According to analysts and industry experts, Tipico US's exclusive betting platform has the potential to greatly benefit BetMGM in the emerging Brazilian market.
Furthermore, this project will offer reassurance for the company in the event that MGM chooses to separate from Entain, as it provides a secure platform for operations in the United States.
"Tipico represents a significant advancement," stated one M&A consultant to iGaming Business. Industry professionals believe that with a solid US player database, MGM will be equipped to navigate a potential departure from the Entain BetMGM partnership without significant financial implications.
MGM with Tipico
MGM announced the acquisition of Tipico's technology stack, teams in Colombia, Europe, and the US, to enhance LeoVegas' global sportsbook offerings. The deal accelerates LeoVegas' access to advanced technology, positioning them well for entry into emerging markets like Brazil.
Despite interest in expanding into new markets, MGM CEO Bill Hornbuckle has stated that the focus will remain on BetMGM for the time being. The partnership with Tipico provides a comprehensive technology platform for BetMGM, addressing potential future structural concerns. MGM's unsuccessful bid for Entain in 2021 has closed the door on further offers, with the company remaining dedicated to the BetMGM brand in the US for now.
Migration from Kambi platform
LeoVegas is set to part ways with Kambi, causing Kambi's share price to drop by 9%. Despite Kambi representatives mentioning a partnership extension until June 2023, a research paper suggests that LeoVegas will switch to the Tipico platform after the contract ends.
This move is expected to impact Kambi's long-term earnings, with LeoVegas currently contributing around 3% of their revenue. Analysts at ABG Sundal Collier also speculate that MGM could potentially become a new client for Kambi, particularly due to the appeal of their BetBuilder product for operators looking to develop their own sportsbook.
Hornbuckle's four-legged ambition
Hornbuckle's ambitious plan for MGM's digital expansion includes developing a sportsbook platform, live casino, and international betting platform through partnerships with companies like Playtech.
He envisions a new frontier in online platforms, aiming to serve customers globally and diversify digitally with a top-level team led by industry experts such as Gary Fritz and James Brody.
“Tipico has no relation to the US market”
It is unlikely that Tipico will operate in the US, as the operator has failed to gain real market share, especially against betting and gambling giants DraftKings and FanDuel.
“Tipico has no value in the US market,” one industry commentator told iGB. The larger Tipico group is owned by private equity firm CVC Capital Partners, which previously held a stake in William Hill.
“Has entering the American market become more sustainable for Tipico in the gambling industry? Does this make the group more suitable for an IPO?” asks a commentator.
After MGM's announcement, employees of various Tipico US casinos were at risk. A LinkedIn post from the company's VP of Casino, Claire Alexander, reads: “With the recent acquisition of Tipico by MGM, I have some great casino employees that won't be for sale for long! Please contact me if you would like more details."
On the deal, Tipico CEO Joachim Baca said the company had invested heavily over five years to build its own sports betting and gaming platform in the US.
“On behalf of the Tipico Group Board of Directors, I want to thank our US teams for their years of dedication, passion, drive and innovation that have made our US sports betting and online casino platform the compelling business it is today.” , concluded Buck.
