Legacy gambling companies are trying to keep up, but in many cases it’s the nimble technology upstart that ends up dominating the brick-and-mortar incumbent. MGM Resorts is trying to buck that trend with some large and lucrative partnerships and the strategy might just be successful. 

MGM has a wider partnership reach

The strategy MGM Resorts is deploying is pretty simple. The BetMGM app, which is a partnership with British firm Entain, applies for an online sports betting or iGaming license in as many states as possible, and BetMGM partners with as many high-profile businesses and celebrities as it can. 

MGM has also partnered with the NBA, MLB, NHL, MLS, NASCAR, and many more sports organizations in order to attract enough users to make the business viable. The strategy is to pay up front for big-name partners and apply that marketing to as many state markets as possible in order to grow the business.

DraftKings has partnered with the NFL, UFC, individual sports teams and even Turner Sports, but MGM has a wider partnership reach. And its bet is that will translate to more long-term growth. 

DraftKings owns 100% of its pure-play business

On the flip side of the argument is that DraftKings is a pure play in online gambling and owns 100% of the business. MGM owns only 50% of BetMGM, limiting its upside in the long term. 

If MGM doesn’t stay focused on online gambling, it could lose out to smaller, more focused operators. But right now it’s betting that the name recognition and the sheer amount of money and marketing that it’s putting into the business will make it successful. But DraftKings’ more focused strategy could prove to be better if customers choose its platform.

In a recent presentation to investors, management said that customer retention is over 80% and one-year revenue retention is over 100%, meaning users who stay end up making up for the lost revenue from users who leave.

Also, the company has a highly recognizable brand, operates in more states than competitors do, and generates more revenue from online gambling than competitors. So far, the strategy is working and pure-play could end up winning out over bigger brands.

BetMGM’s higher growth rate and MGM’s lower cap make it a better bet

In 2020, BetMGM generated $178 million in revenue, and management expects that to grow more than 100% in 2021, which would put it over $356 million in annual revenue. DraftKings is still larger at $643.5 million in revenue last year, but management expects only 48% growth at the midpoint of its $900 million to $1 billion in revenue guidance. Within a few years, it’s possible the two online gambling operations will generate similar revenue each year. 

From an investment standpoint, it’s BetMGM’s higher growth rate and MGM’s lower market cap that make MGM Resorts the better buy. Assuming that BetMGM’s operations are worth the same as DraftKings’ today, based on the growth rates and partnerships highlighted above. MGM’s 50% stake in BetMGM would then be worth $12.3 billion. Investors are getting all of MGM’s other operations for just $6.5 billion, which is a steal given that in 2019 the company’s resorts generated $3.0 billion in adjusted EBITDAR, which is a proxy for cash flow from resorts. That makes MGM Resorts an absolute steal compared to DraftKings. 

Editing by Rachel Hu

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Even long-time naysayer Nouriel Roubini, who once said Bitcoin was a “big, fake thing,” now admits that there is some actual monetary benefit to digital currency.

If a renowned economist and Bitcoin hater can come around, there’s a good chance greater adoption isn’t far off. It’s because of a number of inherent traits found in Bitcoin, as well as blockchain, that digital currency is finally being recognized for its true value.

Bitcoin, by its nature, allows individuals to interact financially with one another without having to go through an intermediary, such as a bank. Digital currency holders can send money directly to another individual’s wallet, regardless of where that person is in the world.

In most cases, the money is available in just a matter of seconds, sometimes minutes, and the transactions are always secure and verified. This makes the currency’s real-world possibilities infinite. 

This verification is important because it allows for the proper tracking of financial movements, which makes both regulators and senders happy. Because all transactions are stored on the immutable blockchain, they can never be altered and can be accessed at any time for verification that money was sent. This induces better fraud protection and greater security for funds. 

Through combined verification and protection, gambling operators can benefit substantially from the inclusion of digital currency as a payment option. They allow the entities to ensure they can adhere to regulatory guidelines regarding financial transactions, helping to ensure the risk of money laundering is fully mitigated, and can also give users greater satisfaction.

One of the bigger benefits for gambling operators is the fact that digital currency is the only money that can rightfully assert itself as global currency. It is available to anyone, anywhere (with only a few exceptions) and is the same in any language or country.

