For the second time in several months, MGM Resorts International used a subsidiary to acquire a gaming asset.
On Monday, the company announced that its LeoVegas Group had agreed to terms to acquire Tipico Group Ltd. The company didn’t disclose the price tag.
Tipico offers its branded sportsbook in four states, including the Colorado sports betting market. According to a press release from MGM Resorts International, Tipico will cease offering its sportsbook before the close of the deal.
MGM to use Tipico’s software for in-house product
BetMGM Sportsbook Colorado could eventually be the biggest winner of the deal. MGM purchased Tipico to use its sportsbook technology for its own products.
For now, BetMGM has a joint venture agreement with Entain. Thus, BetMGM’s American-facing operations use Entain’s software. However, that could change soon. For several months, rumors were swirling that MGM and Entain could be parting ways.
If that happens, BetMGM will most likely use the now-in-house Tipico platform for its U.S. operations. Until then, LeoVegas will use Tipico technology for its overseas platforms.
LeoVegas CEO Gustaf Hagman said the new software will give their customers an upgraded online betting experience.
“By controlling our own sportsbook technology, we ensure that we will deliver the world’s greatest iGaming experience to customers across all our markets and brands,” Hagman said. “Powering our strong brands with a competitive and innovative sports product will enable us to grow and strengthen our sportsbook offering in both new and existing markets.
Recent acquisitions help bolster MGM’s overseas products
The Tipico purchase shows once again that BetMGM desires to own the software behind its product. The Entain partnership keeps them from doing that in the U.S. In the meantime, MGM made strides to do just that in Europe.
Late last year, the company used LeoVegas Group to buy Push Gaming, a B2B gaming provider with an established foothold in European markets.
MGM Resorts International Interactive president Gary Fritz was excited about owning software. Not just the forward-facing brand.
“This acquisition gives us control of our entire technology ecosystem,” Fritz said about the Tipico purchase. He added that the proposed purchase of Tipico allows BetMGM to “operate a proprietary sports betting platform.”
Deal spells the end of Tipico in the U.S.
The proposed deal signals Tipico’s apparent end as a fringe U.S. sportsbook that plodded along in Colorado, Iowa, New Jersey, and Ohio.
It was among the first sports betting operators to secure licenses in multiple states following a 2018 ruling by the U.S. Supreme Court, which allowed states to decide whether sports betting is legal. But since its U.S. debut in 2020, Tipico Sportsbook failed to gain significant market share in the crowded and competitive American online sportsbook market.
As part of the deal, the German company will cease its U.S. operations. On the other hand, Tipico retained the right to offer its branded sportsbook in Europe. LeoVegas Group will absorb Tipico’s U.S. management team in addition to other Tipico assets located in Colombia and Europe.
There are no details yet regarding how Tipico customers in Colorado can close their accounts and retrieve funds before the closure. Additionally, Tipico nor MGM announced when Tipico’s final day of Colorado betting would be.
