William Hill Eyes Caesars Online Gaming After Cantor Sports Deal

(Bloomberg) -- British bookmaker William Hill Plc completed its purchase of CG Technology, the sports-betting outfit spun off from Cantor Fitzgerald LP, and will now shift its focus to merging its U.S. business with the online casino operations of longtime partner Caesars Entertainment Inc.

Joe Asher, U.S. chief executive officer for William Hill, confirmed the company is in discussions with Caesars about combining their sports-betting and online-gaming businesses. Caesars already owned 20% of William Hill’s U.S. arm under in a deal cut two years with Eldorado Resorts Inc., which took over Caesars in July.

“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,” Asher said in an interview.

Combined, the U.S. sports and online-gaming operations of the two could generate $700 million in revenue next year, Caesars said previously. As a separately listed entity, it could sport an attractive market valuation at a time when industry leader DraftKings Inc. is worth more than $12 billion.

“William Hill is our partner solely on sports betting,” Caesars CEO Tom Reeg said in a July interview. “You’d be gathering all our your mobile assets, both sports and online. That would be ideal.”

Exclusive Deal

William Hill acquired exclusive rights to run the sports-betting operations at Eldorado’s casinos in September 2018. The latter’s takeover of Caesars in July extended their deal to iconic properties like Caesars Palace. About 15 additional locations should be added in coming weeks, including the Horseshoe in Council Bluffs, Iowa, and the Harrah’s in Atlantic City, New Jersey. They would bring William Hill’s total to 170 retail locations in 13 states, the company said.

William Hill always assumed Eldorado might end up owning Caesars, Asher said. “We’ve been riding on their coattails as they’ve been growing. Clearly, we bet on the right horse.”

Jared Shojaian, an analyst with Wolfe Research, said Caesars and William Hill’s combined U.S. online operations could be worth $7 billion. Another option would be for Caesars to acquire all of William Hill, Shojaian said, but a more likely outcome would be a publicly traded joint venture.

“We think creating a separate entity with a public float helps showcase a valuation not currently in the stock,” the analyst said in a research note Monday.

Online Casino

Recently, London-based William Hill introduced online casino betting in New Jersey. With sports betting challenged by the Covid-19 pandemic and many colleges canceling fall football, online gaming has proved to a big winner. Through July, online casino betting produced $510 million in revenue in New Jersey, for example, more three times that of sports betting at $138 million.

The CG Technology purchase, which took effect Tuesday, was valued at less than $50 million, according to people familiar with the terms, and included funds related to previous litigation between the companies.

While the deal ends the sports-betting aspirations of a storied Wall Street firm, it represents a new chapter for William Hill and Asher, who used to work at Cantor, giving the company sportsbooks in some of Las Vegas’s better-known resorts, including the Cosmopolitan, the Venetian and the Tropicana.

“We didn’t have a big footprint on the Strip,” Asher said. “Now we’ll have a much bigger presence and some of the top properties.”

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