Why Barry Diller and Tilman Fertitta Are Betting Billions on Land-Based Casinos in an AI-Driven World

Barry Diller has spent decades shaping media and technology. Now, at 84, the founder of People Inc., formerly IAC, is betting on casinos. His company has proposed buying the majority of MGM Resorts it does not already own, valuing the group at more than $18 billion. Days earlier, hospitality tycoon Tilman Fertitta agreed to buy Caesars Entertainment in a deal valuing the company at $17.6 billion.

Neither deal is final. But the timing stands out. Capital floods into artificial intelligence, speeding up product development and personalisation. Land-based casinos often get dismissed as legacy assets. Diller sees something else. He views MGM as a real-world asset that AI cannot easily replicate or disintermediate.

This moment highlights a structural shift. Regulation still decides where gambling happens, which products exist, and how much friction stands between customer and bet. Land-based casinos hold permission, place, and people. That combination proves hard to replicate online. For US operators balancing hybrid strategies, these deals signal fresh capital flowing into physical assets even as iGaming faces barriers.

The Deals Signal Renewed Confidence in Physical Assets

The proposed transactions come as online channels scale rapidly. European online gambling revenue reached €47.9 billion in 2024 and accounted for 39% of total gambling revenue. Casino is the largest online vertical at €21.5 billion, two and a half times its land-based equivalent.

In the US, iGaming grew 27.6% in 2025 to $10.74 billion, against 2.3% for traditional casino gaming. The seven live iGaming states generated more than $10 billion in 2025. In Pennsylvania and New Jersey, online overtook commercial land-based revenue for the first time.

Yet the capital commitments to MGM and Caesars suggest investors see enduring value in the physical floor. Diller’s move fits his pattern of backing assets that regulation protects. Governments use scarce physical gaming licences to anchor tourism, hospitality, and entertainment. MGM’s Osaka integrated resort, due around 2030, and licensed integrated resorts in the UAE follow the same pattern.

From my perspective after decades observing the evolution of gaming, these deals mark an inflection point. Operators cannot ignore online speed, but they also cannot abandon the regulatory moat that physical presence provides.

Regulatory Barriers Shape Hybrid Strategies

Permission remains the foundational asset. Online casino exists only where governments allow it. New Jersey launched in November 2013. More than a decade later, only eight US states have legalised it and seven are live. The rest stay closed, held back by tax, tribal interests, and incumbent lobbying.

The American Gaming Association estimates illegal and unregulated US gambling generates $53.9 billion a year and costs states $15.3 billion in taxes. Once a channel grows large enough, pressure builds to regulate it. Until then, land-based operators enjoy scarcity value.

This regulatory reality drives US operators’ hybrid strategies. MGM, Caesars, Penn and Boyd all run online casinos. In Pennsylvania alone, 24 licensed online platforms operate through land-based licence holders. In states where iGaming remains illegal, some operators push into white-label social casinos.

Tribal land-based leverage adds another layer. Tribes hold sovereign authority over gaming on their lands in many jurisdictions. Where commercial iGaming faces political resistance or high taxes, tribal casinos provide stable physical footprints and often exclusive rights. The proposed MGM and Caesars deals could accelerate partnerships that blend tribal sovereignty with broader distribution.

Yet challenges persist. Online products test and iterate quickly. The physical floor moves far slower. An online operator reaches anyone with a smartphone, personalises offers, and re-engages in real time. SPRIBE’s Aviator game reportedly processes hundreds of thousands of bets per minute. That speed sets the competitive bar.

The Risk of Chasing Customers Online Instead of Enhancing the Floor

A clear risk emerges when operators follow customers onto screens rather than improving the venue itself. Both MGM and Caesars have built online presences. Those efforts chase revenue outside the building, where the venue exerts less control and keeps less of each dollar.

This approach carries limitations. Online wins on access and engagement. The floor owns permission, place, and people. A busy casino floor delivers hosts, regulars, groups, tourists, noise, and the buzz of winning in front of others. A screen at home cannot reproduce that experience.

Manufacturers still dominate innovation on the floor. Aristocrat holds 35.2% share of top core slot games. Light & Wonder has 21.9%, IGT 18.0%, Konami 10.1%, Everi 6.0%, and AGS 4.3%. That concentration drives advances in cabinet design, game maths, and graphics. But wider floor experience lags.

Operators own the customer relationship yet often lack software DNA. They rely on VIP hosts, loyalty cards, free play, mailers, drawings, and isolated slot tournaments. The bigger opportunity lies in technology that brings players through the door and makes the floor feel alive.

The counterargument is straightforward. Online revenue growth outpaces land-based. If operators cannot close the interactivity gap, capital may continue shifting toward pure digital plays. Yet the Diller and Fertitta moves suggest sophisticated investors believe the physical moat retains durable value, especially when tied to hybrid models that respect tribal regulatory leverage.

Bridging the Gap Without Replicating Online

The machines do not need to change. A slot machine remains a slot machine. The opportunity sits in the layer around them: information, competition, rewards, social play, and live events.

Every sportsbook lets a punter check form, prices, and markets. A customer on a casino floor often walks past hundreds of machines with little sense of which to play. Real-time leaderboards, floor-wide competitions, or timed tournaments could change that dynamic.

Waterhouse VC has taken an option in Slot Check. The platform surfaces machine-level performance information to players in near real time. It supports challenges, tournaments, and social play without altering licensed game hardware. This approach adds a digital layer around the physical experience.

US operators can apply the same thinking to hybrid strategies. Where tribal land-based assets provide regulatory shelter, layering real-time engagement tools can drive visitation and spend. The convergence of physical permission with digital interactivity creates a defensible position.

The Bottom Line

The MGM and Caesars deals underscore that land-based casinos are not relics in an AI era. They are regulated anchors that online cannot fully disintermediate. For US operators, the strategic imperative is clear: strengthen hybrid models that leverage tribal land-based strengths while addressing regulatory barriers to broader iGaming expansion. The winners will blend the irreplaceable human energy of the floor with the information and competition mechanics that online customers already expect. That balanced approach turns permission, place, and people into sustainable competitive advantage rather than legacy constraints.