Posted on: June 24, 2024, 02:19h.
Last updated on: June 24, 2024, 02:19h.
MGM Resorts International (NYSE: MGM) announced that it is acquiring the US iGaming and sportsbook operations of Tipico Group.
Financial terms of the transaction weren’t revealed. The Las Vegas-based casino giant said its LeoVegas Group unit is the entity acquiring the aforementioned Tipico assets. MGM acquired LeoVegas in 2022 for more than $600 million.
This acquisition is the second major investment by LeoVegas, following the acquisition of game developer Push Gaming in 2023. The acquisition will allow LeoVegas to operate a purpose-built proprietary sportsbook across all international markets and brands, with the exception of those exclusive to the BetMGM JV, with a focus on a clean, fast consumer experience with top-class product, pricing and functionality,” according to a statement issued by MGM.
Under the terms of the deal, Tipico will wind down its US operations and some members of the targets domestic management, technology, and trading teams will join LeoVegas. The transaction is expected to close in the third quarter.
Tipico Acquisition Bolsters MGM Technology
Germany-based Tipico, which is owned by private equity firm CVC Capital, offers sports wagering in just four states — Colorado, Iowa, New Jersey, and Ohio.
The operator’s share in Iowa and New Jersey is small enough that in some years it’s been measured in hundreds of thousands of dollars. In Colorado and Ohio, Tipico found more success, but its revenue only exceeded $10 million in Ohio.
That is to say the decision to acquire Tipico isn’t as much about bolstering BetMGM’s market share as it is bringing more of the operator’s technology needs in-house. Entain, which owns half of BetMGM, has long represented the technology side of the joint venture.
“The acquisition of Tipico’s award winning U.S. platform marks a significant milestone in the strategic development of MGM Resorts’ global digital gaming business, allowing us to operate a proprietary sports betting platform,” said Gary Fritz, president of MGM Resorts International Interactive, “This acquisition gives us control of our entire technology ecosystem, and we are delighted to bring Tipico’s U.S. team, with their track record of developing high quality product and pricing capabilities, into our business.”
Long-Running Tipico Rumors Come to End
Tipico has long been the subject of mergers and acquisitions speculation. In June 2022, reports surfaced that privately held Fanatics was considering a purchase of the gaming company. That deal didn’t materialize.
In April, rumors serviced that Tipico’s US assets were for sale and MGM was evaluating an offer. It remains to be seen if CVC looks to sell the remainder of Tipico as there was speculation earlier this year that it was considering selling the gaming company in its entirety.
CVC has been the majority investor in Tipico for eight years. It’s rumored the private equity shop valued all of Tipico at $3.75 billion.
