Sports

MGM Betting Big On Its Sports League Partnerships

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MGM Chief Executive Officer Jim Murren’s comments last week about what he called the “perplexing” new Department of Justice Opinion on limitations for online gambling rightly received widespread notice.

On the same quarterly earnings call with industry analysts, Murren also fleshed out why his company has been a market leader in reaching formal strategic partnerships with pro sports leagues. These quotes earned less attention, but were highly significant in providing a window in MGM’s strategy.

Murren said his company’s philosophy is to “develop an extraordinarily robust, trusted relationship with customers.” And once the U.S. Supreme Court opened the door for sports betting across the U.S. last May, Murren felt that those partnerships would be crucial to MGM’s standing among sports bettors.

“These league partnerships which we have announced have resulted in manifest opportunities for us,” Murren said. “Take the NBA as an example. Because of that partnership, you’re going to see a far more exciting, longer-lived summer league activity out here [in Las Vegas] this year, with I think tremendous more attendance, viewership, and interest.”

MGM already is the title sponsor of the NBA’s summer league, which in recent years has expanded as many younger NBA fans have decided they don’t want to go three full months without watching basketball games. A Budweiser-sponsored lounge was added last year, and it’s clear there is far more to come on that front.

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MLB, NHL also key players for MGM

“The MLB partnership, in addition to working with MLB and their advanced analytics through their dot-com channels, has also resulted in some exciting Japan opportunities for us,” Murren added. “MGM is hosting a number of the ‘road show’ events that MLB is doing in Japan, leading up to some games that teams like the A’s and Mariners are playing against themselves and some Japanese teams.”

Murren is referring to the Oakland and Seattle AL West rivals opening up the MLB regular season in Japan on March 20-21, after playing in two exhibition games there earlier that week.

MGM’s “puck-in-play” technology deal with the NHL will set up the casino firm to offer potentially exclusive gambling on prop bets such as “who will hit the fastest slap shot?”

The three major sports league deals all provide MGM access to “official data” — a topic of some controversy in the past year. A William Hill bookmaking company executive last month called it an attempt at “monopoly pricing power.”

But MGM is taking the opposite tack, betting that gamblers will gravitate toward a company that offers online betting platforms with official team logos and that has a clear partnership with the leagues. It will be interesting to see if we can discern tangible benefits down the road from this strategy.

Football in the portfolio

“These relationships, at the bigger league level and even right now at the micro level with the Alliance of American Football … has resulted in an interesting technology play, which is how we view that involvement with AAF,” Murren said.

MGM last fall signed a three-year deal with the fledgling winter football league, again with aims of augmenting traditional betting and newer in-game betting with unique gambles on data produced by sensors on player uniforms.

Murren called in-game betting “vital to real success” in the coming years, which he said is why his company has partnered with European gaming giant GVC.

“We wanted to make sure that we had the right technology — in-house, scalable, evolving technology, and we knew we didn’t have it,” Murren said. “And we didn’t want to buy it off the shelf and we did not want to buy a company.”

MGM boss on the U.S. sports betting rollout so far

As for the U.S. sports betting landscape, Murren has watched closely as seven other states beyond Nevada are now home to legal sports betting.

“The rollout, state by state, is as expected: frustrating, slow, tortured, unclear, and not transparent,” Murren said. “Some states we believe have done it well. Some states have done it very poorly. And there’s a mix of everywhere in between. And there are several major-market states that are exploring [sports betting] right now.

“I would call this very competitive; there are some really smart companies competing in the space against us,” Murren added, citing the recent Caesars deal with Turner Sports as “a smart and clever one.”

As for that question on whether the DOJ opinion on The Wire Act would upset the online gambling apple cart, Murren pulled no punches.

“This latest missive from the Department of Justice — ‘perplexing’ is an understatement,” Murren said. “If read as [literal] words, it would mean that Powerball as it exists in 44 states in the United States isn’t legal anymore.

“So we think it’s an absurdly poorly written and unenforceable opinion, and I don’ think anyone in the industry -—the gambling industry, the sports betting industry — feels any differently.”

Late last week, the New Hampshire attorney general filed for “declaratory and injunctive relief” from new U.S. Attorney General William Barr. New Jersey is expected to file its own legal challenge to the opinion by the end of March.

Photo by Michael Neil Thomas / Shutterstock.com

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