Casino Giants Battle It Out With M&A Bids as Their Weapons

All spheres of the economy experience a fair share of mergers and acquisitions (M&A) as companies battle for the top position in their respective industries. The online gambling market seems to be in a constant M&A conversation. Cross-regional and intercontinental deals shrink the globe to the size of a board game, and some players have stronger ties with the banker.

Business deals from the last half-decade shaped the gambling industry into what we know it as today. One of the biggest fish in the gambling sea made a public announcement this week on their intent to gain a staple in the igaming market. MGM Resorts proposed a $607 million offer to take over LeoVegas.

With the massive growth recorded year on year in online gambling, many land-based casino giants hope to gain a more significant foothold in the digital gambling sector. MGM’s stunning offer confirms this.

 When Giants Come Together

LeoVegas AB is a reputable online platform provider with a handful of popular casino and sportsbook brands in its arsenal. Their operations span the globe from their base in Sweden to Canada, comprising of fan-favourite brands like Royal Panda and LeoVegas, to mention only a few.

MGM Resorts International own some of the most prestigious brands in prized locations around the world. Their list of venues on the Vegas Strip includes MGM Grand Las Vegas, Bellagio Las Vegas, and Excalibur Hotel and Casino.  

President and CEO of MGM Resorts commented on the offer to LeoVegas, saying:

“Our vision is to be the world’s premiere gaming entertainment company and this strategic opportunity with LeoVegas AB will allow us to continue to grow our reach throughout the world. We have achieved remarkable success with BetMGM in the United States and the acquisition of LeoVegas AB in Europe will expand our online gaming presence globally.”

With a unanimous recommendation to move ahead with the public offer, the board of directors at LeoVegas approved a sale price of $6.20 per share. For the gambling giants to wrap up the deal, certain customary closing conditions and regulatory approvals must come together. If 90% of LeoVegas shareholders agree, this deal represents one of the most significant agreements in gambling history.

 A Battle for the Throne

To reign in the igaming kingdom, companies with the buying power acquire smaller businesses to either aid their growth strategy or eliminate unwanted competition. While celebrating unprecedented success or recovering from lockdown closures, the list of land-based companies stacking their chips for breath-taking bids is extensive.

The NYSE listed gaming company IGT agreed to purchase the aggregation and software provider iSoftBet for €160 million earlier this year. This gives one more land-based provider a healthy advantage in the remote gambling industry. iSoftBet has a portfolio of 125 proprietary games and over 4,600 third-party titles.

 What’s Your Price?

Although many deals celebrate success, some fall through, and the Australian land-based behemoth, Aristocrat, left the bid table with its chips intact but a bruised ego. The Playtech bid-war played out publicly, and London-based Playtech Plc is still for the taking. Most recent discussions point toward an internal agreement which includes Mor Weizer, the company’s current CEO.

Although they have deep pockets and stake massive amounts, MGM Resorts also faced rejection. Its US-based partner, Entain, swiftly threw an £8.1 billion offer back in its face, proving that some companies are not for sale. Entain refused an offer from MGM’s biggest rival, DraftKings, for £16.2 billion.

The complex igaming industry poses a lucrative opportunity for land-based casino businesses, and those who get the timing wrong won’t get a seat at the high-stakes table.