The UK owner of Ladbrokes and Coral has sealed a $200m (£152m) tie-up with the world’s biggest casino operator, catapulting it into the lucrative, newly liberalised US sports betting market.
On Monday, the FTSE-listed gambling group GVC Holdings confirmed the joint venture with MGM Resorts, giving both partners a foothold in what is forecast to grow into a multibillion-dollar sector.
MGM – best known for Las Vegas casinos such as the MGM Grand and the Bellagio – and GVC have agreed to inject an initial $100m each as part of a 50-50 joint venture focused on US sports betting.
It would make GVC the lead sports betting and online gambling services provider for all MGM’s casino and hotel properties in the US.
Importantly, the deal will allow GVC and MGM to work together to create gambling/betting ventures within newly sanctioned US states, delivering a range of land-based and digital gambling opportunities.
In May, the US supreme court overturned a federal law that banned gambling on American football, basketball, baseball and other sports in most US states.
That was an eagerly anticipated watershed for Britain’s bookmakers, who have been jockeying for position to gain a strong foothold in the US. They have the advantage of years of experience due to Europe’s more liberal approach to sports gambling, while the common language reduces barriers to entry.
Analysts have been scrutinising GVC’s movements, and those of its FTSE counterparts, Paddy Power Betfair and William Hill. Both used horse racing and sportsbook acquisition to sow the seeds of a solid base from Nevada to New Jersey, where sports betting was already permitted.
Paddy Power Betfair already has 300 US staff and owns the TVG television network, which shows live horse racing – betting on live animals was not banned under the previous legislation.
In May, it bought the US fantasy sports betting site FanDuel, which allows customers to bet on fantasy sports games based on professional American football, basketball, baseball and ice hockey.
The 1992 Professional and Amateur Sports Protection Act (Paspa) effectively outlawed sports betting nationwide, with the exception of a few states. The result was a thriving underground betting industry that accepts an estimated $150bn in illegal wagers every year, according to the American Gaming Association.
GVC, which also owns the Sportingbet brand and has grown rapidly through acquisitions including the purchase of Ladbrokes last year, had been evaluating opportunities to expand in the US since the supreme court decision.
Gambling employs more than 100,000 people in the UK and contributed £2.8bn to the public purse last year. But the industry was left reeling by the government’s decision earlier this year to slash the maximum stake on fixed-odds betting terminals from £100 to £2, and is seeking other opportunities to make money.
In the US, domestic operators have been bracing themselves for what has been billed as the biggest British invasion since the Beatles in the 1960s.
The supreme court ruling came despite opposition from the Trump administration, major sports leagues and religious groups. One research company estimated that as many as 32 US states would offer sports betting within five years.
Richard Thorp, the business development director at the US consultancy FSB, said: “If US operators want to beat back the Brits, it’s imperative that they move quickly and choose their suppliers wisely.
“The post-Paspa scene which US legislators set still has many unanswered questions – for one [whether] the advertising of gambling will be permitted.”