2020 has already seen an uptick in Bitcoin adoption, but there are indications that 2021 will be an even bigger year. From giving individuals greater control over their money and ensuring the currency could easily appeal to global financial regulators, Bitcoin is altering how the monetary system is viewed.

延伸阅读：

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Remulla said the committee of the province tasked to review the deal recommended the non-approval of the redevelopment of the former airbase due to “various deficiencies” in the submission of requirements.

The governor, however, noted that talks with “any qualified partner” to build the airport may be held and “hopefully” be successful by October.

Sangley airport was poised to help solve congestion at the Ninoy Aquino International Airport, but allegations of the Chinese firm being favored hounded the project right from the beginning. The two companies were the lone bidders for the project, as other interested parties viewed the terms as “unrealistic.”

MacroAsia and CCCC also failed to submit post-qualification documents, despite the Cavite government extending deadlines 4 times.

CCCC subsidiaries were among US blacklist

In August 2020, the United States had blacklisted 24 Chinese firms for their involvement in Beijing’s reclamation of maritime features in the South China Sea and its construction of military bases there. CCCC’s subsidiaries were among the blacklisted companies.

Even before the US sanctioned CCCC, the company was already blacklisted by the World Bank from 2011 to 2017 over “fraudulent practices,” which included anomalous bidding schemes.

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“Looking at the recent crime cases involving Chinese citizens, many of those were led by gambling causes,” the embassy said in its latest statement, adding the guidance amounted to a “repeated” warning.

The mission also counselled Chinese citizens against “falling into the trap” of recruitment offers by what it termed online gambling companies, luring people to work in Cambodia for “higher pay”.

“The law enforcement units of China and Cambodia are jointly enhancing efforts to combat every online gambling and telecom fraud involving Chinese nationals in Cambodia,” the embassy wrote.

On Tuesday, China’s Ministry of Culture and Tourism stated the nation would add more overseas destinations to its “blacklist” for cross-border gambling activities, though it did not name any places.

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The so-called “blacklist system” for overseas gambling destinations was first announced in August, to “better regulate the tourism market and safeguard the lives and property of Chinese citizens,” said the ministry at the time.

Investment analysts have previously said China’s blacklist was seen as a “gentle warning” to emerging gambling jurisdictions in Southeast Asia, such as Cambodia, the Philippines or Vietnam, and possibly to Australia – destinations where a vast majority of VIP demand is said to come from China, predominantly via junket operators.

Under a change in mainland China criminal law, anyone who “organises” mainland Chinese for the purpose of overseas gambling will be deemed to have committed a criminal act.

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Most casino bets in Macau are currently denominated in Hong Kong dollars, a currency pegged to the United States dollar. Players from the mainland must presently make foreign exchange transactions. Prior to the pandemic, Macau had been cracking down on unlicensed money changing in and around the casinos in Macau.

The casino regulator of Macau, the Gaming Inspection and Coordination Bureau, took the step in December of denying a Bloomberg report suggesting it had been in talks with the casino operators on the possibility of using a virtual version of Chiese currency.

“Digital RMB would allow greater government scrutiny and control over money flows,” Sanford Bernstein’s analysts Vitaly Umansky and Tianjiao Yu wrote in the latest report.

“…it would also allow easier money transfer, eliminate the need to use intermediaries (like junkets, underground banks or pawnshops). Mass and premium-mass play could surely benefit due to ease of money flow,” the analysts noted.

Though they also observed that were daily-limits-per-player to be imposed on such transactions, “there could be a negative impact on casinos”.

The traditional role of Macau’s junkets is to handle money transfer for their patrons and extend them credit for VIP play in casinos, and arrange for collection of debts on losses at the table.

Some premium mass players, have relied on underground banks for cash, observed the brokerage, adding that the latter channel had also been used by some junkets. But the institution also noted there had been a “crackdown” in China on underground banks “since 2015″.

Sanford Bernstein also mentioned the role traditionally in Macau of pawnshops handling China UnionPay Co Ltd card transactions in order to effect movement of gambling money from the mainland to Macau. That route has also been squeezed in recent years by greater controls and oversight.

“The internationalisation” of existing paper currency “could go a long way to increasing the probability” of it becoming the “standard currency in Macau,” said the report authors.

Making a digital revolution in Macau commerce would nonetheless be “a long process,” suggested the brokerage.

“Eventually digital transactions will be the norm and cash as we know it will be an historical relic. But this will be an evolutionary development that will likely take many years,” said the institution.

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