Benzinga - by Zacks, Benzinga Contributor.
MGM Resorts International's (NYSE: MGM) subsidiary, LeoVegas Group, is set to acquire the product and technology platform from Tipico Group Ltd constituting the U.S. sportsbook and online casino. Subject to customary closing conditions, this transaction is expected to close in the third quarter of 2024.
This acquisition will help LeoVegas operate a purpose-built proprietary sportsbook across all international markets and brands, except those exclusive to the BetMGM JV. This strategic move will ensure LeoVegas offers a top-tier product with favorable pricing and functionality that enhances the consumer experience.
Furthermore, as part of the acquisition, LeoVegas will acquire a few of Tipico's U.S.-facing management, technology, and trading teams across the United States, Colombia, and Europe.
MGM Resorts believes this buyout marks a milestone in enhancing its global digital gaming business. It also positions LeoVegas to offer an exceptional iGaming experience to customers across all its markets and brands.
Growth Drivers of MGM MGM Resorts, one of the leading companies in the gaming and lodging industry, is well-poised to grow on high brand awareness. Considering its gaming side of the business, the company's continuous focus on sports betting and iGaming has driven solid top-line growth and helped reach new markets. Since its launch in 2018, BetMGM has been gaining market share, resulting in it currently operating in 28 markets. The company expects BetMGM to be live in 29 markets by 2024.
Also, MGM Resorts is gaining in its digital business thanks to the acquisition of LeoVegas in 2022. On May 1, 2023, the company announced the first major investment by its subsidiary, LeoVegas, which had agreed to acquire the majority of a game developer, Push Gaming. This initiative supported the company's expansion in international markets and online gaming. It also paved the path to driving its omnichannel strategy and generating incremental earnings between brick-and-mortar and online channels.
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Shares of this owner and operator of casino resorts through wholly owned subsidiaries have gained 1.7% in the past year compared with the Zacks Gaming industry's 11.5% growth. Although the company's shares have underperformed its industry, its ongoing focus on sports betting and iGaming along with international expansion, asset-light strategy, and non-gaming activities are likely to foster its growth in the upcoming period.
Zacks Rank & Key Picks MGM Resorts currently carries a Zacks Rank #3 (Hold).
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