MGM Resorts International‘s effort to get into Pennsylvania have failed in the past. However, it looks like the casino and gaming giant has finally found a way into the PA gambling market it has long coveted.
It has been a little over a year since MGM’s deal to buy Sands Casino Resort Bethlehem suddenly fell apart. Owner Las Vegas Sands has since found another suitor. However, it appears MGM has never let go of its desire to get in Pennsylvania. Now, it has finally found a way to do just that.
The MGM-Boyd deal
MGM inked a deal with casino industry competitor Boyd Gaming Corporation this week. It’s a deal that will likely see MGM dive headfirst into PA’s online gambling sector through Boyd’s recently purchased Valley Forge Casino Resort.
The MGM-Boyd deal will reportedly see the two partner on various online and mobile gaming platforms, including sports betting, casino gaming, and poker. According to a press release, first up will be jurisdictions where either Boyd or MGM operates physical casino resorts and online licenses are available.
This presumably includes Pennsylvania. The state legalized online gambling in October 2017 and invited existing casino license holders to apply for licenses to operate online in April 2018.
Boyd has a physical presence in PA since it bought the Philadelphia-area’s Valley Forge Casino Resort in December 2017 for $280 million.
The MGM-Sands deal
It was reported MGM reached a deal with Las Vegas Sands in March 2017 to buy Sands Casino Resort Bethlehem. It appeared to be an approximately $1.3 billion deal. Plus, it was widely speculated MGM’s involvement in it centered around its interest in online gambling in PA.
However, the state’s efforts to legalize online gambling in PA appeared to stall at that time. By May 2017, the MGM-Sands deal collapsed.
In March of this year, Sands reached a $1.3 billion deal to sell the casino to Wind Creek Hospitality. Wind Creek is an entity run by the Alabama-based Poarch Band of Creek Indians. Sands has since applied for an online gambling license on the tribe’s behalf.
It remains unclear why the MGM-Sands deal fell through. However, the state’s interest in expanding gambling, beyond online, could be to blame. It has been suggested widespread gambling expansion will hurt PA casinos’ bottom line. Something that would make Sands Bethlehem a less attractive purchase.
However, PA gambling expansion laws have since been passed. The industry has a more clear picture of what the state wants in terms of gambling, and how much of it the casinos can have. However, MGM, which may harbor some regrets regarding its failed Sands deal, has been left on the outside looking in. Until now.
It doesn’t make the second-highest grossing casino in the state an MGM property. It does not give MGM a physical presence of its own in PA either. However, this partnership with Boyd does appear to get MGM back in PA online gambling. Which is most likely the one thing it has coveted all along.
Targeting online gambling
At the Pennsylvania Gaming Control Board operator change request meeting in April of this year, Boyd President and CEO Keith Smith said online gambling, sports betting, and the opportunity to get back in the Northeastern US casino business were its motivation. The company has not had a physical presence in the Northeast since selling it’s 50 percent interest in Atlantic City New Jersey’s Borgata Hotel Casino & Spa to partner MGM in 2016.
Smith said this new deal with MGM positions the partners to go online in up to five states:
“Our industry is evolving, providing opportunities for growth through new forms of gaming like online and mobile gaming. Thanks to our partnership with MGM Resorts, Boyd Gaming will have the opportunity to potentially add an online presence in five additional states, positioning us for significant future growth as our respective companies take a leadership role in our industry’s evolution.”
The deal also means that MGM Resorts and Boyd Gaming combined will operate land-based gaming facilities in 15 different states, once the dust settles on some pending sales.
More about online gambling
However, the deal is clearly more about online than land-based gambling.
Both say it will allow the companies to take a nationwide approach to online and mobile sports betting, casino gaming and poker. MGM says it will open up new markets for its MGM-GVC Holdings online gambling products. PA is clearly one. Plus, Boyd says it gives it an entryway into the emerging US mobile and online gambling sector. One it didn’t have before.
Of course, MGM and Boyd are already online in Nevada, where each operates its own mobile sportsbook app. MGM is also online in New Jersey, where it runs playMGM and Borgata-branded poker and casinos sites.
However, thus far MGM has been unable to procure the physical presence its needs to get online in PA. Until now.