Lifting of a federal betting ban has urged the agreement.
Ladbrokes owner GVC agrees $200m joint venture with MGM Resorts
- GVC’s share price climbs 5% as it creates a US betting powerhouse with MGM Resorts
- The group recently joined the FTSE 100 following the takeover of Ladbrokes, and in mid-July reported strong revenue increases following the World Cup and recent spell of warm weather
- The shares remain a firm ‘hold’ for investors seeking a balance of growth and income
Sports betting and gaming group GVC today announced a joint venture with US hotels and entertainment giant MGM Resorts. The new company will focus on the sports betting and online gaming markets in the US, including casino and online poker. GVC and MGM will each provide $100m of initial funding and believe the joint venture would provide access to 15 states and a population of 90m people. The move follows the landmark decision by the US Supreme Court in May which removed a federal ban on betting in most states.
The deal is clearly a response to the court ruling and attempts to gain an early advantage by using the extensive and well-known brands and technology owned by GVC and MGM. The market reacted positively with GVC’s shares up 5% in early trading. They’ve already performed very well this year having joined the FTSE 100 following the takeover of Ladbrokes Coral. While the new joint venture is good news, the shares are no more than a ‘hold’ for investors seeking a balance of growth and income.
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