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MGM Resorts & GVC Holdings Increase Investment in BetMGM

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MGM Resorts International (MGM - Free Report) continues to focus on strengthening sports betting platform to drive growth. Roar Digital, LLC that operates as BetMGM — a joint venture between MGM Resorts and GVC Holdings — announced second round of investment. Following the news, shares of MGM Resorts gained nearly 1% yesterday.

This brings the total investment to $450 million. In the first round, both the companies have invested $200 million. Ever since its launch in 2018, the company has done extremely well and is on track to operate in 11 states by the end of 2020.

Adam Greenblatt, CEO of ROAR Digital, LLC said “With broad market access secured, our long-term technology foundations now firmly established, and a high performing team in place, this further unequivocal support from our two shareholders will ensure we can achieve leading market positions in this exciting industry that is growing even faster than our initial expectations.”

Sports and iGaming Betting: A Key Catalyst

BetMGM is likely to generate more than $130 million of revenues in 2020 primarily from iGaming in New Jersey on account of the COVID-19 impact. Due to increase in operations across the United States, the company anticipates sharp growth in the coming year. The company expects to achieve revenues of nearly $8.5 billion by 2025.

The company has secured market access to 19 states. It currently has operations in seven states and expects to launch in four more states by the end of 2020. In iGaming, the company holds nearly 18% market share in New Jersey. It also has gross gaming revenue growth of 210% year over year in second-quarter 2020. The US iGaming market is estimated to achieve revenues of nearly $6.9 billion by 2025.

MGM Resorts’ loyalty program — M life Rewards — has more than 34 million members, out of which nearly 18% are from states that are expected to go live on the BetMGM platform by the end of 2020.

In an effort to strengthen its foothold in the gaming industry, MGM Resorts is banking on sports betting at various locations following the legalization outside Nevada. Sports betting has been legalized in Delaware, Mississippi, New Jersey, New Mexico, West Virginia, Pennsylvania, Rhode Island, Montana, Indiana, Tennessee, Illinois and New Hampshire. Moreover, Connecticut, Kentucky, Michigan, Massachusetts, Maryland, Minnesota, Missouri, Kansas, Louisiana, Oklahoma, South Carolina, California, Oregon, Arizona and other states are likely to tread the same path in the coming months.

Shares of MGM Resorts have fallen 51% year to date, compared with the industry’s decline of 27.8%. MGM Resorts, which shares space with Wynn Resorts, Limited (WYNN - Free Report) , Las Vegas Sands Corp. (LVS - Free Report) and Boyd Gaming Corporation (BYD - Free Report) , carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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