Online gaming company 888 Holdings has expressed an interest in William Hill’s European assets, following the buy-out of its US assets by Caesars Entertainment.
Recently, William Hill’s board of directors unanimously recommended Caesars’ $3.7 billion cash offer be accepted, making it highly likely the deal will go ahead.
However, Caesars has stated it has no interest in William Hill’s European assets and has indicated it would seek to sell off that division.
Following the William Hill earnings call announcing the board’s decision, Itai Pazner, 888 Holdings CEO, observed that the European assets could possibly be something for 888. However, he also said that it was too early to say for sure.
“We’re going to look at any asset that could be relevant to us. Within that list, if the opportunity to buy William Hill’s assets comes our way, that could be relevant,” Pazner said. “We’re following what’s happening very closely.”
Not the First Time 888 Looked at William Hill
This isn’t the first time that a deal to combine 888 and William Hill has been proposed. In 2015, William Hill made a move to buy 888 Holdings, but the $900 million offer was reportedly rejected by company founders the Shaked family.
Just a year later, the position was reversed when 888 Holdings teamed up with the Rank Group in a $4.3 billion bid for William Hill. That offer was rejected.
That offer came just a few weeks after the William Hill board had fired its CEO, James Henderson. The bid was criticized by the William Hill board as being too low and “opportunistic”, and without a CEO, the board felt the company was in a vulnerable position.
Retail Sportsbook Closures
While William Hill’s US operations are the real deal for Caesars, William Hill’s European assets could actually be more valuable. In fact, Truist analysts estimate the value between $2 billion and $4.5 billion.
The company’s European assets are comprised of nearly 1,400 retail sportsbooks in the UK, and digital assets in the UK, as well as Sweden, Italy, and Spain.
However, the retail sportsbooks are likely not of interest to 888, which is an online-only operation. This is especially true in the UK, where William Hill was forced to close 700 retail sportsbooks last year, due to a reduction in the maximum stakes on fixed-odds betting instituted by the UK government.
Moreover, William Hill has permanently closed 119 outlets due to the COVID-19 lockdown. Furthermore, the company says it doesn’t expect that gamblers will return in the same pre-pandemic numbers.
The Pandemic Lockdowns Helped 888
While new UK gambling regulations and the pandemic lockdowns hurt William Hill, in contrast, 888 saw increased action with its 888online gambling products. During the lockdown, nearly all online casinos and sportsbooks saw a surge in profits.
Pre-tax profits for 888 Holdings were up 130% to $50.9 million year-over-year in the first six months of 2020. Revenue also jumped 37% to $379 million, thanks partly to 888’s popular online poker tournaments.
Shares of 888 Holdings increased by nearly 25% in recent morning trading on the London Exchange, with 888 stock climbing more than 260% since the start of the pandemic and ensuing lockdowns.
Caesars Purchase of William Hill Could Equal Market Dominance
Solidifying its brick-and-mortar presence in Las Vegas and 60 regional gaming markets, Caesars’ purchase of William Hill represents a perfectly logical leadership move.
The William Hill deal is a strategy to form a dominant wallet for Caesars’ already massive customer base of 60 million. Whether someone with Caesars’ loyalty points is on a trip to Las Vegas, Reno, or any one of its 60 properties spanning 13 states, it‘s all one wallet.
The William Hill sports betting brand has been around for decades and is trusted by sports bettors, which means Caesars will not have to spend much advertising money on customer acquisition.
Sports betting through William Hill retail sportsbooks as well as mobile apps in states where it’s legal and Caesars has a presence will feed a steady flow of rewards customers to play slots, rent hotel rooms, dine, shop, and see shows.
States in which Caesars owns properties and where sports betting is legal including New Jersey, Mississippi, Indiana, Pennsylvania, and of course, Nevada, where William Hill already has over 100 retail sportsbooks.