Bill Hornbuckle likes his cards. The MGM Resorts boss, born in Japan, brought up in Connecticut is relaxed about one of his biggest rivals muscling in on his turf, according to those that know him. He could be forgiven for letting the events of the last few days test his nerve, however.
DraftKings, America’s second-biggest sports gambling company, sprung a surprise last week by lodging a £16bn takeover bid for Entain, the British bookmaker with whom MGM has joined forces as momentum gathers behind the US sports betting market.
Some have speculated that MGM may be forced out of the joint venture by DraftKings. But sources close to the Las Vegas stalwart disagree. “MGM is never a seller,” says one deal insider. The Las Vegas firm was a buyer earlier this year, lodging its own £8bn bid for Entain in January. The British company rejected the approach.
Months on, the US gambling gold rush is still in full swing. In 2018, the Supreme Court repealed a ban on sports betting outside Nevada, the home of the Las Vegas strip. Since then, states have been free to legalise gambling, creating what will be the world’s biggest regulated betting market.
US casinos have looked to Britain for expertise in online gambling. For instance, Caesars Entertainment paid £2.9bn for William Hill and Bally’s Corporation will soon complete its £2bn acquisition of Gamesys, the FTSE 250 group behind Jackpotjoy and Virgin Games.
The prospect of Entain being swallowed by the Americans would leave the London stock market with only one bookmaker of scale: Flutter Entertainment, whose brands include Paddy Power, Betfair and Sky Bet.
But Flutter is looking beyond the UK with hopes for a stock market listing across the Atlantic of one its brands. Its boss Peter Jackson is focused on the opportunities stateside, with subsidiary FanDuel having established an early lead in the US sports betting market.
Like FanDuel, DraftKings is one of the new kids on the block. The brainchild of Jason Robins and two colleagues from business card maker VistaPrint, it started out in 2012 as a sports fantasy league website – considered a game of skill rather than gambling.
Though the business is valued at more than $20bn (£15bn), DraftKings is yet to turn a profit and is losing $3.5m per day.
By contrast, Entain generated £710m of operating cash flow last year. This geyser is the main draw for Robins, according to some.