Caesars Entertainment, one of the largest casino operators in the United States, has recently agreed to purchase William Hill, a British based gambling group.
The purchase will drastically expand the sports betting market in the US and will provide players with even more great ways to place wagers and generate payouts as they enjoy legal sports wagering online.
Sports betting in the US has become hugely popular since it was legalized in 2018 and many gambling companies are looking to European expertise to help with expansion across the country. Caesars’ acquisition of William Hill will combine the largest casino company with the best British sportsbook operator. While negotiations are still taking place, the deal is expected to close in 2021. First, it will be subject to regulatory approval from the Nevada Gaming Control Board as well as the Nevada Gaming Commission.
William Hill Purchase Cost
Caesars and William Hill have reached a purchase agreement and Caesars will be making the purchase for a total of $3.7 billion. To help finance this massive transaction, Caesars has plans to raise $1.7 billion through equity offerings and use $1.3 billion of cash that is on hand. If the whole deal goes through as planned, Caesars and William Hill will combine to become a sports betting powerhouse in the US. The two companies already operate as a US joint venture at 20% and 80% in equity ownership.
There are still some things that need to be done before the sale is complete. In addition to regulatory approval, the deal will have to be approved by at least 75% of the shareholders of William Hill. Voting is expected to take place in December.
After the announcement of the purchase, stock prices increased for both companies, with Caesars up to 8% at just over $57 per share and William Hill up over 40%.
William Hill Struggling in the UK
The purchase offer has come at a great time as William Hill has had a rocky year in the UK. While this is one of the leading bookmakers in the United Kingdom, it has been hit hard with the COVID19 outbreak and has seen some huge declines in the past few months. Since many sports events had been canceled or postponed, sports betting took a back burner, leading to losses suffered by William Holl. The company has announced they will permanently close 119 stores in the UK, following a decrease in profits in the first half of the year.
The purchase will allow William Hill to gain more popularity in the US as the two companies partner to create a powerful betting platform for US residents. The British company has already been focused on the US market since online betting was legalized in 2018. William Hill has benefited from a presence in the US, but in the UK, things are quite different.
The company had many betting shops throughout the UK that became unprofitable with a 2018 UK crackdown on the number of stakes that could be charged at betting terminals. In addition, taxes for online betting rose and gambling advertising was curtailed, so this purchase is a great way for William Hill to exit the UK and develop a strong presence in the US. Besides the US, William Hill will still be targeting non-regulated countries, like Finland. They offer different Finland casinos like EuroGrand and William Hill casino club.
How the Purchase Could Impact Bettors
The actual purchase will not affect how bettors will be able to place bets or what markets or bet types are offered. However, it will lead to an expansion of the brand, allowing more online betting sites to emerge in states where online wagering is legal. One thing that may change is the loyalty rewards that are being earned by current members. William Hill does not have a loyalty program for sports betting at this time, but with the merger with Caesars, the company would be able to access the Caesars brand loyalty program, offering more perks for bettors.
Some other things that could change include the offering of a unified customer experience since applications and wallets will be consolidated. Caesars customers will also begin to benefit from the expertise that William Hill has in the sports betting industry and will be able to take advantage of an established technology program. Overall, the purchase will result in a better experience for customers and a wide range of betting options as there will be more sites operating in states where betting is legal.
The expertise that the British company has will complement the current offerings at Caesars and will allow all customers to have a better experience and enjoy a solid sports betting platform. With the growing popularity of online sports betting in the US, this purchase comes at a great time and people all over the US continue to wager on their favorite sports as they start to resume activities after recent COVID-19 restrictions.
The purchase also allows the alignment with media companies that will improve the chances of attracting new customers and increase excitement and loyalty. At this time, Caesars has a relationship with ESPN while William Hill is dealing with CBS Sports.