- Caesars Entertainment is in the process of buying UK sports betting giant William Hill.
- William Hill is the largest bookmaking company in Nevada with over 100 locations.
- In Caesars Q3 earnings call CEO Tom Reeg indicated that the William Hill brand would live on for third party sportsbooks.
There was plenty of interesting news coming out of the Caesars Entertainment Q3 earnings call on Thursday, November 5. We’ve already discussed plans to reopen the Rio Las Vegas by the end of 2020 though the longterm status of the property remains unknown. Another interesting topic that drew the most questions from the financial media was Caesars impending purchase of UK sports betting giant William Hill. Although CEO Tom Reeg was limited in how many specifics he could offer with the deal yet to be finalized he did provide some information on how the William Hill brand would be managed.
There was a lot of ‘housekeeping’ in the call–not surprising since it was the company’s first earnings call since the company merged with Eldorado Resorts in a deal finalized on July 20. Eldorado Resorts was the surviving corporate entity though they assumed the Caesars Entertainment name. Eldorado had a sportsbook partnership deal in place with William Hill and they assumed recently assumed control of the former Caesars sportsbooks. This partnership is what set the wheels in motion for Caesars to acquire William Hill.
CEO Reeg gave an overview on the status of the William Hill purchase which is now pending a shareholder vote on November 19:
As I said the (Eldorado/Caesars) merger closed on July 20. So obviously that was during the quarter. Also we announced an acquisition — cash offer to acquire William Hill during the quarter for 272 pence per share, that shareholder vote will take place on November 19 as is the case — as needs to be the case under UK takeover code, we cash confirmed the entire amount for that transaction, including an equity offering, that was just shy of $2 billion on October 1 of this year. We entered — we expanded our relationship with ESPN in the quarter, on the sports betting side, which we think is an exciting piece per customer acquisition for us. We’ve got a co-exclusive link out across all ESPN channels with DraftKings and we’re excited with what that will bring to the table.
The William Hill branding has started to appear at the Ceasars Entertainment properties in Las Vegas but based on a comment from Reeg later in the call they might not be there for long. Morgan Stanley analyst Thomas Allen asked about synergy opportunities that have been found since the Eldorado/Caesars merger was completed. Reeg gave a fairly length reply after which Allen asked a follow up question about sportsbook branding. Check out Reeg’s reply:
You should expect that we will use the Caesars brand for Caesars operated, owned and operated properties. And for third-party properties, you should expect that the William Hill brand will live on in the US.
So it sounds like the sportsbooks in Caesars Entertainment properties will no longer have the William Hill branding. Looking at the individual property’s websites the William Hill name is conspicuous by its absence. For example, the Cromwell Las Vegas:
The Cromwell has just recently reopened and when Caesars announced the property’s return in a press release they made a semi big deal about the rebranded William Hill Sportsbook:
Additionally, The Cromwell offers the newly branded William Hill Sports Book, with new customer offerings that include self-service sports betting kiosks and an expanded betting menu featuring LIVE InPlay Wagering.
Ditto Planet Hollywood which reopened in early October. The press release made a big deal of the William Hill rebranding :
The newly branded William Hill Race & Sports Book with new customer offerings that include self-service sports betting kiosks and an expanded betting menu featuring LIVE InPlay Wagering.
The William Hill branding was in full display when the property was reopened (see feature photo) but now the PH website refers to the generic sounding ‘Las Vegas Racebook & Sportsbook’. Once again, the William Hill name is nowhere to be found:
It isn’t clear if the sportsbooks will adopt a moniker like ‘Caesars Sports’ or just keep these generic names.
The second part of the answer is more interesting–the William Hill name will still be used for the many third party sportsbooks the company operates. It’s hard to tell if they’re planning to stay in the sportsbook management business longterm or not. They’ve no doubt got contractual arrangements with the individual properties that it will take some time to unwind. This could go either way. On one hand, it would give them another revenue stream but on the other hand Caesars could decide that they need to focus on their ‘core competency’ of running their own properties. Most likely, they just haven’t figured the whole thing out yet. There’s a lot they could do from selling the sportsbook management component to spinning it off to extricating themselves from the third party management business and closing it down.
The other side of the arrangement is also intriguing. All of a sudden there’s a lot of casinos who have their sportsbook run by a company that is either directly or nominally a competitor depending on their market niche. Smaller, independently run casinos like the Crystal Bay in Lake Tahoe might not care that a Caesars subsidiary is running their sportsbook. Likewise, a smaller gaming company like Fifth Street Gaming–owners of the Downtown Grand, Lucky Club and Silver Nugget–probably wouldn’t sweat it too much either. The OYO Hotel & Casino is owned by India based hospitality giant OYO but they probably don’t view themselves as being in direct competition with Caesars.
Larger gaming companies might have more of an issue with it. William Hill took over the sportsbook at The Venetian and The Palazzo owned by Las Vegas Sands as part of their buyout of CG Technology (the former Cantor Gaming). Can’t see Sheldon Adelson being too pleased about this situation. What about the William Hill presence at the ubiquitous PT’s Pub chain in Southern Nevada? They’re owned by Golden Entertainment who owns a number of properties in Nevada and Colorado including The Strat in Las Vegas. They’re definitely not at Caesars level yet but they’re a growing company that might take issue with a competitor in the sportsbook.
One of the strangest situations would involve the M Resort in Las Vegas–William Hill took over the operation of the sportsbook from CG Technology in 2019. The M is now owned by Penn National Gaming who *definitely* would consider Caesars a direct competitor. The M website has already been scrubbed of any references to William Hill and the only indication that the property has a sportsbook is this blurb about a ‘state of the art race and sportsbook’ on the casino page. It’s a far cry from the early days of Cantor Gaming when the M Sportsbook was arguably the most influential in town.
You have to think that Penn National would want to rebrand the M Sportsbook and the Tropicana Sportsbook as Barstool Sports locations. The company opened the first Barstool retail location in Colorado last week at Ameristar Black Hawk. Unlike the almost nonexistent reference to the M’s sportsbook they’ve got Barstool front and center on the Ameristar website in the form of a huge banner on the main page:
There’s obviously a lot of other transitional issues related to the William Hill purchase for Caesars Entertainment to work through. It’ll be interesting to see what happens and maybe once the deal is finalized we’ll get some more clarity on the situation. They’ve got a lot of options with the various moving parts of the William Hill brand and there’s too many scenarios to even speculate. Stay tuned.