s share price dropped sharply in early trading, but quickly returned to its $42 level.
