GVC Holdings, the UK owner of the Ladbrokes, Coral and Sportingbet brands has formally announced the establishment of an ambitious $200m joint venture with hotel and casino operator MGM Resorts. The new business will be split 50/50 between the two companies with each investing $100m to create what they hope will be the undisputed market leader in US sports betting and interactive gaming.
The JV, which is set to run for 25 years, will facilitate exclusive access to all US land-based and online sports betting, online real money and free-to-play casino gaming, major tournament and online poker and other similar future interactive business. Primarily, playMGM and partypoker will form the two main brands. MGM has also secured market access agreements with US casino entertainment firm Boyd Gaming, paving the way to new business in 15 states.
Yet to be formalised is the final make up of the governance team for the JV. The only details released so far confirm that there will be a four-person board of directors with two members from each of MGM and GVC who will have equal governance and decision making rights. They will head up an independent leadership team which will be headquartered in a major US technology hub.
Emphasising the highlights of the JV, the two firms said that it represents an opportunity to leverage each other’s unique and complementary assets to “capture a once-in-a-lifetime new market opportunity”. They added that it “…significantly increases speed to market for both parties and creates meaningful early mover advantages”.
During a conference call with media on Monday this week, it was revealed that both firms had been in talks about hatching a joint venture before the dismantling of PASPA by the Supreme Court of the US in May.
Speaking to the media, GVC CEO Kenny Alexander described the deal as the opportunity of a lifetime. He commented that any time the company goes into a market it tends to “grow dramatically”, adding that GVC is all about scale and diversification in regulated markets. “The US is going to be the biggest regulated market, no doubt,” he said. “If we’re not the market leaders we will have failed.”
On timing, GVC’s director of corporate development and strategy, Adam Greenblatt, said that the firm is already involved in licensing processes where possible and aims to be “first to market in every state”. He added that the company is already active in New Jersey and said that there would be “more good news in relation to New Jersey” in the coming weeks.
Stateside, Jim Murren, chief executive of MGM Resorts, welcomed the JV, telling press: “We are proud to join forces with GVC, the largest and most dynamic global online betting operator, with existing reputable and trusted operations in the US. With MGM Resorts’ expertise and leading position in key markets across the US, this historic partnership will be positioned to become the instant leader in technology, market access, sports relationships and brands. Together, we are creating a one-of-a-kind platform that we expect will dominate the US sports betting market.”