MGM Resorts may have walked away from its $11 billion attempt to buy the U.K.’s Entain, but it’s unlikely to be the last attempt we see from land-based gaming giants seeking to secure a foothold in the online world.
The casino giant abandoned its attempt after Entain’s board rebuffed its offer for a second time. A merger would have provided MGM with sole control over their U.S. joint venture BetMGM, as well as other leading online brands, including Ladbrokes and Coral.
As the land-based casino world continues to struggle with Covid-19-mandated closures and social distancing rules, the online world appears to be going from strength to strength.
Entain this month reported net gaming revenue surged 41 percent in Q4 of last year, with momentum continuing into 2021. The U.S. is seen as one of the highlights, with BetMGM now having an 18 percent share of the market there and online revenues surging 130 percent.
The figures are certainly compelling and there is a strong rationale for tie ups between U.S. operators and Europe’s experienced online players keen to get a slice of the newly liberated American pie.
MGM wasn’t the first. Caesars Entertainment is buying William Hill for $3.72 billion. Shareholders in the U.K. company voted to approve the deal in November. While Flutter Entertainment, owner of PaddyPower, merged with The Stars Group last year.
But where does this leave Asia? For all the multiple billions of dollars that undoubtedly change hands in the region’s online gambling markets each year there is still a dearth of regulation.
And without it, we’re unlikely to see the kind of convergence that is happening between the European and U.S. operators and which will provide a diversified revenue stream to support land-based assets.
There are rumblings that cash-strapped governments may be more eager than they have been in the past to consider legislating and taxing. But so far only the Philippines has taken a step to make that happen.
"Manila has been more willing to embrace the potential for online gambling than its regional peers, but with mixed success."
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