MGM Resorts (NYSE:MGM) scored a triple play after partnering with Major League Baseball (MLB) to be the sport's official gaming partner. Along with pro basketball and hockey, MGM is now able to align itself with individual baseball teams to cross-promote its casinos and sports betting app. If it can get pro football on board, MGM will have hit a grand slam.
Holding all the cards
After the Supreme Court struck down as unconstitutional the Professional and Amateur Sports Protection Act of 1992, which barred states from authorizing sports gambling, eight states have begun accepting wagers. Besides Nevada, where sports betting has been legal for decades, New Jersey has the most fully formed system with sportsbooks accepting over a quarter billion dollars in bets in October, which is the most recent data available. That's half the $528 million Nevada took in, but is a 41% increase from the prior month.
As more states begin accepting wagers in the months ahead, we'll see Las Vegas' pre-eminent position erode further, and MGM Resorts' star will rise.
The casino operator is essentially looking to corner the market on sports betting. Beyond just lining up partnerships with three-quarters of the primary pro sport leagues, MGM also signed up with regional gaming powerhouse Boyd Gaming (NYSE:BYD), which has experience operating one of the largest sportsbooks in Vegas.
They have agreed to grant each other access to their respective properties to offer online and mobile gaming platforms, including sports betting, casino gaming, and poker wherever they have a license available for a physical casino or an online presence. That amounts to some 15 states between them, including some of the most lucrative markets in the nation.
The richest markets, franchises
MGM is the largest casino operator in the U.S., generating over $4 billion in revenue from just its Las Vegas resorts. But it also operates the Bellagio in Atlantic City and earlier this year purchased Empire Casino in New York, and that could result in significant advantages for it as it positions the gaming company in the midst of two massive sports markets, New York City and Philadelphia.
Benjamin Franklin once described New Jersey as a keg tapped at two ends, but that plays well when it comes to sports gambling as MGM's casinos can benefit from some of the biggest franchises in all of sports. Of course, the New York Yankees are arguably the richest prize in baseball, but the New York Mets and Philadelphia Phillies are valuable league assets as well, and being able to potentially partner with any of these teams could be a lucrative proposition.
In addition to MGM being able to promote its brands and gaming options across MLB's broadcast and digital platforms throughout the season, each baseball team plays 162 games a year, more than any other sport. Then there's the All-Star Game that MGM will have access to, as well as the World Series.
One more piece to the puzzle left
The National Football League finally agreed in August to allow teams to sell sponsorships to casinos that have relationships with sportsbooks, but the casinos are not permitted to promote the sportsbooks directly in their advertising.
Until last month, only the New York Giants and New York Jets played in a state with legalized betting (New Jersey), but Pennsylvania began accepting wagers in mid-November, bringing the Philadelphia Eagles and Pittsburgh Steelers into play. Football is the biggest game in town, with the sport attracting fully one-third of the $586 million in bets placed in New Jersey since sports wagering was legalized, followed by baseball with 26% of the bets.
Having corralled basketball, hockey, and baseball, coupled with its partnership with Boyd Gaming to cross-promote the sportsbooks and other properties across the country, MGM Resorts is poised to be the sports gambling champ.