British gambling company William Hill is pushing hard to eat up market share in the USA. A possible online gambling merger with Caesar’s is its latest attempt to accomplish that. The London-based bookmaker, William Hill, has recently purchased CG technology, the sports-betting firm that was once aligned with Cantor Fitzgerald LP. Now that the deal is done and dusted, it has its sights firmly set on Caesar’s. If this online gambling merger goes through, it could present a real challenge to some of the big boys in the sportsbook industry.
William Hill and Caesar’s have already done business together. We reported last month that William Hill looks set to take over Caesar’s sportsbook operations in New Jersey. That news came on the back of another story we broke that Caesar’s had merged with Eldorado Resorts. What has now become clear, is that Caesar’s and William Hill have big plans together, both online and in the casino.
Big Opportunities and Powerful Assets
Speaking to Bloomberg about this potential online gambling merger William Hill’s U.S. Chief Executive Joe Asher spoke about the possible opportunities this will present:
“There’s a lot of opportunity in there, and we think that we’ve got some really powerful assets in this space, so obviously it’s an ongoing subject of discussion,”
This online gambling merger is still very much in the early stages and Asher was tight-lipped about what the future would look like for both companies. Wolfe Research analyst Jared Shojaian, however, has talked about the possibility of a 50/50 online gambling merger. He believes that this deal would see William Hill make use of Caesar’s iGaming and sports wagering tech.
If this merger were to take place, the two companies would look at a deal that involved a 40% stake given to each party, with the remaining 20% sold off to investors.
An Online Gambling Merger To Create a Power Couple
William Hill already has a sportsbook in the US, which we reviewed here. It is operational in New Jersey. Much like William Hill, Caesar’s also has an online option for its casino, reviewed here, which begs the question what the two could gain from such a merger.
At first blush, this merger makes little sense. However, when you look into the numbers, everything becomes clear. Caesar’s is already trying to enter the sports wagering industry; with an online gambling merger with William Hill, it can easily do just that. When combined, the pair could see revenues of $700M next year.
If these two are able to become a power couple, getting investors on board would be a cinch. The expectations are that, if this online gambling merger is successful, the deal with William Hill could see Caesar’s worth rise to around $7B, bringing the casino closer to industry leaders DraftKings, which is currently worth around $12B.
Making Themselves Investable
We reported last month that Caesar’s saw a jump in stock price value following JP Morgan’s announcement that both the industry and the company are safe investments. The merger with Eldorado and a possible online gambling merger with global sports betting giant William Hill will position Caesar’s perfectly for the future.
In what has been a challenging year for Caesar’s resorts, these mergers come at a welcome time for both the company and its investors. It is completely understandable why both parties would be relatively quiet about how this potential deal will look. It is no secret that this is an industry of one-upmanship and any details revealed too early could certainly affect the deal in a negative way.
Given the successes of FanDuel and DraftKings, both powerhouses in the industry, it is no surprise that competitors will attempt to team up and combine forces in order to eat up a large portion of market share. That is just what Caesar’s and William Hill will seek to do with this deal.