With Merger Off, BetMGM Looks to Its Next Test: the Super Bowl
(Bloomberg) -- BetMGM Chief Executive Officer Adam Greenblatt said more of his customers are wagering that the underdog Tampa Bay Buccaneers will beat the Kansas City Chiefs in Sunday’s Super Bowl.
That means he could lose money if Tom Brady’s team pulls off an upset victory. One BetMGM customer in Nevada wagered $2.3 million on the Bucs. “As if I wasn’t nervous enough before,” Greenblatt said in an interview. The Chiefs are currently favored by about three points.
Regardless of the outcome, Sunday’s game will provide the biggest showcase yet for BetMGM and the rest of the U.S. sports-betting industry, which has been booming since the Supreme Court allowed states outside of Nevada to offer such wagers. Twenty states and the District of Columbia have now embraced sports bets, and five more are pending.
A record 7 million people may legally bet online on the Super Bowl this weekend, a 63% jump from last year, according to the American Gaming Association, a casino trade group. The overall amount wagered could rise 66% to $500 million, estimates PlayUSA.com, a website for industry news. That’s even though traffic at casinos is down due to the coronavirus.
DraftKings Inc., a BetMGM rival, said Tuesday that it would air the industry’s first Super Bowl ads, part of a broader promotion Sunday in which it will distribute $55 million to players in an online contest.
BetMGM decided against a Super Bowl ad, figuring it wouldn’t entice enough high-end players to pay for itself, Greenblatt said. But the company has stepped up its marketing elsewhere, relying on partnerships with major leagues such as the NBA and celebrity spokesman Jamie Foxx.
“Now you’re in the ring with the king of sportsbooks,” Foxx says in one ad. “You know what to do.”
The company is owned by Las Vegas casino giant MGM Resorts International and Entain Plc, the Isle of Man-based parent of Ladbrokes and other betting businesses. Both were in the news last month after Entain rejected an $11 billion offer to merge with MGM. But their joint venture, founded in 2018, is still looking to be a significant player in the fast-growing U.S. online betting business.
BetMGM, which is based in Jersey City, New Jersey, has more than tripled its headcount to 450 people since April. At $175 million, sales were ahead of forecasts last year.
The company is offering 800 different bets on Sunday’s game, from how many points will be scored in the first half, to the likely MVP and what color Gatorade will be poured on the winning coach.
The would-be Entain-MGM merger aside, Greenblatt said combinations of land-based casinos and online operators will continue as the industry matures and “super-heavyweights” come to dominate the business. Size will matter, particularly for gamblers who used to place their big Super Bowl bets with a bookie.
“If you’re a serious player, you know you’re going to get paid,” he said.
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