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William Hill US Mulling Over Merging with Caesars Online
By Jeff Osienya Sep 03, 2020 IndustryThe sports betting operations of William Hill U.S. and the online gaming business of Caesars are contemplating a publicly-traded joint venture. Should it happen, the newly formed entity could rake in a revenue of up to $700 million by next year.After completing its acquisition of CG Technology in Nevada on Tuesday, William Hill Plc is looking to merge its sports betting business in the USA with Caesars Entertainment Inc’s online operations.
The two companies were already long-time partners when Caesars became a 20% owner of William Hill U.S. 2 years ago after striking a deal with reno based Eldorado, which came to assume control of Caesars in July after the close of a multi-billion-dollar acquisition. Since the arrangement, William Hill had always foreseen the buyout of Caesars by its rival.
In an interview with Bloomberg, Joe Asher the Chief Executive of William Hill U.S. confirmed that his company was holding talks with Caesars about merging their sportsbook operations and the latter’s online gaming business. In the interview, Asher disclosed that;
Quote“There’s a lot of opportunity in there, and we think that we’ve got some really powerful assets in this space, so obviously it’s an ongoing subject of discussion … We’ve been riding on their coattails as they’ve been growing. Clearly, we bet on the right horse.”
Another Billion Dollar Merger in the Works
Should the discussions between William Hill U.S. and Caesars Entertainment Inc bear fruition, the combined operations could be valued somewhere in the range of $7 billion, at least according to Jared Shojaian a Wolfe Research analyst.
Moreover, Caesars also projected that the joint operations of the two gaming bigwigs could generate a whopping $700 million in revenue come 2021. Should it be listed on the Nasdaq as a separate entity, the market valuation would be more attractive perhaps even lucrative enough to come close to DraftKings Inc.’s $12 billion-plus worth.
In September 2018, the U.S. based arm of William Hill acquired exclusivity rights to operate the sportsbook facilities at Eldorado Resorts casino properties across the country. After taking over Caesars Entertainment Inc later in July, the partnership between the sportsbook operator and Eldorado grew bigger to include other iconic gaming venues such as Caesars Palace.
In the coming months, up to 15 more sports betting locations will be included under William Hill’s umbrella, including Harrah’s in Atlantic City, New Jersey, and the Horseshoe in Council Bluffs, Iowa. Combined with the properties that the sportsbook operator acquired after purchasing CG Technology in a deal valued at less than $50 million, William Hill U.S will now operate 170 retail sports betting facilities across 13 different states in the USA.
With the sports betting business currently facing challenges as a result of the Coronavirus pandemic that has now stalled college football as it did other sports in Q2 2020, interactive casino gaming has become the glue that is holding the industry together. In New Jersey, for example, online casino gaming brought in a revenue of $510 million for the state in July, which was triple the revenue that online sports betting had produced at $138 million.
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