Further CZR and MGM Valuation and Takeout Thoughts

Research evidence excerpt

Further CZR and MGM Valuation and Takeout Thoughts

Equity Research

Industry Update — June 5, 2026

Gaming

Further CZR and MGM Valuation and Takeout

Thoughts

We understand What just happened, but wanted to dive in

with some thoughts as to the Why

Our Call Trey Bowers, CFA

We expect a big reason behind both the Fertitta proposed acquisition of CZR and Diller Equity Analyst | Wells Fargo Securities, LLC

Trey.Bowers@wellsfargo.com | 617-210-3724

acquisition of MGM is driven by a bullish outlook on digital gaming and expectation that

Zachary Silverbergboth deals buy the Digital assets cheap.

Equity Analyst | Wells Fargo Securities, LLC

Zachary.Silverberg@wellsfargo.com | 212-214-1152

Why are they doing this deal? Many conversations that we have had involve trying to Nicholas Weichel

figure out what the endgame is for the two acquiring parties for MGM and CZR. The Associate Equity Analyst | Wells Fargo Securities, LLC

main debate for the 'why' has revolved around the digital assets and their terminal value, Nicholas.Weichel@wellsfargo.com | 646-717-0343

specifically on the iGaming side after RSI has re-rated to ~18x+ 2027E EBITDA. Both

CZR Digital and BetMGM are profitable and have value, but it is unclear how any potential

monetization would encompass omnichannel benefits.

Methodology. We attempted to solve BetMGM/CZR Digital valuation equation through

the lens of what consensus OSB vs. iGaming EBITDA implies based on RSI and DKNG

current trading multiples. DKNG trades at 11x '27 and RSI trades at 18x '27, and both are

predominately North America. To derive OSB/iGaming EBITDA, we used the same mix of

NGR, but note that GMs at DKNG are higher for OSB on taxes, but marketing is primarily

OSB-focused, thus an assumption of similar margin characteristics.