Caesars Entertainment was recently part of one of the biggest casino mergers in the history of the gaming industry. Eldorado Resorts purchased the company’s stock for $17.3 billion. That deal closed earlier this year.
The new Caesars is now looking to acquire one of the biggest sportsbooks in the world. It tendered an offer worth $3.7 billion to purchase William Hill. Based in the UK, that offer was unanimously approved by the company’s board.
Apparently, this offer topped a rival bid from Apollo Global. To gain full approval, Caesars’ offer must be accepted by 75 percent of William Hill shareholders. If everything goes as planned, the deal would close in the first half of next year.
By buying one of the biggest companies in the sports betting industry, Caesars is trying to grab a bigger piece of the emerging US market. William Hill has already made some deep inroads in more than a few states offering legal betting on sports.
Industry experts believe that Caesars could generate between $600 and $700 million in sports betting revenue with the addition of William Hill to the lineup. The overall US market value is predicted to grow to $30 to $35 billion down the road.
Faced with uncertainty in the European market due to constant changes in gaming regulations, this move makes sound business sense for the UK-based company. William Hill has been the subject of possible mergers in the past but none of the deals ever came to fruition.
A few of those possible suitors were The Stars Group and 888. In the meantime, gaming giants such as Flutter Entertainment and the GVC Group have tipped the economies of scale in their favor.
In recent years, William Hill has invested heavily in the US market. Legal sports betting outside of Nevada came to New Jersey in May of 2018. This followed a favorable US Supreme Court decision that gave individual states the right to govern legal sports betting within their borders as opposed to the federal government.
The company is now the largest operator of sportsbooks in the US in a market where other sportsbooks such as FanDuel, Borgata, and BetRivers. William Hill already has a strategic partnership with Caesars to operate the company’s sports betting operations. The current split is 80/20 favoring William Hill.
Caesars has already made it clear that it is only interested in William Hills’ business in the US. If the deal goes through, the overseas’ operations are likely to be sold.
The UK business relied heavily on retail betting establishments. However, in recent years William Hill has diversified its business model while also expanding its reach and scale. This has created more opportunities for growth on a global scale.