Another week, another prediction market trading record. And, away from prediction markets, two of the biggest names on the Las Vegas Strip had very different weeks on the M&A front. In Vegas, Caesars shareholders backed Tilman Fertitta’s $17.6 billion takeover, while Barry Diller dropped his attempt to acquire the remainder of MGM Resorts shares.
Here are some of the biggest stories from the week worth catching up on.
Caesars Shareholders Back Fertitta’s $17.6B Takeover
Last week, the Federal Trade Commission complicated Tilman Fertitta’s proposed acquisition of Caesars Entertainment with a second request for information.
This week, the deal cleared another important hurdle. Caesars shareholders voted overwhelmingly in favor of the merger at a special meeting in Reno. Of the shares represented at the meeting, approximately 93% backed the deal. In total, 133.3 million shares voted for the merger, representing around 65.4% of all outstanding shares.
Under the agreement, shareholders will receive $31 per share. Fertitta will also assume approximately $11.9 billion in Caesars debt, bringing the overall value of the transaction to roughly $17.6 billion.
That does not mean Fertitta owns Caesars just yet. The FTC review is still in progress, along with other closing conditions that haven’t yet been satisfied.
Barry Diller Drops MGM Resorts Takeover Bid
The Caesars deal could certainly be counted as a win, but the same can’t be said for the proposed MGM takeover.
Barry Diller’s People Inc. withdrew its proposal to buy the MGM Resorts shares it does not already own. The company already owns about 27% of MGM, and it had offered $48.30 per share in cash after submitting its proposal in June, valuing remaining shares at around $18 billion.
A special committee of MGM directors spent several months considering and negotiating the offer before talks ultimately fell apart. Despite that, People Inc. will retain its existing stake in MGM.
The Wall Street Journal reported that MGM executives are now considering a reverse takeover to take control of People Inc.
Responsible Gambling Debate Heats Up
It was also a fairly uncomfortable week for responsible gambling
The National Council on Problem Gambling faced further internal pressure over its relationship with Kalshi, which joined the organization earlier this year and pledged $2 million over two years.
A New York Times investigation reported that the sportsbook used machine-learning tools to identify customers likely to respond to promotions by betting and losing more. It also reported that DraftKings had developed technology capable of predicting which users were at risk of developing gambling problems, but did not deploy it. Gaming America looked at the claims, as well as the role states themselves play in the continued growth of gambling tax revenue.
NCPG President Derek Longmeier also issued a statement saying the organization considers prediction markets “functionally gambling” regardless of their current legal classification and believes they can expose consumers to many of the same harms as traditional gambling.
It was also a fairly uncomfortable week for responsible gambling
Prediction Markets Keep Finding New Battles
IGA Conference Chairman Victor Rocha told Gaming America he expects further tribal litigation following the Ninth Circuit ruling and strongly criticized DraftKings over its expansion into prediction markets.
In addition, Kalshi has filed a proposed margin framework with the CFTC that could eventually allow approved institutional participants to put up less than the full value of certain positions. The initial proposal excludes sports event contracts and retail users, but it has already generated debate over how far prediction markets could eventually move toward leveraged trading. The CFTC has not approved the proposal.
All in all, it’s another week of prediction markets continuing to grow, as well as the controversy and arguments surrounding them. The difference was that Las Vegas managed to grab some of the attention back in the news cycle. With Caesars moving another step toward a $17.6 billion takeover and MGM’s own acquisition drama suddenly coming to an end, there was more than enough happening away from Kalshi to make this a particularly busy week.
