Caesars Entertainment agreed on Wednesday to buy British-based gambling group William Hill for $3.7 billion to expand in the fast-growing U.S. sports-betting market.
Caesars Entertainment to Acquire William Hill for £2.9 Billion
It comes as no surprise that once the proverbial cat is out of the bag, the news always prove worthy of chasing or digging deeper into. Such is the case of the William Hill takeover by Caesars Entertainment Inc. This is not similar to the SBTech takeover by Draft Kings, but it seems that now large operators are taking charge and enforcing their share in the industry.
In our opinion, this takeover was bound to happen and there will be more coming as the large operators who have always been expanding, have also accumulated debt, and the current crisis hit them hard. Especially those dealing with retail.
William Hill has been struggling for a while now and have merged their UK retail and online businesses. Back then, William Hill also announced that the gradual closing of its Gametek office in Sweden had already started to simplify its operating structures.
So, little over 3 weeks ago, news started appearing, CNN Business published an editorial in which it heralded that Caesars Entertainment is in talks to buy William Hill in a deal that would value the British bookmaker at £2.9 billion ($3.7 billion) and underscore the size of the opportunity in online gaming and sports betting in the United States.
William Hill shares in London surged 41% on Friday to £3.10 ($3.94) per share, after the company said it had received offers from both Caesars and private equity firm, Apollo, suggesting that a bidding war could emerge.
But the stock pulled back on Monday, tumbling 11% after William Hill said it was “minded” to recommend the Caesars offer to shareholders. Caesars said it would be entitled to terminate the US joint venture agreement if Apollo bought the company. (source: CNN Business London)
This is when it gets more interesting, 888 Casino Shows Interest in William Hill’s European Business.
Even if Caesars Entertainment announced it has reached an agreement to acquire William Hill in a deal worth £2.9bn ($3.72bn), 888 CEO, Itai Pazner, suggested if an opportunity arose, the operator wouldn’t rule out expanding its business.
This is due to the fact that, Caesars Entertainment intends to focus on the US sports betting market and is seeking buyers for all William Hill’s non-US operations, including its UK and European businesses.
News outlets have reported that Caesars plans to sell William Hill’s UK and European branch networks, which have struggled before and during the pandemic under increased regulatory pressure to tackle problem gambling. William Hill announced the closure of 119 UK branches in August. This certainly would be an interesting turn of events, and those free betting tips would reach new heights.
The takeover will give Caesars, the operator of the Caesars Palace casino in Las Vegas, access to the burgeoning US sports betting market.
Such headlines would have not been announce if the US market would not have opened up for the gaming industry, as we see the American way being played out in front of our eyes. This is something that is not typical to Europeans, and the essence is in the phrase: “Let’s throw money at it and make it work”.
This is the reason many venture capitals and global corporations, who in the past have never have tied their business to the gambling space are now jumping in on the global movement. And they mean business by committing huge amount of cash.
The era for the gambling industry to become the next tech industry where these M&A news are already old news. It is just a matter of time until the gambling industry will reflect the Big Tech industries, where 4-5 mammoths control 99% of the industry. Will we see the rise of Google-like gambling companies that will take over the industry, or will we see more rivalry and fair competition?
As we’ve mentioned above, the opening of the US gambling industry has brought so many potential powers into play, one can only wait and see what happens.
William Hill US embraces Evolution
Certainly, the suppliers are standing with watering mouths as in such large companies, they can supply a whole chain which would be similar to working with maybe +100 smaller operators. In the Caesars/William Hill case, the winner is Evolution, as William Hill U.S. will use Evolution’s products everywhere it has a digital presence.
Initially, the solutions will be available in New Jersey, where Evolution has an iGaming studio in Atlantic City, before being rolled out to other locations. William Hill has a total of 113 race and sports gambling-related facilities across the country, including in Delaware, Florida, Indiana, Iowa, Mississippi, New Mexico, Rhode Island and West Virginia.
Given the merger with Caesars, this partnership might expand further.
Evolution has purchased NetEnt this year for around $2.5 billion, using money that came, in part, from a 97.5% increase in profit for the company over the first half of this year. Let’s see how this story unfolds and we are not at the end of 2020 yet.