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MGM makes bid for Entain Plc: The latest in recent wave of transatlantic gambling mergers

On January 4, 2021 US casino giant MGM Resorts made an $11bn (GBP8.1bn) offer for British gaming company Entain (previously known as GVC), which owns Ladbrokes. Entain has a significant presence in the lucrative UK gambling industry and its acquisition would not only allow MGM to widen its presence in the UK market but would also drive its expansion into the online gambling sector.

MGM’s offer to acquire Entain comes as the casino and gaming industry faces strong headwinds from the COVID-19 pandemic. In July 2020, MGM Resorts International reported its financial results for the quarter ended June 30, 2020. Consolidated net revenues decreased 91% compared to the prior year quarter to $290m.

Many online gambling companies saw a boost during the COVID-19 lockdown and stay at home restrictions, prompting many casino owners to pivot their businesses towards online. Entain for instance has continued with a strong trading performance despite the impact of COVID-19, demonstrating the resilience of the highly diversified business model by product, brand, territory and channel.

The acquisition, if completed, would be the latest in a wave of consolidation which has taken place since the US Supreme Court struck down the federal ban in 2018, opening up a hugely lucrative industry. In the two years following the US Supreme Court’s decision, nearly 75% of US states have either legalized sports wagering or introduced legislation to do so, which has created new opportunities for gambling companies around the globe, with Entain already cashing in on this opportunity.

Other major players have also made significant acquisitions in recent years. On 2 October 2019, Flutter Entertainment announced its acquisition of Canadian gaming operator The Stars Group for $6.95bn, creating the world’s largest online gambling company based on revenues, due to its ownership of popular brands including PokerStars, Full Tilt Poker, BetStars, and Fox Bet.