It has been quite a week for MGM Resorts…and at the time I’m composing this blog, it’s only Wednesday, August 1. MGM’s actions this week have a broad reach across the entire sports wagering industry. Let’s highlight each one and discuss the effect it might have for players.
MGM Partners with GVC on New Venture
First, MGM and European online gaming superpower, GVC, announced a partnership that will allow the two to share technology and footprint in the US. GVC owns Ladbrokes/Coral, Sportingbet, PartyPoker, and BWIN in the UK. MGM has properties in five US states with two more on the way. Partnering with GVC may speed the plow as they look to develop online and mobile betting systems in those states. MGM has used GVC technology before in their New Jersey online casino app. This could signal MGM as having the resources to be first-to-market in many of the emerging sports wagering states. For players, this doesn’t represent any change they’ll notice other than a uniformity to MGM’s mobile and online gaming offerings.
MGM Partners with Boyd Gaming
Later that same day, MGM announced they had reached an agreement with Boyd Gaming to provide online and mobile gaming technology for states where either of the two companies currently operate physical casinos. This, in turn, expands the MGM gaming footprint to 15 total states. Again, MGM is positioning themselves to be ready to a first-mover in states where online gaming emerges in some form or another. Since MGM is likely providing just the technology, the actual branding of the apps will likely still be Boyd brands in states where Boyd is the casino owner. Players will benefit by having mobile and online gaming options more quickly from their favorite Boyd properties as legalization happens in their state.
MGM Opens Sports Wagering in Mississippi
On August 1st, Mississippi became the 4th state with full-scale legalized sports wagering in the country as MGM opened their sports books in Biloxi and Tunica. It appears MGM will beat their competitors to market by almost two weeks. Of course, getting the jump in early August is nothing like getting the jump in the heart of football season, but they’ll likely book a lot of high-vig futures action. Under current Mississippi law, there is no mobile betting component that permits wagering beyond the casino’s physical limits. That modification to existing law will likely come about in time though.
For players, this is the first legalized betting in the south. It’s also legalized betting in what is already a very competitive gaming jurisdiction. There are over 20 casino companies doing business in Mississippi and it is very likely we will see at least a dozen different offerings before the end of the year. The lack of mobile betting and the geographic diversity of the physical casinos is a hindrance to the price conscious consumer. However, an avid bettor could position themselves in Tunica or Biloxi for a long weekend and have just as much variety in their betting as they would being in Vegas in a long weekend. As I’ve mentioned before in this space, it’ll be very interesting to see how college football lines are dealt. We will wait and see if a regional bias in the lines develops.
MGM Announces Mobile Betting in New Jersey This Week
In a week of bombastic announcements, MGM CEO Jim Murren casually dropped notice that MGM will have a functioning mobile app in New Jersey by the end of this week. This caught everyone by surprise as it’s been unknown who would be first to market. Obviously, the great deadline has always been the start of the NFL season. With William Hill, FanDuel, DraftKings, and MGM having all promised to field horses in the race it was unclear who would be first out of the gate. It appears that will be MGM.
A lot of unknowns still on this one. First, will it be a new app or have they expanded the geo-fencing of their existing PlayMGM sports app? If it is a new app will it be GVC technology or the IGT technology? The latter is what Nevada players have become familiar in using on the PlayMGM app. Will the app enable users to sign-up, deposit, and withdraw without ever having to go to the physical sports book?
Mobile apps are going to be transformative in the emerging sports wagering markets. The adoption rate of the mobile apps has increased in Nevada over the past couple years. However, the majority of bettors in New Jersey will be residents who don’t want to deal with traffic in the country’s most densely populated state. Market projections have stated that 80% of the handle in New Jersey will come from mobile betting. It’ll also be interesting to see if casinos offer different odds on the mobile apps. Revenue from wagers made on mobile apps is taxed at a rate 5% higher than the in-person wagering tax rate.
MGM Announces Partnership with NBA
Ok, I admit it, I buried the lead. This was groundbreaking. This was monumental. This was unheard of just a couple years ago. This is making the NFL very uncomfortable. The NBA announced on July 31st that they have signed a partnership with MGM in which the gaming company becomes the official sports wagering provider of the NBA. In return, MGM gets licensing use of NBA logos, brand, data, and game highlights. Effectively, the NBA has found a way to get their “integrity fee” by side-stepping the states and going straight to the casinos.
For years sports leagues have shunned the idea of taking on advertising from sports wagering companies let alone name one as their preferred partner. This represents a change in culture. You can expect the game lines to be openly talked about around the NBA now. You can expect the NBA to list the current MGM odds to win the NBA Championship on their website.
The biggest reason I think this should be considered groundbreaking is the potential synergy between the league and the bookmaker. The NBA was very careful not to give streaming rights away in this deal. That will be worth much more than the reported $25 million that MGM is paying for 3 years of partnership. Eventually, a sports league will sell the streaming rights to their sport to a bookmaker. That company will develop an app that allows you to watch a game and bet on the action in-game without ever leaving the app. It’s a synergy we’ve already seen in Europe and it’ll eventually come to the US.
