LeoVegas quarterly report results indicate improvements in several key areas of the business. What does that mean for the MGM Deal? (Image from AbsolutVision at pixabay.com)
News shook the online gaming world at the beginning of May after MGM Resorts made an official bid to acquire the reputable casino brand, LeoVegas.
The U.S entertainment giant made a firm offer of SEK 61 per share to the shareholders of LeoVegas, which trades on the Nasdaq Stockholm. This offer seemed reasonable, because, at the time, LeoVegas was trading at just SEK 42.32. This led to the LeoVegas Board of Directors urging its shareholders to vote in favour of the acquisition. For any deal to go through, 90% of votes would be needed. If the vote gets passed, MGM Resorts would be looking at the deal to be finalised sometime in the second half of 2022.
What would the results of the upcoming financial reports mean for the deal?
What the Results Revealed—Solid Increases in Several Key Areas of the Business
LeoVegas had scheduled to release its quarterly report for the period of January 1st 2022—March 31st 2022 on the 5th of May. However, the Swedish gaming firm announced that it would be publishing the report a few days early, at 06:45 CEST on the 2nd of May 2022. CEO of LeoVegas, Gustaf Hagman, and CFO of LeoVegas, Stefan Nelson, also announced that they would be making a live presentation of the results via webcast at 09:00 CEST on the same day. This would be followed up by an open Q&A session.
Revenue for the company was up slightly, from EUR 96.7 million to EUR 98.5 million. This represents an increase of 2% when compared to the same period in 2021. EBITDA was up 36% year on year, from EUR 10.439 million in 2021, to EUR 14.144 million this year, and after adjustments, EBIDTA showed an increase of 29% from EUR 10.946 million to EUR 14.144 million.
Net gaming revenue generated from regulated markets, as well as additional markets where LeoVegas pays gaming taxes to the local government, was in which the company pays local gaming taxes was 71% of the total net gaming revenue. This was up from 65% for the same period last year.
New depositing customers were down 6% for the period, whereas returning depositing customers were up by 2%.
Interested parties, of course, can find the official quarterly report through the LeoVegas website.
Why is LeoVegas an Attractive Proposition for MGM Resorts?—A Strong European Presence
There is a multitude of reasons why MGM Resort will still consider LeoVegas an attractive acquisition. Firstly, MGM will be encouraged by the latest financial results, with revenues, EBITDA, and cash flow improvements, but there is much more than that. LeoVegas has recently been registered as an official gaming operator in Ontario, Canada. This market is one of the most exciting in iGaming, as it has tremendous growth potential, which will appeal to MGM Resorts greatly. LeoVegas also has some tech hubs opening up in Warsaw, and also in Malaga. This will give MGM Resorts even more of a presence in Europe. On top of this, LeoVegas is a highly respected brand, and this has not gone unnoticed. LeoVegas has proudly won a great number of iGaming industry awards, some of which include:
- Online Casino of the Year—Global Gaming Awards London 2021
- Mobile Casino Product of the Year—2021 EGR Operator Awards
- Casino Operator of the Year—2019 EGR Nordics Awards
- Mobile Operator of the Year—2020 EGR Nordics Awards
- Casino Operator of the Year—2020 EGR Nordics Awards
- Online Casino of the Year—2022 Global Gaming Awards 2022
No Change in Opinion: Following the latest financial results, it is unlikely that any opinions have been changed at MGM Resorts, and the company will still be looking to purchase LeoVegas. Almost certainly, the final decision will be with the shareholders and if they are willing to accept the offer.
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