The consolidation trend in sports gaming and casinos could be continuing, with the latest proposed deal one that could have implications for BetMGM, as its parent company might soon have a new controlling shareholder.
People Inc., a minority shareholder run by well-known media mogul Barry Diller, is proposing an $18 billion offer to take control of MGM Resorts International, the entity that runs MGM's sportsbook operations. That includes BetMGM, one of the top legal sports betting apps in the United States. If it comes to fruition, the deal would make People Inc. the controlling shareholder with ownership of just over 50.1% of MGM's equity.
People Inc. (formerly known as IAC) is offering to acquire all outstanding shares of MGM, aside from the 26.1% it already owns, for $48.30 per share in cash. The proposal would make MGM a private subsidiary of People Inc.
The offer is non-binding and a deal might not materialize, but MGM's board will review the proposal and consult with its financial and legal advisors on the proposal. Diller plans to recuse himself from board deliberations on the proposal.
"We believe that MGM's assets and businesses are not currently realizing their full potential in the public markets," Diller wrote in his June 1 letter to MGM Resorts' Board of Directors, "and that it will be difficult to correct this situation in MGM's current form as a public company."
The proposal to acquire control of MGM comes on the heels of Caesars Entertainment's $5.7 billion sale to Fertitta Entertainment, run by Houston Rockets owner Tilman Fertitta. That deal also includes the acquisition of $11.9 billion in debt, bringing the cost to just under $18 billion.
Acquiring Caesars would give Fertitta, the U.S. ambassador to Italy, roughly 60 casino resorts and gaming properties to add to his company's hospitality operations. Fertitta Entertainment includes Landry's restaurants, the Golden Nugget casino brand and entertainment venues among its holdings. The deal allows Caesars to entertain other offers until July 11.
Like the Caesars agreement, the People Inc. proposal is one of the biggest corporate moves in gaming this year, and it is an unusual approach for the entity known until recently as IAC. The company, an internet and media conglomerate that re-branded to People Inc. in April, has spent the past five years spinning off digital companies after acquiring and rebuilding them. It typically hasn't replaced those entities with new investments.
MGM Resorts operates 31 resorts in seven states, including the MGM Grand and Bellagio in Las Vegas, and in China. It is the largest casino company in the world in terms of revenue. Diller said he sees growth opportunities on the digital side amid the many changes in the online betting space in recent years.
BetMGM is competing with huge betting apps like FanDuel and DraftKings, and the proliferation of prediction markets like Kalshi and Polymarket also has muddied the picture. FanDuel and DraftKings command the sports betting space, combining for a reported 68% of market share, while BetMGM is at around 14%.
