The investment community reacted Tuesday as if Caesars Entertainment’s $3.7 billion purchase of European sports betting giant William Hill was a “fait accompli.”
After United Kingdom-based William Hill said in a statement a British court had rejected the last remaining challenge by several shareholders opposed to the deal, gaming analysts said the transaction would close imminently.
Shares of Caesars jumped almost 4% prior to the opening of the Nasdaq and closed the day at $89.88, up $1.13 or 1.27%.
Jeffries gaming analyst David Katz told investors he expected Caesars to gain in value, “given this had been the more likely outcome.”
Caesars already owns 20% of William Hill US, the British company’s American subsidiary. Caesars CEO Tom Reeg told the Nevada Gaming Commission in March the casino giant only wants to own the U.S. operations for William Hill and plans to sell the international portion of the company soon after the deal closes.
Caesars Chief Financial Officer Bret Yunker told the Gaming Commission selling the international portion of William Hill would bring cash back into the company.
Las Vegas-based William Hill US operates more than a dozen branded sportsbooks at Caesars’ properties in Nevada, Iowa, North Carolina, and New Jersey, and has more than 170 retail locations across 14 states. William Hill will rebrand additional Caesars sports betting facilities and launch the Caesars Sports Book by William Hill mobile app.
Most of William Hill’s sportsbooks are not associated with Caesars and the operator has a 29% market share of the U.S sports betting business.
Macquarie Securities gaming analyst Chad Beynon told investors Tuesday Caesars, through the William Hill purchase, has a chance to grab a significant piece of the growing online sports betting and igaming space, which he estimates to be $19 billion business by 2025 and $37 billion by 2030.
“Caesars has also discussed $600 million to $700 million of revenues in 2021, but we believe this can grow to more than $2 billion in 2025, assuming mid-teens U.S. market share,” Beynon told investors, “Bottom line, we think the Caesars U.S. online sports betting and igaming business is worth roughly $10 billion.
The William Hill acquisition cleared federal antitrust concerns in December and was given a favorable vote by William Hill’s shareholders in November. All the required state regulatory bodies in the U.S. have approved the transaction, including Nevada.
Reeg said little about the William Hill purchase during the company’s quarterly earnings conference call on March 18 but was little more forthcoming with Nevada gaming regulators a week later.
One Nevada Gaming Commission member said on the record that William Hill currently accepts 46.1% of all sports wagers in Nevada and has 64.2% of sports betting locations in the state.
In addition to the Caesars properties, William Hill’s Strip presence includes Circus Circus and Sahara. Through the acquisition last summer of rival CG Technologies, William Hill took over sports betting at Venetian, Palazzo, Tropicana, and Cosmopolitan. William Hill US also operates sports betting in downtown Las Vegas at the Strat and Plaza.
The company employs more than 1,100 people. Joe Asher is the CEO of William Hill US.
Howard Stutz is the executive editor of CDC Gaming. He can be reached at hstutz@cdcgaming.com. Follow @howardstutz on Twitter.
