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RG revolution at BetMGM? Not quite

VegasSlotsOnline writer Jon Pill took to the worldwide web this week with an opinion piece slamming BetMGM’s latest responsible gambling initiative.

Apparently, the Entain and MGM Resorts JV recently gave itself a big pat on the back after revealing it would make the ‘Gamble Responsibly’ wording on its ads and apps bigger.

Yep, that was it.

According to Pill, the news brought a smile to his face, but for all the wrong reasons.

Coinciding with Problem Gambling Awareness Month in March, BetMGM leant on its vast resources and knowledge to come up with the groundbreaking new strategy, which demonstrates its “significant commitment to showcasing responsible gaming in advertising.”

The self-congratulation was a hard Pill to swallow for the intrepid journo, who compared the move to a villain in a play who thinks he’s getting away with some deception, even when the audience and other characters know better.

Still, making the campaign genuinely convincing is not necessarily the operator’s objective, he suggested.

“It is doubtful that BetMGM is hoping to convince the public with this campaign,” he said. “It probably serves more as a message to the regulators.”

He wrote “When BetMGM – a company with a literal predator as its logo – says it cares, the statement can feel a tad disingenuous.”

Lion logos notwithstanding, perhaps it is high time gambling operators started paying more than just lip service to the importance of responsible gambling.

Just deal with it

Meanwhile, Business Insider treated us to a well researched rundown of nine possible M&A deals that could shake up the US gambling sector this year.

According to the piece, there is a pent up demand for M&A at the moment after a decided drop in the volume of transactions taking place through 2022.

The piece includes no shortage of talking heads and their views on the upcoming “flurry of M&A activity,” with some predicting that several smaller betting brands in the US will be forced to either seek a buyer or shut their doors once and for all.

Top of the list, and especially timely following the release of its full-year 2022 results earlier this week, was a possible US listing for FanDuel owner Flutter Entertainment.

Flutter “could see greater rewards from Wall Street than it would from international investors” by opting for a dual listing, BI reckoned, while a strengthened US presence could open up the business to more deals in the future.

Perhaps unsurprisingly, merchandising giant Fanatics also made the list, with the sector (and iGaming NEXT) having watched the firm with baited breath since it declared its sports betting intentions in 2021.

In December last year, the firm raised $700m that was earmarked for M&A, and rumours have abounded around the possible acquisitions it could make, including a takeover of German operator Tipico. Fanatics could also make a move towards its long-awaited IPO in 2023, according to the piece.

Next up, Rush Street Interactive and PointsBet were both identified as potential takeover targets, while it was suggested that Hard Rock could surprise by setting the sports betting market more firmly in its sights.

Whatever happens, there’s certainly no shortage of movers to look out for before the end of the year.

Who could Penn a deal for Barstool?

John Wall Street took a closer look at Penn Entertainment and its Barstool Sports brand this week, suggesting that relinquishing ownership could be the best path to delivering shareholder value for the operator.

Penn’s acquisition of Barstool saw it pay “roughly $525m in total consideration for an asset that most analysts seem to think is worth anywhere from $800m to $1bn,” according to Sharp Alpha Advisors’ Lloyd Danzig, meaning the operator was able to close the deal at a significant discount.

Still, Barstool and its associated sportsbook have failed to capture the market share executives hoped for, JWS suggested, leading some to speculate that another change in ownership could be coming down the line.

“If a big enough gap opens up between the value of Barstool the media brand and Barstool the betting brand, Penn could find themselves in a spot where selling Barstool and licensing back the brand for betting creates the greatest value for shareholders,” suggested Acies Investments’ Chris Grove.

While it’s not quite there yet, Grove added it would be “interesting to imagine how [CEO and president Jay] Snowden would handle a ten-figure offer for Barstool.” 

Penn previously projected that Barstool Sportsbook could be among the top operators in the states where it operates, with the business model of owning both media and betting operations thought to put the brand in an especially favourable position.

Unfortunately for Penn, that is yet to materialise, as the seemingly unassailable lead of FanDuel, chased up by DraftKings and then BetMGM, has proved too big an obstacle for Barstool to overcome.

Better performing states of Michigan and Pennsylvania have seen Barstool acquire market share of 6% and 5.6% respectively, so not exactly a market leading position. In other states, the brand’s market share doesn’t even bare thinking about.

Still, a buyer may be difficult to come by and, notwithstanding the list of companies on the lookout for new acquisitions listed in the segment above, few firms look well positioned to take over Barstool’s media assets while they are still tied up with Penn.

That leaves the operator with little choice but to tread down the same path it is already on.

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