MGM Resorts International’s top executive said the gaming company has, at least for now, “moved on” from its pursuit to acquire Entain.
After months of speculation that MGM would again look to purchase its partner on the BetMGM joint venture in the United States, CEO Bill Hornbuckle told analysts during the company’s quarterly earnings call on Wednesday (February 8) that the company was refocusing its efforts elsewhere.
“I think it's time to be definitive and give a little direction,” Hornbuckle said. “The simple answer on Entain is no, we've moved on.”
Hornbuckle said part of the decision was based on MGM's confidence in its recent acquisition of LeoVegas. MGM made an initial $11bn offer for Entain in January 2021, which was rejected by the London-listed online gambling giant.
“While we remain highly focused on BetMGM’s business through our partnership with Entain, and making sure that that business continues to grow, we see great potential in LeoVegas expansion capabilities,” he said.
“I've said before, we like their technology platform and their leadership team.”
“For now, the answer is no, not with Entain,” Hornbuckle added. “We're going to go down our own direction, and we’ve begun to allocate capital.
“We value the relationship with Entain, and we value BetMGM,” he continued. “But as it comes to rest of the world, we're going to move forward with a different proposition.”
Speculation regarding a second offer by MGM heightened after Entain CEO Jette Nygaard-Andersen said on a recent earnings call that the company did not expect to invest additional capital into BetMGM once the joint venture becomes profitable.
But Hornbuckle said that MGM does not expect to invest additional capital into BetMGM either.
“If BetMGM gets into the M&A business for some particular product, maybe, but, generally, no,” Hornbuckle said, adding that MGM’s existing capital contributions give the company “every reason to believe [BetMGM] should hit its target this year of starting to make profitability in the second half of the year.”
“We all have to be rational players,” he added. “There is growth left, there are six additional states yet to go that have been identified. But no, there's no large-scale capital, that business should begin to take care of itself.”
Hornbuckle added that in terms of potential acquisitions, the company was looking into content studio businesses.
“We think there's a real play there,” he said. “We've seen that proven effective with brand when combining great product and our brands at BetMGM, and over time, we like the live dealer business and expansion of other global markets, and frankly and directly under our own purview.”
“When you talk studio business, or even live dealer, the technology aspect of that is, on our scale, relatively de minimis,” he added. “When you talk about stepping up to other marketplaces, whether it's South America over time, or rest of Europe, you know, we'll have to take a different view on that as these opportunities unfold, but for now, it's more bolt on and relatively small.”