MGM Resorts (NYSE: MGM) is already the biggest casino operator in the U.S., generating over $4 billion in revenue just from its Las Vegas casinos compared to $1.2 billion for Las Vegas Sands and $1.3 billion for Wynn Resorts, but now it wants to extend that domination nationwide by investing in sportsbetting.
While MGM previously said it would focus on renovating its existing properties, the Supreme Court's decision to strike down the federal ban on sports betting awoke the gaming giant to new possibilities ahead. The company quickly bought Empire City Casino's horse racing track and casino in Yonkers, N.Y., just north of New York City, because the metropolitan area is sure to be a large sports betting center.
Then, in rapid succession, MGM signed three more deals focusing on sports betting in the U.S., showing an intent to dominate the space.
MGM's not going it alone
First, MGM partnered with GVC Holdings, Britain's largest bookmaker, in a 50-50 joint venture that will have access to all of the casino operators' properties in the U.S., both at physical locations and online. Each company will seed the venture with $100 million, and though not in the official announcement, it is thought to be a 25-year agreement with an option after 10 years for either partner to buy out the other.
Then, MGM immediately joined forces with regional casino powerhouse Boyd Gaming (NYSE:BYD) to grant one another access to their respective properties to offer online and mobile gaming platforms, including sports betting, casino gaming, and poker wherever the two operate a physical casino and an online license is available. Boyd had one of the largest sportsbooks in Nevada prior to sports betting's legalization and this agreement will give them a shared presence in 15 states.
Finally, MGM signed a multiyear agreement with the National Basketball Association making the casino operator the first-ever sanctioned sportsbook of the league. Although terms were not disclosed, the three-year agreement is rumored to be worth $25 million and involve real-time data sharing that would give MGM the right to use NBA team logos while also having MGM's various resorts promoted across the league's digital assets, according to Bloomberg sources.
These deals serve to extend MGM Resorts' existing leadership position in Las Vegas into sports betting and give it a competitive edge because of its substantial geographic diversification. It's now able to widen that lens even further, which has the casino operator setting itself up to be the biggest game in town.
If you're looking for a winning bet in sports gambling, MGM Resorts is one that could payoff handsomely.