On Wednesday, last week, North American gaming leader MGM Resorts International announced that it has finalized the purchase of the Swedish online sports betting brand LeoVegas. The deal is said to be worth US$604 million, and it was accepted by 96% of the European operator’s shareholders. The final price is lower than the initial offer due to exchange rate fluctuations.
MGM Resorts is a leader in providing land-based casino entertainment as well as online gaming via its BetMGM brand. The company operates brick-and-mortar casinos across several U.S. states while its online sportsbook is live in key regulated markets. For instance, this year, it debuted in New York’s mobile sports betting and Ontario’s iGaming sectors.
After a vote, shareholders of LeoVegas have voted 96% in favour of the deal. For the purchase, the Swedish brand will receive approximately US$604 million, which is less than the original US$607 million of May 2, 2022, due to fluctuation rates. MGM Resorts will pay the equivalent of SEK 61.00 or US$5.72 per share for the acquisition of the leading European online brand.
The completion of the all-cash transaction arrives only four months after the first takeover bid from the U.S. company, which in May said that the deal provides an opportunity to create a scaled global iGaming business. Now, after the acquisition is agreed upon, MGM Resorts will take full control of the Stockholm-based operator this week, once a final share settlement is provided.
After the purchase, MGM Resorts will receive valuable synergies with the addition of the prominent European catalogue to its already rich portfolio of gaming products. This includes its sportsbook brand BetMGM. The company shared that it plans to keep LeoVegas’ management at their positions, as they will once again operate the company’s international platforms.
Through the addition of LeoVegas to its consolidated balance sheet, the corporation is hopeful to offset some of the losses from its BetMGM brand. The deal will also finance the massive advertising and promotional costs of BetMGM, which has debuted in numerous North American iGaming markets in the last few years. The parent company was required to cover $35.5 million in losses.
Expanding to New Territories in 2022
This year, MGM Resorts has managed to expand to new key regulated markets. For example, in January the sportsbook debuted in the recently-launched New York State mobile sports wagering market. The company became one of the nine operators allowed to operate in the local market governed by the New York State Gaming Commission. Just recently the market surpassed US$10 billion in total handle.
Then in April, Ontario launched the first of its kind online and private iGaming market in Canada. The market kicked off on April 4, 2022, and BetMGM was among the first operators to go live in the jurisdiction. However, unlike the Empire State, the provincial sector offers both online gambling and sports betting, and the app is now available to play for eligible Ontarians.
Source: Kimble, Victor “MGM Resorts Completes $604 Million LeoVegas Acquisition”, Covers, September 1, 2022