Barry Diller is making a big bet on Vegas.
The 78-year-old billionaire’s tech-and-media conglomerate IAC, which has reaped a fortune from success stories like Expedia, Tinder and Vimeo, has taken a 12-percent stake in hotel and casino giant MGM Resorts in a deal valued at roughly $1 billion, the company announced on Monday.
Diller said he was drawn to MGM, owners of resorts like The Mirage, The Excalibur and Luxor, for its burgeoning online gaming business.
“What initially attracted us to MGM, besides its leadership in leisure, hospitality and gaming, was an area that currently comprises a tiny portion of its revenue – online gaming,” Diller said in a press release Monday. “There is a digital first opportunity within MGM Resorts’ already impressive offline businesses, and with our experience we hope we can strongly contribute to the growth of online gaming.”
Diller — worth an estimated $3 billion, according to Forbes — said IAC has been on the hunt for deals since it spun off Tinder owner Match Group last month, leaving it with $3.9 billion of cash and zero debt.
The company swooped just as the casino and hotel business has been getting crushed by the pandemic.
In its announcement Monday, IAC said Las Vegas-based MGM has enough cash and access to capital to make it through the pandemic stronger. In January, MGM sold MGM Grand and Mandalay Bay for $4.6 billion in a deal involving Blackstone Group. last year, a private equity firm bought Bellagio from MGM for $4.25 billion.
MGM currently operates over 35 percent of the rooms on the Las Vegas Strip and owns regional hotels and casinos across the US, as well as a handful of international properties, including two in Macau, China.
IAC’s presser said the NYC-based media company has long been searching for an opportunity to get involved the $450 billion global gaming industry, which currently requires a physical presence in each state to operate in any particular region. With its investment in MGM, IAC now believes it now has a foothold to grow that business.
“Although we would never ‘bet the company,’ we know that this is a large bet for IAC,” Diller and IAC CEO Joey Levin said in a joint statement to shareholders. “We have long been driven to look opportunistically for chances to build great interactive businesses and compound capital for our shareholders, and MGM has a rare but clear opportunity to deliver on that promise.”