Some have been wondering why Caesars Entertainment is putting the future of one of its major venues – Caesars Palace on the Las Vegas Strip – on stake, while trying to negotiate a major takeover deal with William Hill, especially considering the fact that the UK bookmaker has been facing some difficulties in its home market and is still not being much present in the US.
The acquisition offer made by Caesars Entertainment has valued the UK gambling company at approximately £2.9 billion and comes after a rival bid from Apollo, a US-based private equity group. Tom Reeg, the chief executive officer of the company, has described a potential deal as a truly exciting opportunity for his company.
Despite being one of the largest bookmakers in the UK, William Hill has for some time trailed larger industry competitors. Having that in mind, some analysts would probably say that William Hill is too small of a prize for a massive casino conglomerate such as Caesars Entertainment but the truth is that the UK bookmaker could be crucial for the further development of the casino giant into the US sports betting and online gambling market.
Unlike the UK, where sports betting services have been available for more than a century, sports betting in the US has become a legal form of gambling only recently, after in 2018 the US Supreme Court decided to overturn a previous federal ban on the practice outlawing it outside the state of Nevada.
William Hill Was the First UK Bookmaker to Lay Foot on the US Gambling Market
After the recent legalisation of sports betting services in the US, the newly-opened market has marked rapid growth. For example, the first state to make sports betting legal after the US Supreme Court’s decision, New Jersey, revealed that the amount spent on the practice in August 2020 totalled $668 million, which is more than double the amount spent over the same period a year earlier.
As revealed by The Financial Times, H2 Gambling Capital has provided estimates that if online gambling and sports betting are legalised in all US states, the total market size would be worth $10 billion. Other analysts have even said that the overall market size could be as much as $35 billion. Now, the state governments across the country to make gambling legislation a priority so that tax receipts generated by the practice are boosted.
In this case, the expertise of William Hill in operating sports betting services and online casino operations in an already mature and functioning European market would be extremely important for Caesars, which would have to start basically from scratch before being able to take advantage of the opportunities offered by the sector.
Apart from that, William Hill has become the first UK bookmaker that laid foot on the US market back in 2012, when it purchased a betting operation in the state of Nevada for the price of $50 million. Currently, the UK bookmaker offers sports betting in a total of 12 states across the US, which has been estimated as the largest geographical reach of any sports betting operator. Previously, it has revealed that it expects to start operation in two more US states by the end of 2020.
Currently, a 20% stake in William Hill’s US business is being held by Caesars Entertainment as part of a joint venture under which the UK bookmaker has been given the right to offer sports betting in the 54 casinos operated by Caesars across the US.
Caesars Entertainment has quickly moved to establish a presence in new markets. Earlier in September, it revealed that it would be the only provider of sports betting odds to ESPN.
- Author
Olivia Cole