It’s Happening Fast – Too Fast
I didn’t even touch upon some of the other interesting developments that occurred this week. There’s finally a casino willing to pay to play in PA. Meanwhile, Caesars launched sports betting in Atlantic City. In the hopes of more rapid publication, I’m will attempt to cover updates between blog posts by posting them as comments to my last blog. Be sure to scroll down to read the updates. Of course, I look forward to your feedback regarding both the MGM announcements as well as the other topics.
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Here’s some other news:
– Parx Casino, the highest grossing casino in Pennsylvania, indicated this week that they will be willing to put up the $10 million license fee and pay the exorbitant 36% tax rate on sports betting revenue. Up until now, the casinos had all balked at Pennsylvania’s high price to play in their state. However, Parx sees the opportunity to possibly be the only sports wagering provider in the second largest gaming jurisdiction in the US. There’s a good chance other casinos will now be forced to concede and pay the ransom now that Parx has broken step with their bargaining power. There’s still little chance Parx will be up and running by NFL season. In fact, a more realistic target might be up and running by college bowl season.
– Caesars launched sports betting at their Atlantic City properties this week. The former Wild Wild West casino which sits on the boardwalk between Ballys and Caesars now has a large sports betting space to go along with the mechanical bull and beer pong. For those familiar with Las Vegas, this former casino space has a very O’Sheas vibe to it now. They also opened a sports book at Harrahs on the Marina side of town in the former space occupied by a live music bar near the Total Rewards Center.
Speaking of Total Rewards, it appears Caesars is requiring a valid Total Rewards to place any wager at their sports books in Atlantic City. This is largely for player tracking purposes as your sports wagers won’t garner you many rewards credits. For some people who have been kicked out of Total Rewards, this is not a welcome stipulation.
– DraftKings says they are now in real-money testing of their mobile betting app in New Jersey. They haven’t specified how long they will be in this phase but their launch of a sports betting mobile app could be as imminent as the MGM app I referenced in the above blog.
For the NBA at least, talking about odds and pointspreads has been a *wink* *wink* feature of both print and live coverage for some time now. I remember two occasions during the playoffs when the Warriors were cruising with a big lead late in the game and a TV commentator remarked that “there was a good reason” why people might still be watching the game down to the end (there certainly was for me–I wound up winning by a half point). (That suggests a reason why sports leagues and the networks that broadcast their games might embrace sports betting–it has the potential to make the entire game interesting, even a blowout.)
I think the single most significant development has been the gradual social acceptance of betting on things (sports or otherwise). Betting has been going on since caveman days but our puritanical society has been unwilling to accept it. Vegas is no longer “Sin City,” it’s “Fun City.” And a friendly wager on the Super Bowl, though usually illegal, is almost expected these days. So there’s no real stigma attached to gambling any more, except maybe in deeply conservative areas like the Bible Belt (and your pastor has $200 riding on the Saints, which is why his sermon was so short today).
I was able to start using DraftKings Sports Book today as part of their real money testing phase. As has been reported elsewhere, their offerings have a higher than usual vig spread. However, they also offer a lot of derivative bets and their in-game betting options are expansive.
They appear to take positions on games, much like Pinnacle. However, their opinions don’t mirror industry-leader Pinnacle. On many games tonight, they offered a better price than Pinnacle. They have some innovative features previously unseen in legalized mobile apps. For instance, you can see the line history of a game as well as betting trends. You can also “cash out” of a bet before the bet resolves. This option is very much -EV but there are plenty of bettors who will want to take advantage of this as they believe money in their pocket is better than expected value.
Lastly, one of the more convenient features of the DraftKings Sports Book app is that it shares a wallet with your DraftKings DFS account. No need to maintain two wallets. As a reminder, the app is geo-fenced to NJ and while you don’t need to be a NJ resident to sign up, you need to be physically in NJ to play.
I was pretty shocked by this capitulation to the NBA. NBA profits and franchise values are going to go straight up if new bettors embrace legalization without this money grab.
“Everybody who owns ‘top-four’ professional sports team just basically saw the value of their team double at least,” Cuban told CNBC, referring to teams in the NBA, NFL, MLB and NHL.
This is pure corporate greed and a strategy that may backfire. While it may benefit MGM, I don’t think it bodes well for bettors. If every book, which already operate on thin margins (not to mention DFS and regular fantasy leagues), has to pay every sport for data, on top of the tax grab by states, I don’t see how books can hold the line on -110. If books go to -115 or even -120, I think bettors will choose offshore as a better alternative. If offshore betting is shut down by the feds, I think a lot of bettors will just give it up rather than be abused by laying juice that makes it impossible for almost anyone to win. I know I would. If that happens, NBA viewership and franchise values will plummet.
Let’s face it, the NBA product sucks. I don’t know what percentage of viewership is made up of bettors who wouldn’t watch the NBA without action, especially during the regular season when games mean little, but I’d guess it’s pretty high. There will be a lot of ramifications from this development, and I don’t think they will be beneficial to the sports betting industry.
Good info about MGM. We just wrote an article about Vegas Casinos extending outward. For our next article like it we will definitely be referencing this article. It is good info. Cheers.