CrownBet Buys William Hill Australia for $244 Million
CrownBet bought William Hill‘s Australian operations for AUS$314 million (USD$244 million). William Hill Australia has been rumored to be up for sell recently, due to a new point-of-consumption tax proposed in several Australian states.
The move continues a period of consolidation in the online gaming industry, after a series of major buyouts over the past several months.
In February 2018, William Hill released a statement which criticized the 15% Point-of-Consumption taxes in South Australia, Western Australia, and Victoria. South Australia imposed a POCT last summer, while lawmakers in Western Australia and Victoria continue to debate a new gaming tax.
William Hill’s statement noted, “Given the credit betting ban in Australia and the likely introduction of a Point of Consumption tax in a number of states, it is clear that profitability will increasingly come under pressure.”
Stars Group Bought CrownBet
The Stars Group, owner of PokerStars, purchased a controlling interest in CrownBet last week. PokerStars is thus consolidating the Australian sports betting market.
The move is certain to fuel speculation that William Hill is in trouble. The UK’s second-largest sportsbook has missed out on several opportunities to consolidate its business and grab a bigger share of the market. Last year, William Hill expressed concern that Scientific Games bought NYX Gaming for C$775 million, but that sale went through.
William Hill Shifting to US Market
Last week, William Hill announced it would shift its focus from the Australian to the United States gaming market. The US sports betting market might be lucrative, if the US Supreme Court strikes down the Professional and Amateur Sports Protection Act (PASPA) with an upcoming decision.
The United States has 15 times the population of Australia, but Australia has a highly developed bookmaker regulatory framework, while dozens of US states would need to legalize sportsbooks before William Hill could expand.
CrownBet Buyout Talks with William Hill
William Hill Australia had been discussing a buyout with Crownbet since November 2017. The deal is significant for William Hill, one of the oldest sportsbooks in the world. William Hill Australia represented 7% of William Hill’s revenue and nearly 6% of adjusted operating profit in 2017.
The William Hill Australia gaming community includes 284,000 punters, between those who bet in betting shops, over the telephone, or through mobile betting apps. Australian authorities banned live/in-play betting, which was a blow to the many bookmaker sites of Australia, because such rapid-fire betting generated quick cash for the bookmakers.
PokerStars Returns to Australia
PokerStars left the Australian gaming market in September 2017, after the Interactive Gaming Amendment 2016 was passed by the Australian Senate in August 2017. The bill required international poker sites to leave the Australian market, or else face punishment from authorities in the United Kingdom, the United States, and Canada.
PokerStars wanted to deal itself back into the Australian market. With its purchase of Crownbet and William Hill Australia, it has done so in a big way. PokerStars would like to hedge its brand name recognition with successful sports betting operations, as it can drive online poker players to its bookmaker operations through well-placed ads and well-placed links on its poker sites.
Crownbet’s Amazing Growth
Crownbet is the fastest-growing online bookmakers in Australia. Launched in a joint venture between Crown Resorts and Matthew Tripp in 2014, the online sports betting site has shown tremendous growth year-to-year. Founder Matthew Tripp, who continues to own 38% of CrownBet, said the company made back its startup capital by November 2015. After pulling back on its television advertisement — including a famous ad campaign starring actress Nicky Whalen (pictured above), the company’s profit began to skyrocket.
In a 2016 interview, Matt Tripp said, “We broke even on a monthly basis in November and have kept that up every month since. While that’s only been four months, I think we will be profitable for the rest of the year. That is ahead of where we thought we would be.”
Since that time, CrownBet has continued to show steady revenue growth. Once again under the overall direction of Aussie billionaire James Packer, Crown Resorts wants to focus on its land-based Australian operations, though, so it sold the business to Stars Group in the last few days.