This September saw a deal reached between US casino giant Caesars Entertainment and UK sports betting stalwart William Hill, with the former buying the latter for £2.9 billion ($3.72 billion).
According to the parties involved the deal should be completed by the third or fourth quarter of 2021. The purchase is part of an effort by Caesars to dominate the sports betting market in the US, as it surges in popularity (and legality) across the country. Caesars purchased at a share price of £2.72, just under the current trading price of £2.74.
The deal
The £2.9 billion takeover comes in the wake of two unsuccessful bids by Apollo Management which served to boost share prices in William Hill by 40%, valuing the company at £3 billion ($3.82 billion). The deal also follows the upward trend of sports betting in the United States, especially since the 2018 Supreme Court case in which online sports betting was legalised in New Jersey. After that landmark case, many states moved to follow suit, influenced by overwhelming demand and the promise of large tax revenues for state infrastructure.
At the time of writing, 18 states across the nation now regulate sports betting. And for good reason – online sports betting has grown in popularity across the globe, drawing in an entire new demographic of punters due to its convenience and ease of use, as well as ever more competitive odds offered by bookmakers hungry for a greater market share. It is now one of the fastest growing industries worldwide.
The successful bid by Caesars Entertainment is an attempt to consolidate the gambling market in the US, adding to their brand which encompasses some of the most iconic land based casinos in the world, as well as a formidable online gaming presence. The company forecasts a $600-$700 million net turnover from their acquisition of William Hill for 2021.
For William Hill the deal represents something of a lifeline – the COVID 19 pandemic has hit the company hard, with 119 high street branches set for closure, and with a bleak UK economic forecast. They currently have 1400 betting shops which could be sold off after the completion of the deal, which some critics see as an easy way out. A statement from the company cited an ‘attractive price for shareholders’ as a primary reason for the success of the bid by Caesars.
Caesars Entertainment
Formerly known as Eldorado Resorts (who actually acquired Caesars and then changed their name in July 2020), Caesars Entertainment is a leading resort hotel and casino chain in the US, which operates or leases numerous casinos nationwide, with over fifty properties. These include several in Las Vegas, featuring classic venues on the strip such as Planet Hollywood Las Vegas, The Cromwell, and Paris Las Vegas, which features – amongst numerous other attractions – a 540 feet (164 metre) replica of the Eiffel Tower.
The company traces its history back to the Eldorado Hotel, founded in 1973 by Don Carano amongst others – the Carano family still controls the company to date. Eldorado Resorts closed a deal worth $18 billion to take over Caesars, consolidating the market.
The company employs around 18,700 employees across its properties in multiple states. Following the global market trend, Caesars was quick to establish itself as a powerful online presence, offering high stakes and VIP rooms.
This is a trend we’ve seen elsewhere in the world of online gambling, such as in the best high roller casinos in South Africa, that provide players with personalized VIP experiences as well as many exclusive advantages and rewards. Some of them offer higher betting limits that can help increase the chance of winning, while others give exclusive VIP tournaments, cash prizes, gift vouchers, and even the latest electronic gadgets or luxury 5-star holidays.
Caesars’ acquisition of William Hill this year is part of a campaign to promote itself as a big player in the online sports betting scene, now legal in many US states.
William Hill
Founded in 1934, when gambling in the United Kingdom was still illegal, William Hill emerged as one of the premier bookmakers in the country. Its rival Ladbrokes has always been slightly ahead in terms of revenue.
The company has changed hands several times, being owned by Sears Holdings and Grand Metropolitan amongst others. It was listed on the London Stock Exchange in 2002, and more recently launched online casino games (as WHG) alongside bingo and ‘skill games’.
It currently employs 14,000 people in the UK, Ireland and Gibraltar, although it is unclear how this will be affected by Caesars Entertainment taking over. Although the company has suffered during the pandemic, of 119 betting shop closures it reported only 16 job losses, with the others reassigned. The board of directors unanimously agreed to the deal with Caesars.
Whether the deal will work out for Caesars remains to be seen, as although William Hill have floundered in recent months, the sports betting scene stateside has proven to be a powerful market force.