(Reuters) – GVC Holdings Plc ( GVC.L ) hit a record high on Monday after agreeing with US hotel and casino operator MGM on an online betting platform in the US had Resorts International ( MGM.N ).
FILE PHOTO: A man walks into a branch of a Ladbrokes bookmaker in London, UK, December 22, 201
The announcement is ahead of the American football season and how British betting companies look like the US Market after a US Supreme Court overturned a ban on sports betting in May.
Bookmakers have also looked into the implications of the recently introduced UK Laws of the Game after the government announced in May that it would cut the maximum bet of fixed-stock exchanges to two pounds out of 100 pounds.
"GVC seems to have struck gold by signing a 50/50 joint venture with what is arguably the largest gambling brand in the US," said Greg Johnson, London broker at Shorecap in a statement.
The GVC share rose 7.5 percent to a record high of 1,178 pence, before easing slightly to 5 percent at 0748 GMT.
The companies will initially invest $ 100 million each in the joint venture, which will have a US headquarters, said GVC, which owns the Coral, Ladbrokes and Sportingbet brands.
GVC said the joint venture will gain access to 15 US states with a population of 90 million, adding that the company will gain access to all US-based land-based and online sports betting while integrating the customer loyalty programs of both companies ,
"We are proud to partner with GVC, the largest and most dynamic global online bookmaker, with existing reputable and trusted US operations," said Jim Murren, MGM Resorts Chief Executive.
GVC had said on Friday that it was in advanced talks about a joint venture with MGM. Sky News had also reported that the deal could pave the way for a merger between the two companies.
GVC, which has grown rapidly through acquisitions, including the purchase of Ladbrokes, late last year, wants to expand in the US after the US Supreme Court has paved the way for the legalization of sports betting.
The company announced in July that it will meet expectations for the full year.
Reporting by Sangameswaran S in Bangalore; Edited by Amrutha Gayathri and Emelia Sithole-Matarise