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MGM wants full control of BetMGM

MGM wants full control of BetMGM

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MGM Resorts International will seek to gain majority control of its online betting joint venture BetMGM from partner Entain if Entain agrees to a $22.4bn buyout offer from DraftKings, Bill Hornbuckle, MGM’s Chief Executive Officer, has gone on record as stating. BetMGM currently operates as a 50/50 joint venture between MGM and Entain, which is based in London. It represents a key strategic pillar for both companies as they seek to claim market share in the booming US online betting market. BetMGM recently passed DraftKings to become the second largest US online betting app by revenue share. But DraftKings is now seeking to buy all of Entain, whose technology is seen as industry-leading, offering a price that is more than its own entire market value. The bid follows an earlier unsuccessful attempt by MGM to buy all of Entain for $11bn that Entain rejected. Entain has not yet said whether its Board will recommend that shareholders accept DraftKings offer. Under UK takeover laws, DraftKings has until October 19th to formalise its takeover bid or walk away, and MGM has said that its joint venture agreement with Entain gives it the right to veto any tie-up between Entain and another company, at least in the North American market. Some believe that MGM is using the threat of veto as leverage to secure majority control of BetMGM and access to Entain’s technology. Speaking at G2E, Mr. Hornbuckle talked about a possible three-way arrangement between MGM, Entain, and DraftKings, although he also said: “The only thing that would be successful for us is if we got control of it and had a technology that we could proceed with.”