Ladbrokes score $200m deal with MGM Resorts

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Ladbrokes score $200m deal with MGM Resorts

Ladbrokes and Coral’s parent Group have secured a lucrative deal with MGM Resorts. UK owners GVC Holdings announced the $200m deal with the Las Vegas group at the end of July. It is understood, that this will be a joint 50/50 venture. Meaning, that both GVC Holdings and MGM Resorts will put up $100m each. This deal comes on the back of the new US sports betting legislation.

Background on the Ladbrokes – MGM Resorts Deal

Ladbrokes Coral Group plc was founded in 1886. First operating as commission agents, they have moved on to a fully fledged bookmaker. Today, around 4,000 Ladbrokes Coral bookie shops exist across the UK. Each shop provides bookmaking services and casino games to the UK public. By far their biggest offering is sportsbook betting. Which is big business. According to the United Kingdom Gambling Commission (UKGC) the gambling market is worth around £13 billion. This figure is made up of both casino and sports betting. However, this figure is set to rise due to the opening up of the US market.

As with all bookmakers, Ladbrokes and Coral provide a range of sports bets. These include both UK and international events. In the UK, this includes football, tennis, horse racing and many more. This of course covers the Premier League, Ascot, and Wimbledon. International sports competitions covered by the bookmakers include The Ashes, La Liga, and NFL.  Many of these bets are placed via their online operations. Ladbrokes’ online operations are offered internationally, except in the US. This, will now be changed thanks to the lift of US sports betting restrictions. After, a US supreme court decision sports-betting became legal in the US. Since the announcement, many UK bookmakers have been scrambling to prepare themselves. Several companies have opted to accept joint ventures with existing US operators. The Ladbrokes Coral Group – MGM Resorts deal being among them.

What does this mean for Ladbrokes?

Considering the size of the US market, this deal could be extremely profitable. Share prices for other UK bookmakers have already increased. Meaning, that UK sportsbooks and their shareowners are already counting the cash.

Looking at the Ladbrokes Coral Group, they have made a very strong deal. Las Vegas-based MGM Resorts is already an established US Brand. MGM Resorts is most famous for operating the MGM Grand and The Bellagio Casino. During the deal, GVC Holdings would become the largest casino and sportsbook provider for MGM Resorts. Which is a huge opportunity for the UK based bookmaker. One, which would allow them to firmly cement their place as a top UK online casino and sportsbook provider. It is also a huge sign of confidence in GVC Holdings, which will no doubt be reflected in share prices.

Here, is an idea of how the deal will look. Both sides are said to be looking for a 50-50 deal. This means costs of $100m each. It is thought the deal will last for up to 25 years. However, there is likely to be a buy-out option after 10 years. Meaning, that either MGM Resorts or GVC Holdings could then go solo.

Will Ladbrokes be moving to the US?

As it stands Ladbrokes Coral Group will not be moving. Despite landing a huge US deal, Ladbrokes and Coral will remain in the UK. This is mainly because the deal only involves online operations. It is not yet known if GVC Holdings will look to employ US staff. In the meantime, it is very likely that Ladbrokes-Coral Group will increase their UK employee base. This will be to mainly cover online areas of their casino and sportsbook sites. These will be UK based jobs.

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