GVC is a UK-based betting group and they have just reached a deal with the massive MGM Resorts International company to expand in the US market in order to take advantage of the very long-anticipated liberalization of the overall gambling market in America. Essentially, the two conglomerates are forging a 50:50 joint venture—an equal partnership—in an effort “to create world-class sports betting and online gaming platform” in the United States.
As you might expect, shares of GVC—who, by the way, owns Ladbrokes—shot up nearly 7 percent early in the trading day before shaving a few points to rest at 5.02 percent higher than the start of the day. It reached an all-time high of £11.50.
Again, this joint venture formation comes after a landmark US Supreme Court decision—from earlier this year—which has changed legislation for sports betting in America. Of course, European gambling companies have long been global leaders in the sports betting industry and, more importantly, have been steadily building their presence (and power) in the US market for many years. Their hopes—and efforts—of a more open market has paid off.
As such, MGM and GVC confide they hope this deal will create “meaningful early mover advantages” as we approach the professional American football season (the National Football League, or “NFL”), even though they are still waiting for regulatory approvals.
GVC chief executive officer Kenny Alexander comments, “It’s two of the superpowers of gaming: both sides of the pond getting together.”
And each company is contributing $100 million in assets to see this joint venture through.
Peel Hunt analyst Ivor Jones comments that this venture could certainly be good for both parties. He says, “GVC has signed up for a joint venture with one of the largest gambling businesses in the US on an exclusive basis. If the joint venture works, then it will de-risk access to the US sports-betting market for both parties.”
MGM chief executive Jim Murren agrees, advising that this “historic partnership [is] positioned to become the instant leader in technology, market access, sports relationships, and brands.”