A recent deal in the financial markets appears to be a strong indicator that online casino gambling’s future in the U.S. is all about legalization. Recently IAC (InterActiveCorp) purchased a 12% stake in the offline casino giant MGM, worth over $1 billion at the time of sale. According to IAC, the company behind popular online services such as Match and Tinder, the current price of MGM stock was just too good to be passed over, considering the devastation on all casino related stocks the pandemic has dealt. But reading between the lines, we get a good sense that IAC is much more interested in the future possibilities of country-wide legalization of online casino gambling, rather than the half-empty blackjack tables at the MGM properties, at least those that are allowed to open during the pandemic. Even Barry Diller, IAC’s chairman, was far from being covert, admitting that the prospects of online gambling is what sparked interest in MGM’s shares.
Currently, MGM has absolutely no online casino presence, leaving the few legalized internet gambling markets in the USA, such as Pennsylvania and New York, to competitors to build brands recognition, if not big profits. But with such a large stake in the company now, and with many other states desperately looking for new and creative ways to fill their pandemic-depleted coffers, there is no doubt that IAC would be pushing for MGM to start working on a plan to corner as much of the online casino market, as possible. Since MGM remains one of the most recognized gambling brands, not only in the U.S., but all over the world, IAC were certainly smart to jump on the cheap stock while the getting was good.
Worldwide, online gambling, including casinos and sports betting, is estimated to bring nearly half a trillion dollars yearly, and IAC is looking for a way to get a piece of that pie. Many European countries have long legalized online gambling in their jurisdictions, but the US market would certainly dwarf them all, should a country-wide legalization of online casino gambling become a reality in the near future. The change of patrons’ habits during the pandemic is another reason more entertainment companies would be looking to fill the void left by the land-based casinos and the restrictive rules put in place at the local casino properties.
Many states with legalized online casinos are already reporting doubling of their revenues from the internet gambling taxes, compared to last year. And with no end in sight for social distancing, the online casinos are sure to become the preferred stop for more and more gamblers throughout the country. The stake IAC bought in MGM is just a subtle reminder that legalized US gambling is a matter of when, not if.