MGM Resorts “content” with BetMGM after DraftKings’ Entain takeover falls through

MGM Resorts could have walked away with BetMGM and its proprietary technology had DraftKings completed a deal for its US joint venture partner Entain, according to MGM Resorts CEO Bill Hornbuckle. The operator watched with baited breath last month as DraftKings made a failed $22.4bn takeover attempt for Entain, which is currently a 50/50 JV partner in the BetMGM operation and the provider of most of its key technology. Speaking on the firm’s Q3 results call, Hornbuckle said: “We would not do eventually without technology. This is a technology-based enterprise at the end of the day, and so that becomes a key point of what to do and how we think about our future. “Given the environment that was being described, there was potentially an opportunity to walk away with technology and so that would’ve been interesting. “We were prepared to do it if in fact the other parties could get to the finish line,” Hornbuckle added. At the beginning of the year, MGM made its own £8.09bn bid for Entain which was rejected as it “significantly undervalued” the FTSE 100 business and its prospects, according to shareholders. Addressing MGM’s own discussions with Entain over a sale, Hornbuckle said: “There wasn’t all of the details worked out and only time will tell whether we ultimately ended up in a different place, but for now let’s go back to where we were.” Indeed, following failed takeover attempts from both MGM Resorts and DraftKings, the BetMGM status quo is set to continue for the foreseeable future with Entain and MGM Resorts still locked in a 50/50 JV. This may be no bad thing, as BetMGM is the current igaming market leader in the US. While Hornbuckle is happy with the brand’s performance to date, he told analysts he was not prepared to sit on his hands and eventually wants BetMGM to expand both nationally across the US and also globally as the land-based specialist gets to grips with providing online and digital gambling services. “We’re content and happy with our business, and how it’s progressing,” said Hornbuckle. “We wouldn’t do it without a technology platform to be sure, and right now I’m not anxious to do it. I like where we are as a developing business. “I like the fact that Entain shares half of the development costs. “It’s a progressive environment as we all know and I still like where we are, but we want to be bigger. We want to be global, we want to be a lot of things, and time will tell how we ultimately project that into the space,” Hornbuckle concluded. At a group level, MGM reported a consolidated net revenue increase of 140% year on year during Q3 to $2.7bn after benefitting from the removal of Covid-19 restrictions across its global resorts portfolio. Consolidated operational income increased to a positive $1.9bn, from a loss of $495m in Q3 2020, with a similar return to positivity in net income to $1.4bn. At a divisional level, MGM China was the big winner of Q3, posting a 517% year on year revenue increase to $289m. This was closely followed by MGM’s Las Vegas outfit, which experienced a 187% revenue rise during the quarter to $1.4bn. MGM’s regional operations also reported revenue growth during the quarter, increasing 66% year on year to $925m.