MGM Holding Talks with DraftKings Over Future of BetMGM, CEO Says

But MGM Resorts CEO Bill Hornbuckle adamant that DraftKings can either buy Entain or compete in US. “They can’t do both,” he says.
MGM Holding Talks with DraftKings Over Future of BetMGM, CEO Says
October 08, 2021

MGM Resorts International CEO Bill Hornbuckle stated the obvious this week when he said his company “would love to own the other half” of BetMGM, the successful joint venture it has with UK gaming conglomerate Entain.

But when asked about DraftKings’ offer to buy Entain in a cash-and-stock deal valued at $22.5 billion, Hornbuckle was firm: DraftKings can’t consummate a deal with Entain without first talking to MGM.

It’s unclear if MGM has a say in whether a deal ultimately goes through. MGM alluded to that effect last month when news of DraftKings’ two offers for Entain first broke. Analysts have since said it’s unclear if MGM has that power because such details haven’t been disclosed to the public.

Speaking on the sidelines of the Global Gaming Expo in Las Vegas, Hornbuckle told CNBC Business News’ Contessa Brewer that MGM has had “casual conversations to date” with DraftKings over the issue, adding “time will tell where all of this goes.”

“Ultimately…if DraftKings in fact is able to acquire [Entain]…they’ll need to come to us if they want to continue to operate in the US,” Hornbuckle said during CNBC’s Squawk on the Street program. “They can’t do both.”

He added, “if we’re able to acquire and get a larger piece and take over BetMGM, that’s something that we would also be excited to do. It’s kind of up to them.”

One analyst estimated that MGM could wind up paying between $6.4 billion and $11.1 billion to acquire Entain’s 50% stake in BetMGM. But another posited that DraftKings would be foolish to let MGM buy it because it would benefit one of their biggest rivals in the US.

MGM made an unsuccessful $11 billion bid for Entain last January. Hornbuckle was elusive when Brewer asked him if MGM offered to buy Entain just to control BetMGM.

“We’ve seen the space, we understand it,” he said. “We understand what it can do for our universal company in terms of omnichannel, so we’re excited by it. We would love to own the other half of BetMGM. Time will tell. We would love to be global at some point. Again, time will tell. For now, we’re going to focus on the next couple weeks and see what happens.”

The “next couple weeks” comment is telling, since UK law requires that DraftKings make an official announcement that it plans to buy Entain, or is abandoning the idea altogether, by October 19.

Said Brewer: “The talk of the Global Gaming Expo has been the drama that is surrounding” DraftKings’ bid for Entain.

When CNBC’s David Faber asked Hornbuckle if he had heard whether Entain is looking at DraftKings’ bid favorably, the CEO declined to speculate, but he did say there was chatter about the bid among common shareholders.

“Just remember, if it does happen, and it might, it’s going to come through us,” Hornbuckle said. “And we’ll take a view on whether it’s in BetMGM’s best interest and ultimately our own. And if it’s not, frankly we’re simply not going to do it.”

A spokesman for DraftKings did not return a call seeking comment.

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