Online gaming is experiencing quite a surge in popularity because of the coronavirus pandemic. With governments around the world implementing strict lockdown rules, people are forced to stay at home and look for alternative entertainment platforms.
Many market analysts have noted that the rise of online gaming will jumpstart a totally new sector of the industry. Almost all types of online gaming are on the rise, including eSports, slots, live poker, and sports betting. Although some have pointed out that the surge will mellow down once the pandemic is over, many believe that the online gaming will be here to stay.
Several traditional casino operators are banking in on this recent surge of popularity. With most casinos forced to close down or operate at a minimum capacity, some operators are looking towards online gaming as a viable source of revenue.
MGM Resorts enters online gaming sector
In a letter to company investors sent this week, IAC chairman Barry Diller confirmed that the company invested $1 billion into MGM resorts in a bid to finance its entry into the interactive gaming market.
The investment pushed through after IAC integrated Match.com into the company. As a result, all shareholders of Match.com will receive stocks of the three additional dating websites: Hinge, OKCupid, and Tinder.
In the letter, Mr. Diller highlighted the investment as a reasonable one considering the current status of MGM Resorts in the interactive gaming market. He believes that by investing huge resources into the company, they should be able to make a mark in this niche and growing industry.
MGM Resort is slowly building its online gaming portfolio. However, the company’s casino business is taking too much toll because of the pandemic that it cannot afford to splash huge investment into this new and emerging market. This is where IAC comes into play with its massive investment deal.
Online gaming continues to grow
Despite setbacks from several sectors, the online gaming market is predicted to grow exponentially this year. Early investors are now seeing returns for their investments, and new investors are also joining the fray.
MGM Resort’s own online gaming brand, BetMGM which operates through its ROAR Digital subsidiary, recently signed a partnership deal with GVC Holdings. The two companies invested an additional $250 million in ROAR last month. That is a huge injection of resources after the initial investment of $200 million back in 2018.
In the letter, IAC told investors:
“While we believe that regulatory environments generally catch up with consumer demand, it’s taken quite a while in this category, so we found one of the leading players operating in 7 going on 11 states by the end of 2020.”
The IAC has a good history of investments to companies that are on the verge. In fact, it was the company’s investment that helped Match.com recover and eventually survive.
The company also paid quite a handsome price for Expedia, which is now a major player in the online travel industry.
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