“It’s a phenomenal piece of kit with no customers; Tipico has been trying to sell it for a year,” said one M&A advisor while discussing Tipico’s platform with iGaming Business. This platform, despite its technological prowess, has struggled to find buyers, presenting a unique opportunity for MGM Resorts in expanding its digital footprint.
In a bold move announced earlier this week, MGM Resorts revealed plans to acquire Tipico’s U.S. tech stack and trading teams located in Columbia, Europe, and the U.S. The aim is to integrate these assets into LeoVegas’ international betting services, thereby accelerating MGM’s digital ambitions.
“This acquisition drastically shortens the timeline for LeoVegas to gain control over its tech stack compared to developing these capabilities in-house. It should also improve their ability to make a strong start in emerging markets like Brazil,” said Aaron Lee, an equities research analyst at Macquarie US Equity Research. Brazil is anticipated to finalize its online betting regulations in July, with a launch expected in early 2025, providing a fertile ground for MGM’s expansion.
At the JP Morgan Gaming, Lodging, Restaurant & Leisure Management Access Forum held in March, MGM Resorts CEO Bill Hornbuckle emphasized the company’s strategic move to enter Brazil and other new Latin American markets. “We view LeoVegas as scalable, especially in markets like Brazil. We’re positioning ourselves to capitalize on these opportunities and are excited about what’s ahead,” Hornbuckle noted.
While Macquarie’s Lee expresses skepticism about MGM exiting its BetMGM joint venture in the near term, he acknowledges the strategic moves underway. “Both sides have consistently affirmed their commitment to the JV, indicating that BetMGM will continue to be their vehicle for the U.S. and Ontario markets,” Lee said. However, he also noted MGM’s underlying desire to eventually resolve the joint venture structure. “It is improbable that Entain would part with its technology, making the Tipico deal a strategic move for MGM to secure a complete tech platform for the BetMGM brand,” Lee added.
MGM previously made an £8.1 billion bid for Entain in 2021, which was poorly received, and Hornbuckle confirmed that another offer would not be considered. An MGM spokesperson declined to disclose whether the operator might consider establishing an independent betting offering in the U.S. “We are exclusive to BetMGM in the U.S.,” they stated.
LeoVegas will also need to transition from its current Kambi sportsbook. Following the announcement of the acquisition, Kambi’s share price saw a 9% dip. In response to inquiries from iGaming Business, Kambi highlighted the multi-year partnership extension it signed with LeoVegas in June 2023. An ABG Sundal Collier analyst note dated June 25 indicated that LeoVegas would likely migrate to the Tipico platform once its Kambi contract concludes, with LeoVegas accounting for approximately 3% of Kambi’s revenues.
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“Kambi’s long-term earnings might be impacted, but we see potential in MGM becoming a modular client. BetBuilder, for instance, remains an attractive product for a company developing its in-house sportsbook,” the note stated.
At the JP Morgan forum, Hornbuckle reiterated the firm’s pursuit of a sportsbook platform, saying, “Sports betting and sports betting technology are fundamental to our LeoVegas business.” He added that there are four essential components to their strategy, praising LeoVegas’ casino technology and brand. Besides casino and sports betting, Hornbuckle highlighted plans for an in-house live casino offering and hinted at nearing the acquisition of a platform to bolster BetMGM’s international presence.
On June 20, MGM also announced a partnership with Playtech to stream live casino games from its Las Vegas Strip properties, promising an authentic land-based casino experience.
In an interview with iGaming Business in December, Hornbuckle emphasized the importance of digital growth for MGM. “Through BetMGM and initiatives with LeoVegas in Europe, Canada, and South America, we aim to diversify into digital, enabling us to engage with customers year-round,” he stated, reinforcing MGM’s intent for a significant digital push.
Behind the scenes, MGM has been assembling a top-tier team led by interactive president Gary Fritz, responsible for the company’s digital growth strategies, encompassing both organic growth and M&A activities. Supporting Fritz is James Brodie, head of interactive international, previously a Goldman Sachs director for European gaming, leisure, and real estate.
Despite Tipico’s lack of traction in the U.S. market against giants like DraftKings and FanDuel, the acquisition presents a strategic advantage for MGM. “Tipico is irrelevant to the U.S. market,” an industry commentator told iGaming Business. The broader Tipico group, primarily owned by private equity vehicle CVC Capital Partners, continues to navigate its position in the gaming industry.
Following MGM’s announcement, several Tipico U.S. casino staff now face uncertain futures. Claire Alexander, VP casino for Tipico U.S., posted on LinkedIn, “Following the recent acquisition by MGM, we have some excellent casino staff available. Please reach out if you’d like more details.”
Commenting on the deal, Tipico’s Group CEO Joachim Baca acknowledged the significant investment over the past five years in developing their proprietary sports betting and gaming platform for the U.S. “I want to express my gratitude to our U.S. teams for their dedication, innovation, and passion, making our platform the attractive venture it is today,” he concluded.
This strategic acquisition positions MGM to capitalize on new digital opportunities and solidifies its commitment to expanding its footprint across emerging markets.
