DraftKings’ (NASDAQ:DKNG) following of Entain Plc (OTC:GMVHY) could live centered around getting the target’s technology capabilities, potentially putting MGM Resorts International (NYSE:MGM) on the lurch for its have sports wagering tech stack.
That idea is mentioned by RoundHill Investments co-founder Will Hershey, who notes that MGM may non live able-bodied to city block a deal for Entain’s sports wagering technology platform.
DraftKings power really live after Entain’s technology underpinning the BetMGM offering, which may return remote the reach of MGM’s blocking rights,” said Milton Snavely Hershey inward a Saturday note. “In such an outcome, DraftKings would position MGM in a hard office of needing a unexampled tech stack, which hypothetically could termination inward MGM making an acquisition of their own.”
Last week, DraftKings stunned the gaming industry, floating a $22.4 one million million hard currency and gillyflower bid for Entain. The butt confirmed receipt of that proposal and that, days earlier, it rejected a $20.5 1000000000 slant from the Boston-based sportsbook operator.
How MGM Fits Into the Equation
Entain and MGM are 50/50 partners on the BetMGM venture, which is at present the second-largest online sportsbook operator inward the US and the cover iGaming society inward terms of securities industry share.
BetMGM is supported past Entain infrastructure and technology, spell the marketing side is impelled past MGM and its enviable firebrand recognition, player database, and portfolio of land-based gaming venues. The casino hulk said it’s monitoring the DraftKings/Entain talks and that it’s willing to piece of work with those two parties to follow to an amicable resolution. But should DraftKings follow an all-out takeover of Entain, including the BetMGM stake, MGM clear states such a trade needs the operator’s approval.
MGM, itself a previous wooer for Entain, wants replete(p) hold of the BetMGM unit, and it may follow able to get under one's skin that without having to pogy out practically cash. Speculation is swirling that the gambling casino troupe could simply buy out Entain or pursue an initial public offering (IPO) of the online gaming enterprise.
If DraftKings is pursuing Entain for technology and to long pillow its international exposure, it may follow compelled to work on with MGM on a resolution for BetMGM. DraftKings hasn’t publically said if it’s pursuing Entain purely for its tech stack, or if BetMGM is indispensable to getting a business deal done.
Entain’s Other Assets
In increase to the BetMGM bet and its back-end capabilities, Entain brings much more to the table. For example, it’s unity of largest sports betting companies inward the UK and Europe past way of life of its Coral and Ladbrokes brands, among others. Additionally, it’s I of the largest operators in Commonwealth of Australia — a worthy sports betting securities industry that DraftKings lacks exposure to. It’s non in time clear how DraftKings plans to grip those businesses should it ultimately gain Entain.
“Entain’s other assets, which include U.K. brick-and-mortar betting shops (i.e., Ladbrokes Coral) and its non-U.S. online betting brands (i.e. bwin, SportingBet) up for grabs. It’s unclear if DraftKings has a tangible want for those assets, despite the attractive relation multiple, as they would potentially reduce DraftKings’ pure-play US ontogeny story,” said Roundhill’s Hershey.
There is some talk that if DraftKings is successful inward its pursual of Entain, the wooer testament auction sale sour the target’s UK betting shops inward a transaction similar to what Caesars Entertainment (NASDAQ:CZR) of late did with William Hill’s international assets. In fact, such a process would likely haul some of the same parties that kicked the tires on William Hill’s High Street shops.
Under UK law, DraftKings has until Oct. 19 to pass water a formal offering for Entain.