They say twice is a coincidence – which means the US gambling landscape could soon be one M&A away from a certified trend. Indeed, over the last seven days, the US industry may have entered a new phase of consolidation.
Less than a week after Caesars Entertainment agreed to a $17.6bn acquisition by Fertitta Entertainment, MGM Resorts International received a non-binding proposal from People Incorporated, the investment vehicle controlled by media billionaire Barry Diller, valuing the company at approximately $18bn including debt.
On the surface, the two deals appear unrelated. One is a definitive agreement led by hospitality entrepreneur Tilman Fertitta. The other is an unsolicited proposal from an existing shareholder. Yet, the timing is difficult to ignore.
Together, they suggest a growing belief among investors that some of America's largest gaming operators are worth more in private hands than they currently are on public markets.
Why does Barry Diller want MGM?
The identity of the bidder is arguably as interesting as the bid itself.
Diller is best known as a media executive and entrepreneur rather than a casino operator. Over several decades he built a reputation through Fox Broadcasting, QVC and InterActiveCorp (IAC), creating and spinning off businesses including Match Group, Expedia and Vimeo. However, his relationship with MGM is far from new.
IAC – recently renamed People Incorporated – began accumulating MGM shares during the Covid-19 period when casino valuations collapsed amid travel restrictions. Diller has repeatedly argued that MGM is significantly undervalued, and that public markets fail to properly recognize the strength of its assets and long-term growth opportunities. Recent statements from People Incorporated describe MGM as a rare business combining irreplaceable physical assets with attractive digital growth potential.
Crucially, the company's 26.1% ownership stake in MGM means Diller already has substantial influence over the operator. Earlier this year, MGM and IAC formalized a voting agreement that capped excess voting power while guaranteeing board representation under certain conditions.
Part of the challenge is structural; MGM is difficult to categorize
At the time, the arrangement appeared designed to provide governance stability. In hindsight, it may also have laid groundwork for a deeper strategic move.
The latest proposal would see People Incorporated acquire the remaining shares it does not already own at $48.30 per share in cash and ultimately attain a controlling 50.1% in the company.
The valuation debate
The central argument behind the proposal is straightforward: MGM is undervalued.
Diller explicitly stated that MGM's businesses are "not currently realizing their full potential in the public markets." Interestingly, MGM management appears sympathetic to that view.
Speaking shortly after the proposal became public, MGM CFO Jonathan Halkyard suggested investors were not fully appreciating the value of the company's portfolio. The executive even described Diller's interest as "gratifying", because it validated the belief that the company is being misunderstood by the market.
There is evidence supporting that argument.
MGM generated record Q1 revenue of $4.5bn in 2026, while FY2025 revenue reached $17.5bn. The operator maintains dominant Las Vegas Strip exposure, strong regional operations, a growing digital business and a leading position in Macau through MGM China.
Yet despite those strengths, MGM's valuation has often lagged investor expectations.
Part of the challenge is structural; MGM is difficult to categorize. Investors seeking high-growth digital gaming exposure often favor pure-play online operators. Investors seeking stable real estate exposure increasingly gravitate toward gaming REITs. Meanwhile, traditional casino operators continue to trade against concerns around visitation trends, economic cycles and capital intensity.
MGM's diversified portfolio can thus make valuation challenging. Investors must simultaneously assess mature casino assets, digital growth opportunities, Macau exposure and long-term development projects such as Osaka, often resulting in competing valuation frameworks.
The timing conundrum: Why now?
Timing may in fact be the most important factor.
Although MGM has delivered revenue growth, profitability trends have been more mixed. Net income declined 15.8% year-on-year during Q1 2026, while adjusted EBITDA fell nearly 9%. Las Vegas revenues have stabilized but margins remain under pressure and occupancy has softened compared to previous peaks.
At the same time, MGM has continued reshaping its portfolio.
The recent $546m sale of MGM Northfield Park demonstrated management's willingness to monetize non-core assets and recycle capital into growth opportunities, balance-sheet management and shareholder returns.
That transaction generated approximately $420m in net proceeds and reduced annual rent obligations. From a buyer's perspective, MGM may now represent a cleaner and more focused acquisition target than it did several years ago.
Diller is also making a long-term bet on sectors that appear relatively insulated from technological disruption. In announcing the proposal, People Incorporated highlighted MGM's "real world assets that AI cannot easily replicate or disintermediate" while simultaneously pointing to digital growth opportunities through businesses such as BetMGM.
Could taking MGM private unlock value?
This is perhaps the strongest strategic rationale behind the proposal.
Public companies face constant quarterly scrutiny. Large-scale casino operators, meanwhile, often require multi-year investment horizons involving property renovations, international expansion projects and major development pipelines.
MGM Osaka provides a useful example. The Japanese integrated resort project represents one of the industry's largest long-term growth opportunities but will require patience before generating meaningful returns.
A private MGM could provide greater flexibility to pursue long-duration investments without the pressure of quarterly earnings expectations. A private MGM could also become more aggressive in portfolio restructuring, asset optimization and digital strategy.
Private ownership structure could, therefore, provide greater flexibility when evaluating future strategic options around digital assets such as BetMGM. The online business has become one of the most valuable strategic components within MGM's broader ecosystem and could attract even greater focus under a private ownership structure.
The central argument behind the proposal is straightforward: MGM is undervalued
What could stand in the way?
Despite the enthusiasm surrounding the announcement, the proposal remains far from complete.
First, it is non-binding.
MGM's board has acknowledged receipt of the proposal but has made no commitment to proceed. Directors are obligated to determine whether the offer adequately reflects shareholder value and whether alternative paths could deliver superior returns.
Second, financing remains a key consideration.
Although Diller has expressed confidence in securing the necessary capital, an acquisition of this size would require substantial debt and equity commitments. Investors will inevitably scrutinize leverage levels, particularly given broader economic uncertainty and rising financing costs.
Third, the market's reaction may complicate matters.
MGM shares rose sharply following news of the proposal, reflecting investor optimism regarding either the bid itself or the possibility of improved terms.
The Caesars connection
Perhaps the most intriguing aspect of the MGM story is that it arrived immediately after the Fertitta-Caesars deal.
Both transactions share a common theme; large gaming operators with valuable brands, significant real estate exposure and complex financial structures being targeted by wealthy investors who see greater long-term value in these businesses than public markets currently appear to recognize.
The situations are not identical. Caesars entered negotiations carrying higher leverage and had already experienced considerable share-price pressure. MGM's financial position is comparatively stronger.
Yet the strategic message is similar.
The market may be entering a period where private capital sees greater opportunity in gaming assets than public investors do.
If both transactions ultimately proceed, ownership of two of America's most recognizable casino operators would shift away from traditional public-market structures and into more concentrated private control. This would represent a very significant moment for the sector.
Of course, whether Diller ultimately succeeds remains uncertain. However, even if the proposal never advances beyond the negotiation stage, it has already highlighted a growing debate within gaming: Are public markets accurately valuing the industry's largest operators, or are they creating opportunities for well-capitalized buyers willing to think longer term?
The answer to this question may well shape the next decade of US gaming…
If completed, Barry Diller's proposal would take MGM Resorts private less than six years after IAC first acquired a stake in the operator during the Covid-19 pandemic
