Industry commentators and analysts believe that Tipico US’ proprietary betting platform can be a great opportunity for BetMGM on the newly-regulated Brazilian market, while providing an additional safety net should MGM decide to part ways with Entain.
One M&A adviser told iGaming Business that the platform was a “phenomenal piece of equipment with no customers.”
They said that by establishing a database of players in the US MGM would be able to negotiate its exit from the Entain BetMGM Joint Venture without having to worry about the loss of technology.
MGM, earlier this week (24th June), announced that it will acquire Tipico’s US technology stack, as well as its trading teams located in Columbia, Europe, and the US. These assets will be used to enhance LeoVegas’ international betting offering.
Aaron Lee, a Macquarie US Equity Research equity research analyst told iGB that “[the deal] dramatically shortens LeoVegas’ timeline for gaining control of their tech stack compared with developing these capabilities internally and should help them have a good start in emerging markets like Brazil.”
Brazil’s Online Betting Regulations are due to be completed in July, and will launch in early 2025.
Bill Hornbuckle, CEO of MGM Resorts, spoke at JP Morgan Gaming, Lodging, Restaurant & Leisure Management Access Forum, in March, and expressed his wish to expand into Brazil as well as other LatAm countries.
He said: “We think that we are ready and positioned to take on new markets, such as Brazil, or other LatAm countries. We’re very excited about this.”
Macquarie’s Lee has a less optimistic view of the possibility that MGM will exit its BetMGM joint venture any time soon.
He said that both sides had consistently expressed their commitment to BetMGM and the JV, and that it would remain the vehicle of the US and Ontario.
Lee thinks MGM will eventually solve the problem of JV. He added that it was unlikely Entain would give up its technology. The Tipico agreement is therefore a means to ensure a full tech platform for BetMGM.
MGM’s bid of PS8.1bn for Entain was poorly received in 2021. Hornbuckle confirmed that he will not be making another offer.
A spokesperson for MGM declined to comment about whether or not the operator might consider launching an independent betting service in the US. They responded, “We’re exclusive to BetMGM here in the US.”
Migration off Kambi’s Platform
LeoVegas must switch to a new sportsbook. Kambi shares dropped 9% at the time the announcement was made.
When asked by iGB about the partnership with LeoVegas, Kambi referred to the agreement that was signed in June 2023.
A 25-June ABG Sundal Collier note stated that LeoVegas was likely to migrate over to the Tipico platform when its Kambi agreement ended. LeoVegas is expected to account for approximately 3% Kambi revenues.
The long-term profits of [Kambi] will probably take a blow. We do not exclude the possibility of MGM being a modular customer. For example, BetBuilder is an attractive product to a company that wants to build an in-house sportbook. Many big operators, according our research, have outsourced this product.
Hornbuckle’s ambitions for four-legged animals
Hornbuckle, at the JP Morgan Forum, said that the company was looking for a platform to run its sportsbook business as it was lacking “sports gambling and sports betting technologies”.
Hornbuckle praised the LeoVegas brand and technology at the time for its four-legged stool. Hornbuckle stated that he wanted to create a live casino in-house, and hinted at the fact that they were close to doing so. He also said LeoVegas was working on acquiring a platform for BetMGM to be used internationally.
MGM and Playtech announced their partnership on 20 June to offer live streaming casino games at two of the company’s Las Vegas Strip hotels. The two companies claimed that this unique service would give users the experience of a real casino.
In December, MGM CEO told iGB that he views online media as the new frontier for MGM.
We want to diversify our digital offerings through BetMGM. This includes both the domestic market and what we offer with LeoVegas, whether it’s Europe, Canada, or South America. “We think this is a great way to keep in touch with our customers all year round,” said he at the time.
MGM quietly assembled a team of top-tier executives, including interactive president Gary Fritz. Fritz previously served as the head of gaming at IAC, which created online dating site Match.com before spinning off its business in 2020. Fritz is in charge of the digital gaming growth strategy, which includes both organic growth as well as M&A.
James Brodie is the MGM international head of interactive gaming and leisure, and he was previously a director at Goldman Sachs.
Tipico is unlikely to be missed by US players, as it has failed in its attempts to capture a significant market share.
One industry expert told iGB that “Tipico has no relevance in the US.” CVC Capital Partners is the majority owner of Tipico, as well as other companies in its group. CVC Capital Partners previously owned a stake at William Hill.
The commentator asked: “Did it make Tipico’s gaming business more sustainable?” Has it made Tipico more IPO-able?”
Following MGM’s recent announcement, the jobs of several casino employees from Tipico are in danger. Claire Alexander, VP Casino for the company, wrote on LinkedIn: “Following the recent acquisition by MGM of Tipico, I have some fantastic casino staff that won’t stay on the market long!” If you would like more information, please contact us!
Joachim Baca, the group CEO of Tipico Group, said that the company had invested heavily in its proprietary platform for sports betting and gambling.
He concluded, “On behalf the Tipico Group , I want to thank our teams for their dedication, passion and innovation over the past years, which has made our US Sportsbook and Online Casino platform what it is today.”
