US-Based Joint Venture with MGM Played Role in DraftKings’ Takeover Bid Failure, Entain CEO Says

A few days ago, Entain’s boss explained that the US online sportsbook venture of the Isle of Man-based gambling operator – BetMGM – was one of the main reasons why the £16.4-billion takeover offer of DraftKings failed at the end of October.

As Casino Guardian previously reported, BetMGM, which is a US sports betting rival of DraftKings, is jointly owned by the casino group MGM and the British gambling company Entain. The boss of MGM Resorts had shared that he would have sought to take over the joint venture in case DraftKings had agreed to acquire Entain.

Such a massive deal would have resulted in the creating of a large gambling and sports betting group that would become one of the main competitors of MGM Resorts in the US gambling sector.

Analysts have long considered the complication as a possible barrier to DraftKing’s takeover pursuit but the remarks made by Jette Nygaard-Andersen, CEO of Entain, have been the first public admission from either one of the parties involved in the negotiation process. In an interview, Ms Nygaard-Andersen explained that Entain had always been clear that the company’s US joint venture BetMGM provided exclusivity for both parties for any activities that could involve gambling and sports betting services in the US. She further noted that it had probably played a role, especially considering the fact that such a transaction is complicated.

Entain Remains Confident in Future Prospects as Stand-Alone Gambling Operator

DraftKings abandoned its takeover bid for Entain at the end of October, only a week after the British gambling company decided to extend the deadline for the US sports betting and daily fantasy sports operator to revise its acquisition offer. At the time, Entain issued a special statement to the stock market to reveal that DraftKings had walked away from the £16.4-billion acquisition offer and had decided not to proceed with a firm takeover bid.

Although the talks of a possible takeover deal were unsuccessful, both Entain and DraftKings have shared they remained confident in their individual prospects as stand-alone entities.

As Casino Guardian has already revealed, the dealmaking process in the gambling and sports betting industry has been heating lately, especially after the US Supreme Court decided to liberalise the sports betting services in the country. On the other hand, US daily fantasy sports and sports betting companies have been looking to take advantage of the expertise of companies that already have some experience in more developed gambling markets such as the one of the UK.

Ms Nygaard-Andersen, who has been one of the few female bosses of UK gambling companies, has revealed that Entain was releasing a diversity initiative aimed at training of educating 1 million people by 2030 as part of a massive commitment to the Government worth £100 million. The British gambling company has revealed that the initiative was aimed at people from under-represented groups to pursue technology and gambling careers.

Olivia Cole

Olivia Cole

Olivia Cole has worked as a journalist for several years now. Over the last couple of years she has been engaged in writing about a number of industries and has developed an interest for the gambling market in the UK.

Daniel Williams
Author: Wanda Peters