Potential Purchasers Emerging as Sports Betting Market Consolidation Grows, with MGM and Fanatics in the Race
Industry insiders predict a surge in mergers and acquisitions within the sports betting sector this year, with major players like MGM Resorts International (NYSE: MGM) and Fanatics potentially at the forefront.
As sports betting equities struggled in late 2021 and throughout 2022, a renewed focus on profitability and reduced spending on promotions has sparked renewed interest from investors. This could potentially lead to increased merger and acquisition activity.
In an interview with Insider, Ramy Ibrahim, managing director advising gaming and other industries at investment bank Moelis & Company, stated, "Given market conditions, I would anticipate a significant amount of M&A activity in the online gaming sector in the US and internationally in 2023."
The global sports betting industry is speculated to be on the brink of numerous high-profile transactions, including mergers and acquisitions, in the coming year. Some are familiar, while others may never come to fruition.
BetMGM and Fanatics Leading the Charge
Industry analysts believe that BetMGM and Fanatics will likely drive the deals in the sports betting sector this year.
Regarding BetMGM, it's believed that MGM Resorts International could consider purchasing Entain's (OTC: GMVHY) stake in the online casino and sportsbook operator. This would be more cost-effective than acquiring Entain outright, a deal MGM executives recently claimed is not imminent. Each company currently owns 50% of BetMGM.
privately-held Fanatics, long the subject of industry consolidation rumors, could finally make a move to expand its sports betting presence through an acquisition. The company has shown an interest in deals but has yet to initiate a sports betting-related transaction.
The sports betting industry could see more deals this year, either similar to DraftKings' (NASDAQ: DKNG) acquisition of Golden Nugget Online Gaming or involving companies entering specific markets or regions, Insider reports.
Other Noteworthy Deals
Beyond potential consolidation, the sports betting industry could also see other high-profile transactions in 2023. These could include Fanatics launching an initial public offering (IPO) and FanDuel parent Flutter Entertainment (OTC: PDYPY) listing its shares in New York to expand its investor base.
Flutter management has already suggested that such a move would take priority over a potential spin-off of a portion of FanDuel for public investors.
Insider also reported other potential big transactions, such as European sports betting giant Bet365 entering the US market, and Hard Rock International seeking to expand its iGaming/sports betting footprint in some form.
Hard Rock is the gaming division of the Seminole Tribe of Florida, operating brick-and-mortar casinos not only in its native state but also in states with thriving sports betting markets such as Nevada, New Jersey, and Ohio.
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