Caesars to Buy William Hill for $3.7 Billion
One of the world’s largest gaming companies is about to become even larger. On Monday, Caesars Entertainment, Inc and William Hill PLC revealed that they’ve reached an agreement that will see Caesar’s purchase William Hill for $3.7 billion.
The deal will add the world’s leading sportsbook to Caesar’s popular global brand. It is also likely that we will soon see William Hill become a top-tier sportsbook in the United States once all regulatory approval is met.
Caesars to Purchase William Hill
A joint statement was released by both companies on Monday. Caesars will buy all of William Hill’s stock at $3.45 per share. This is a premium of 81% of the average stock price from the three months prior to September 24, 2020. Furthermore, the acquisition will give Caesars control of the joint partnership in the United States between the two companies.
Presently, William hill has a 32% revenue share in Nevada and is working on expanding into other legal US states for sports betting and online casino gambling. According to Tom Reeg, Caesars CEO, “The opportunity to combine our land based-casinos, sports betting and online gaming in the US is a truly exciting prospect. William Hill’s sports betting expertise will complement Caesars’ current offering, enabling the combined group to better serve our customers in the fast-growing US sports betting and online market.”
For William Hill, things are business as usual for now as the company works to make final preparations on the deal. According to Roger Devlin, Chairman of William Hill, “This is the best option for William Hill at an attractive price,” he said. “It recognizes the significant progress the William Hill Group has made over the last 18 months, as well as the risk and significant investment required to maximize the U.S. opportunity given intense competition in the U.S.”
Caesars Positioning Itself to Be Major Player in US Sports Betting Market
This move is a wise one by Caesars, especially considering the potential for sports betting across the United States. Now that sports betting is legal nationwide, states have been quickly legalizing the activity. Even states like Virginia have legalized sports betting.
This presents a unique opportunity for companies as the US sports betting market is still in its infancy. Caesars stated the following in the Monday press release, “Caesars believes that the sports betting and online gaming sector represents one of the largest areas of growth in the US gaming industry.”
According to some analysts, the US market may be worth up to $35 billion. To give an example of its popularity, the American Gaming Association released information claiming that almost 35 million adults will bet on NFL games this season. That’s 13% of American adults.
And that’s based on current market conditions. Only about a fifth of US states has legal sports betting or have approved it. Over time, this number will grow. As the market grows, the number of adults wagering on the NFL or other sports will grow.
How Much Business Will William Hill Take From FanDuel and DraftKings?
DraftKings and FanDuel have been major players in the US sports betting market to this point, but this takeover by Caesars will change all that. William Hill is an established and recognized name in global sports betting and gambling.
Furthermore, both William Hill and Caesars have relationships with ESPN, CBS Sports, and even the NFL. This alone will help to make Caesars and William Hill the premier sports betting company in the eyes of fans.
Also, William Hill are experts at sports betting and their processes will improve the customer experience for sports bettors in the United States. While they won’t put DraftKings and FanDuel out of business, they will surely take away a sizable market share in the coming year.
Of course, we are looking to the future as the deal is still subject to regulatory approval and stockholder approval. This will not happen until the second half of 2021. However, it is unlikely that either company will have any significant roadblocks to approval.