MGM Resorts International CFO admits BetMGM Brazil investment will be “very modest”
Jonathan Halkyard discusses MGM Resorts International’s upcoming Brazil expansion via a joint venture with media giant Grupo Globo, and whether any M&A activity can be expected from the operator in the near future
MGM Resorts International’s chief financial officer (CFO) Jonathan Halkyard has described Grupo Globo as “the perfect partner” ahead of the Brazilian joint venture (JV) expected to launch in January 2025.
The gambling titan has joined forces with the Brazil-based media giant to launch the BetMGM brand in the South American country early next year, with Halkyard revealing the license application has been sent and he is hopeful it will be awarded at the turn of the calendar year.
It was confirmed last month that BetMGM Brazil would be powered by LeoVegas Group’s technology, as is the case for BetMGM’s brands in the UK and the Netherlands.
At the time the partnership was confirmed, MGM Resorts International bosses explained that by teaming up with Grupo Globo, the pair would “create a product with significant scale, resources and access”.
Speaking at the Deutsche Bank 32nd annual leveraged finance conference held in Arizona this week , Halkyard was pressed for comment on the size of the opportunity for MGM in Brazil, to which the CFO shed light on the dynamics of the JV. “Grupo Globo is a very important media company in Brazil, and we have partnered with them to enter the Brazilian igaming market. We think they’re the perfect partners,” Halkyard explained.
“It’s interesting, this partnership is, in a way, the opposite of the partnership we have with Entain for BetMGM, in that in the JV with Grupo Globo it is MGM providing the technology and Grupo Globo providing the customer acquisition of the funnel and the brands and so on.”
He continued, adding: “We filed our license applications, we expect those to be awarded in January. It will be a competitive market, no doubt, but it will be a huge market.”
ouching on just how much money will be pumped into the project from MGM’s side, Halkyard revealed: “The investment will actually be very modest, as compared to any of the other deals we’ve done in the digital space – our investment in BetMGM, our acquisition of LeoVegas and Push Gaming and Tipico. Those will all be much greater than I expect our commitment will be to the Globo JV.
“It’s already formed, we’re recruiting the management team, we filed our licences, we expect to be granted those in early 2025, and then with our technology and their customer relationships, we’ll be off to the races.”
As per Halkyard’s comment, the JV’s leadership team recruitment process is underway and will be comprised of talent from both companies while being based out of São Paulo.
Meanwhile, the MGM Resorts International chief was also pressed for comment on the company’s current appetite for M&A activity, to which he replied there has not been any significant change.
Halkyard answered by referring to MGM’s decision to build its own digital business alongside the JV with Entain and how it was always known internally that such a project would require “distribution, product and technology”, something he believes the company now has following the acquisitions of LeoVegas and Push Gaming as well as Tipico’s sportsbook betting technology.
“We’ve built the important component parts for a wholly owned digital business. I’m recognising that will all be for operations outside the United States, augmented by things like the Grupo Globo JV.
“I don’t think there is going to be a large-scale digital M&A action for the company for a while because right now, we’re very busy with LeoVegas doing their market expansions, eventually integrating the Tipico technology. It’s LeoVegas that’s kind of doing the global JV, so we’re using that company as a vehicle for our growth in this area.”