MGM and LeoVegas Merger & Impact
News that MGM has bought out popular online gambling company LeoVegas will undoubtedly have a dramatic impact on the gaming industry as others to stay ahead of the game. Many industry experts will follow this merger between two of the world’s most famous brands. However, what does this deal mean for shareholders of both companies, and how might it affect the gaming industry in general? What changes can we expect? Will this lead to even more mergers and acquisitions between significant casino companies, and how might that change the face of gambling worldwide?
About MGM Resorts International
International entertainment corporation MGM Resorts International, with sites in the United States and across the world, offers a broad variety of hotels, casinos, restaurants, nightlife, and retail establishments, as well as state-of-the-art meeting and conference facilities. With a wide range of Las Vegas-inspired brands, MGM Resorts provides unforgettable, immersive experiences. There are 29 distinct hotel offers in the MGM Resorts portfolio. These include some of the most well-known hotel brands in the market. The firm is spreading throughout the United States.
Who is LeoVegas?
LeoVegas is a rapidly expanding online gambling brand with a significant presence in multiple European markets. This partnership will help MGM gain access to new players who might not have interacted with their brands, giving them an advantage over competing casinos. It also allows them to share data about customers’ in-game preferences, allowing MGM to target its marketing better towards players who might be interested in additional products like sports betting or poker. Finally, we’ll likely see some casino branding on some of MGM’s more popular TV shows in the future – perhaps as a cross-promotion/marketing tactic with LeoVegas.
The MGM and LeoVegas Merger
MGM Resorts and LeoVegas have announced that they will be merging. This is one of many mergers in recent years as casino companies are struggling to compete with technological changes while keeping their brands relevant in an increasingly competitive market. The most notable merger was Caesars Entertainment’s merger with Hyatt Hotels. The new company, Caesars, owns over 50 casinos across America under several different brand names. MGM has struggled to keep its heads above water in a hyper-competitive casino market; the company even discussed bankruptcy only months ago before plans were made to merge with LeoVegas.
Why Does It Matter?
It’s common knowledge that casinos are consolidating in brick-and-mortar establishments and online. One company has been leading the charge: MGM Resorts International. The casino giant recently finalized a $1 billion deal to purchase peer Caesars Entertainment Corporation, giving total control over two major brands: Caesars Palace on Las Vegas Strip and its online betting site, Planet 7 Casino. Overlapping businesses isn’t uncommon in business mergers, but it was an unusual pairing. The deal was particularly unique because Meruelo Group (which also owns the Chilean soccer team Universidad Católica) already owned Planet 7.
How Much Will The Industry Change?
Back in 2011, it was rare to see a significant casino brand bought out. Such deals are becoming more commonplace as casino conglomerates compete for market share. Two such organizations recently got together: MGM Resorts International has announced plans to purchase Swedish gambling giant Leovegas AB. The $4 billion deal will combine two companies with a lot in common:
both have ties to sports betting as well as operations in Macau;
both are leaders in online gaming;
both operate outside Las Vegas (LeoVegas runs out of London, and MGM is based near Detroit).
That makes some pundits question how much further change we’ll see—and whether other brands might follow suit.
What Can Casino Operators Do?
It is increasingly challenging to find ways to differentiate yourself from your competitors in a growing market. However, if you’re looking to take your casino game above and beyond expectations, then consider utilizing virtual reality in your overall strategy. Whether it’s a tabletop machine that allows players to interact with their avatar on-screen or even an entire area dedicated to VR games/rooms, you can use VR as a gateway tool that leads to bigger-ticket revenue streams.
What Does This Mean For Casino Players?
Casinos have become increasingly consolidated as brands are bought out or merged with larger companies. Several of these mergers occurred within just a few months in 2017. For example, The Rank Group, which owned PokerStars and Full Tilt Poker, merged with Oryx Gaming in March 2017. Then in June 2017, Scientific Games acquired Bally Technologies for 5 billion dollars. With MGM purchasing a 15% stake in Leovegas, there will likely be further consolidation between different casino brands to make room for newly minted giant—LeoVegas. This type of consolidation might be troubling if you were betting on one particular brand staying independent to retain your business.
Other Changes To Expect In The Future
This year has already seen some significant changes to our favorite casinos. These mergers will continue happening as more online casinos need more investment capital. This year has seen an exciting merger between Betway and Aspire Global and several changes in ownership of brands such as Ignition Casino, which is now owned by The Stars Group (formally Amaya). The growth of technology will also impact how people gamble with their mobile devices becoming ever more powerful. You should expect that we will see our current favorite games continue to be played on these mobile platforms, but new games could include augmented reality or virtual reality versions that we can access with only our phone or tablet. We may even see new types of gambling introduced – like betting on sports events via your phone!
To Conclude: Why is MGM buying LeoVegas?
This might come as a shock to some, but not everyone is on Instagram. In fact, in 2015, just 9% of people over 50 used social media. Facebook is the largest, with 68% penetration among US adults. But Instagram has more 18-29-year-olds as active users than any other platform – leaving Snapchat behind. So it makes sense that MGM and LeoVegas want to target younger gamblers through Instagram’s new IGTV feature. The deal will allow MGM Resorts International to use IGTV videos across its casino brands, including Bellagio, Mandalay Bay, Luxor, and Mirage. The company will also be able to access LeoVegas’ existing user base of 1 million followers. MGM hopes to attract younger gamblers by using these videos, but they hope that LeoVegas’ experience in video content creation will help them improve their offerings.