‘Trillions of Wealth Creation’ Bode Well for MGM Resorts, Caesars Acquisitions
Analysts see a strong future for Las Vegas tourism and growth in the digital sector as positives for Barry Diller's proposed takeover of MGM Resorts.
With the potential acquisition of two of the biggest companies in gambling poised to shake up the industry, competitive pressure in the online sports betting space, declining Las Vegas tourism and the threat of prediction markets present surmountable challenges for Barry Diller and Tilman Fertitta, analysts say.
Diller’s People Incorporated, which holds a 26.1% stake in MGM Resorts, has proposed to buy the shares of the company it does not already own. The development follows last week’s news that Fertitta Entertainment has reached a deal to acquire Caesars Entertainment in a $17.6 billion deal that includes $11.9 billion in debt, regulatory approval pending.
Macquarie Capital Head of US Research Chad Benyon told Gambling Insider that his firm, which had an “outperform” rating on MGM Resorts before Diller’s announcement, expects “several catalysts” this year to boost the stock across its diversified assets in Las Vegas, regional properties, Macau and digital.
Vegas accounts for about 58% of that portfolio, and with around 40,000 hotel rooms in 13 properties, MGM controls roughly a quarter of that inventory. Caesars operates about 20,600 rooms across eight resorts along the Strip and downtown, comprising the second-largest footprint in the city.
Tourism in Sin City has been soft the past few years, but thanks to millions of people looking to have fun with money to spend, the future is bright.
“We believe that experiences will continue to grow and exist, even more so with tech/AI wave,” Benyon said in an email to GI. “It continues to serve as an unplug and given the trillions of wealth creation in the last decade for those with retirement accounts, we expect strong travel demand for the next decade.”
Benyon’s outlook aligns with Diller extolling MGM’s “real world assets that AI cannot easily replicate or disintermediate.”
In his analysis on People Inc’s offer, Citizens Managing Director Jordan Bender wrote, “Given its long history as a shareholder, we believe the proposal carries greater credibility than a typical unsolicited approach. … Overall, we view the proposal as a strong validation of MGM’s underlying value and as evidence that the [company’s] assets remain more valuable than recent public market trading levels imply.”
The market has responded positively to Diller’s move, sending shares of MGM up from $43.19 at the close of business on Friday to as high as $51.41 on Monday, the day the news broke.
BetMGM’s Digital Growth
While BetMGM, MGM Resorts’ digital arm, sits a distant third to FanDuel and DraftKings in the online sports betting space, Diller, in the letter to the company’s board outlining his bid, stressed “exceptional digital growth opportunities.”
The digital entity, co-owned with Entain, outpaced the market leaders in terms of growth in 2025, per data provided by Macquarie. Growth becomes potentially exponential should the legalization of online casinos proliferate, as the industry hopes and expects.
Benyon explains:
For digital, MGM was a leader in ’25 with 30% growth (ahead of all major players). For ’26, the market expects single-digit growth (higher for iGaming) and this should accelerate if new iGaming markets are legalized. ’26 will include growth from Alberta, but we expect for ‘27/28, we expect for additional markets to be legalized.”
Customer acquisition costs may continue their slight escalation under the threat of prediction markets, an emerging industry neither MGM nor Caesars plans to enter, but Benyon reiterates a take with which we’re becoming familiar: cannibalization in legal betting states has so far been minimal.
Will MGM Acquisition Price Increase?
Diller’s cash bid of $48.30 per share represents a 24% premium over MGM’s 30-day average price. The board may want more.
“We see two competing dynamics at play,” Bender wrote. “On one hand, People’s existing ownership stake and voting influence could present challenges for competing bidders or shareholders seeking to block a transaction given the fragmented ownership structure while the relatively modest premium could support demands for a higher offer. The stock is already trading above the takeout price, and we believe it is reasonable that MGM’s board will seek an improved proposal during negotiations.”
Diller has a seat on the board of directors but said he’ll recuse himself from these negotiations.
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