DraftKings’ bid for Entain not worrying MGM CEO
Bill Hornbuckle, CEO of MGM Resorts International, downplayed the suggestion his firm will be hurt by the acquisition by DraftKings of BetMGM’s joint venture partner Entain in an offer of $22 billion
At the Global Gaming Expo in Las Vegas on Wednesday, he maintained that in any deal MGM has a lot of influence.
Hornbuckle reminded the people in attendance that DraftKings could not operate in the US without the explicit permission of MGM under the terms of its contract with Entain, and he further stated in a Wednesday interview with Bloomberg that he saw the potential for MGM to purchase Entain’s BetMGM share.
In September, when the DraftKings’ offer was revealed, MGM issued a statement indicating the necessity of controlling BetMGM, a 50-50 collaboration with Entain and a UK gambling business that provides the technology for the start-up sports betting and igaming joint venture. Wall Street analysts took this as MGM wanting to control 50% of Entain’s joint venture without trying to compete with DraftKings.
In January, Entain rejected an MGM offer of $11 billion.
“I can tell you for sure that we have a great partnership with Entain and have gone from 8 percent to 25 percent market share in 18 months,” Hornbuckle said.
“It’s not a cheap date. We’re entrenched in their technology, so we would love to own more of BetMGM and have the potential someday to go global. Will this relationship allow us to do it as currently constructed? Time will tell.”
He told Bloomberg that he sees a way to seize complete control of BetMGM. This after he backed out of a press conference at G2E on Wednesday. Should the situation arise whereby DraftKings makes a deal for Entain, Hornbuckle said that he’ll work on controlling a majority of BetMGM and access to technology.
Hornbuckle told the G2E audience that it has until October 19 to submit to Entain a formal offer under UK regulations for takeover. In the interview with Bloomberg, he said any arrangement may include the licencing of some of the technologies used by BetMGM from DraftKings.
The MGM CEO told Bloomberg that “there are a lot of ways to structure it”.
“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.”
On the future, Hornbuckle said explained, “This is really up to what DraftKings and Entain want to do. There’s a put-up or shut-up law come Oct. 19, and unless they get permission to extend their conversation, they have to come to an understanding or agreement and that’s two weeks away.”
“DraftKings can’t be the owner of Entain and have other U.S. domestic offerings as DraftKings,” Hornbuckle said. “Something has to go. We have the opportunity to step in and say, in order to make that happen, and we would listen, this is what we would want to do.”
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