The extent of the opportunities of business in online gaming and sports betting in the United States will be underscored by potential deal to acquire William Hill by Caesars Entertainment in a deal that would value the British bookmaker at £2.9 billion or $3.7 billion. The negotiations for the deal are currently at an advanced stage.
A price of £2.72 or $3.45 per share of William Hill, which equated to an 81 per cent premium to the stock’s average price over the three months to September 24, could be offered by the casino operator, the two companies said in a joint statement on Monday. Control of their US joint venture will be available for Caesars from the deal. A 32 per cent share of revenue in the Nevada sports betting market is enjoyed by it, William Hill says. It has also said that it is also rapidly expanding into other states of the US.
“The opportunity to combine our land based-casinos, sports betting and online gaming in the US is a truly exciting prospect,” Caesars CEO Tom Reeg said in the statement. “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.”
Prior to the novel coronavirus pandemic hitting the US, the business of sports betting was already booming there. This was because of a US Supreme Court order in 2018 that paved the way for the legalization of sports betting in states outside Nevada. There was a boost ot online gambling because of the months long shutdown of casinos even while lockdowns severely disrupted large sports events. That helped prop up stocks of companies such as DraftKings and Flutter Entertainment. Las Vegas casinos reopened in June.
It is estimated that about 35 million people, or 13 per cent of all American adults will place bets on the NFL this season, according ot the estimates of the American Gaming Association.
“Caesars believes that the sports betting and online gaming sector represents one of the largest areas of growth in the US gaming industry,” the company said in the statement, citing analyst estimates valuing the market at up to $35 billion.
There was however a speculation that there could be a bidding war for William Hill after the company said it had received offers from both Caesars and private equity firm, Apollo. This news helped the shares of the company to surge by as much as 41 per cent in London on Friday. However on Monday, after the company it was “minded” to recommend the Caesars offer to shareholders, the stocks of the company dropped by 11 per cent.
“The deal, if it’s approved, isn’t expected to close until the second half of 2021, at a time when the sporting calendar on both sides of the Atlantic is expected to be back in full swing,” senior investment and markets analyst at Hargreaves Lansdown Susannah Streeter said in a note to clients.
(Adapted from CNN.com)