MGM Resorts announced earlier this week that its subsidiary, LeoVegas Group, has agreed to purchase the Tipico Group’s U.S. mobile sportsbook and digital casino platform which would appear to pave the way for a break from its mobile betting partner, Entain.
Let’s take a closer look at the overall process and how it might impact top-rated sportsbooks.
Platform Reboot
MGM Resorts purchased LeoVegas, a Swedish mobile gaming company and provider of iGaming and mobile sports betting services, for $600 million last year and that entity now has an agreement in place to acquire U.S. sportsbook and online casino technology platform provider Tipico U.S. The Malta-based company is said to be winding down its U.S. platforms in Colorado, Iowa, New Jersey, and Ohio.
“The acquisition of Tipico’s award-winning U.S. platform marks a significant milestone in the strategic development of MGM Resorts’ global digital gaming business, allowing us to operate a proprietary sports betting platform,” said Gary Fritz, president of MGM Resorts Interactive. “This acquisition gives us control of our entire technology ecosystem, and we are delighted to bring Tipico’s U.S. team, with their track record of developing high-quality product and pricing capabilities, into our business.”
Adrian Vella, CEO of Tipico U.S., released the following statement: “After an exciting journey of constant development, progress, and unwavering belief in creating an excellent product offering, today marks the start of a new interesting chapter. Tipico has proven in one of the most competitive markets in the world that we can build proprietary technological solutions, whilst running sophisticated lean operations. Our rise from a start-up to an award-winning platform makes me very proud and I want to thank all my team, who made this story possible.”
Joint Venture Breakup?
MGM Resorts and Entain, a global sports betting and gambling entity, have been 50/50 partners for six years in the joint venture known as BetMGM. The marriage is a blend of an iconic Las Vegas brand and a sophisticated technology company specializing in the mobile sports betting and iGaming sectors. MGM made an $11 billion offer to purchase Entain in January 2021 but the company rejected the bid, stating the valuation was too low.
This set a course for MGM to free itself from the shackles of its partnership with Entain and is likely the reason for the acquisitions of LeoVegas and now Tipico, a deal set to close later this year. The writing has been on the wall since the acquisition of LeoVegas but with news breaking that Tipico is MGM’s next conquest, the divorce of the partners in the BetMGM joint venture appears ever more apparent.
Jordan Bender, an analyst with JMP Securities, echoed those sentiments and believes BetMGM will ultimately be in complete control of MGM Resorts when it is all said and done.
“The route of acquiring U.S.-based technology, despite the plethora of European-based technology, highlights to us its interest to expand internationally, while keeping the data, code, knowledge, etc. for the evolving U.S. market, if and when it separates from Entain,” Bender wrote in a research note.
LeoVegas CEO Gustaf Hagman alluded to absorbing a portion of Tipico’s management and software engineers as part of the deal.
“Powering our strong brands with a competitive and innovative sports product will enable us to grow and strengthen our sportsbook offering in both new and existing markets. I look forward to welcoming the talented teams from Tipico’s U.S. business into the LeoVegas Group very soon,” stated Hagman.
