Caesars has formally agreed to acquire William Hill for a sum of $3.7 billion.
William Hill, one of the five virtual casinos in Illinois, secured market entry by partnering with the Grand Victoria Casino in Elgin, which is owned by Caesars.
This is our current understanding of the agreement and how it could affect sports betting in Illinois.
All in on playing games online
Caesars, a leading entertainment company in the country, wanted to broaden its range of products.
This agreement seems to have achieved that.
Tom Reeg, CEO of Caesars Entertainment, expressed in a press release that the opportunity to combine our land-based casinos, sports betting, and online gaming in the US is an extremely exciting prospect.
The agreement is expected to be finalized in the next quarter of 2021. Prior to the acquisition, Caesars owned a 20% stake in William Hill, resulting in the partnership between Grand Victoria and William Hills.
Caesars has actively been seeking online partnerships, and this deal has the potential to broaden its presence in this space. Although William Hill has a partnership with CBS Sports, it also has a longstanding alliance with ESPN.
Caesars anticipates that its recently launched sports and online gaming division will generate between $600 million and $700 million in net revenue within the US in 2021.
Roger Devlin, who serves as the chair of William Hill, declared:
The William Hill board believes that this option offers the greatest value for shareholders at a fair price. They recognize the significant progress made by the company in the last year and a half, as well as the risks and substantial investment required to capitalize on the opportunities in the US market amidst intense competition and potential regulatory challenges in Europe, the UK, and other regions.
Additionally, William Hill’s virtual casinos may potentially be rebranded under the powerful Caesars brand due to its strong recognition, although this has not been confirmed.
Although William Hill is headquartered in Illinois, it appears to have minimal marketing efforts compared to other casinos.
Maybe it held off on launching any major promotional campaigns until the deal was confirmed.
Until last week, William Hill was possibly the least exciting of Illinois’ five online sportsbooks. However, there is now a definite reason for curiosity.
Caesars will buy off non-US companies
According to the press release, the entertainment industry intends to sell off William Hill’s assets globally, except those in the US.
It is affirmed that we have confidence in the strong future of our UK and International organizations. We intend to work with Caesars to find suitable partners that will help these companies achieve their long-term growth potential.
In the first six months of 2020, 93% of the group’s revenues came from those assets.
This includes the UK retail house, the company’s global division, and William Hill UK online, which collectively generated around $575 million in revenue in 2019.
Additional advantages for Caesars
The Caesars have been busy, with their recent acquisition of William Hill being just one example.
In July, the merger of Eldorado and Grand Victoria Casino was finalized, making Caesars the new owner of the casino that Eldorado had acquired in 2018.
Caesars currently holds ownership of Harrah’s Joliet and Harrah’s Metropolis in Illinois, with neither casino currently offering a retail sportsbook. If they choose to pursue licensing, William Hill is ready to partner with them.
Furthermore, Caesars is known for its loyalty program, which has around 60 million members.
Another appealing aspect of the offer is the smooth integration and uniform user experience between the online sportsbook and casino.
Caesars’ share price rose by 3% in pre-market trading after the announcement.
