The original Mr William Hill would be amazed at the development of the company he founded back in 1934. Hill started his business taking illegal bets in Birmingham and during his lifetime saw off-course betting legalised in 1960, and the subsequent rapid growth in the industry prior to his death in the early 70’s. In late April the company he founded was acquired by US company Caesars Entertainment (itself owned by Eldorado Resorts Inc since 2020) for the princely sum of £2.9 billion.
Caesars’ primary interest in William Hill centres on the latter’s US operation, William Hill US, which was formed in 2012 and operates across Washington D.C and 17 states. William Hill US is the largest sports betting provider in the States, with over 150 locations, and the deregulation of the US market provides a platform for significant future growth. Sports betting is legal in 26 states so far and US investment bank Morgan Stanley reckons that a further 13 states will legalise betting in the next four years, in part driven by the need to drive up tax revenues.
William Hill US was an attractive acquisition for its digital sports betting technology and its existing market share in the United States. Caesars Entertainment fought off US rival Apollo Asset Management to secure the overall purchase of William Hill, but has no interest in its UK and European operations. Accordingly, the Las Vegas-based company has just announced that it intends to trigger a major sell-off of these assets, estimated to be worth £1.5 billion, which comprise over 1,400 shops in the UK together with sites in several European countries.
In spite of the recent difficult trading climate in the UK, the continuing trend for mobile gambling, and the increasing regulation of the betting and gaming industry – which has led, for example, to a £2 limit of FOBTs in shops, several companies are expected to be interested in the sell-off. At the moment hats have not been publicly thrown into the ring so it is unclear who will bid and for what, but we expect interest once more from Apollo Asset Management who already own Gamenet, an Italian gambling operator. Whether that interest will extend to the bricks and mortar operations, or just the online business is not yet known.
The CEO of online gaming operator 888 Holdings, Itai Pazner, has recently confirmed that William Hill’s online operations “could be an interesting asset for us…we’ll definitely be looking at it”. The company, based in Gibraltar and founded by Israeli entrepreneurs over 20 years ago, may not be so interested in the betting shops, with Pazner adding “I think it’s too early to say. There has been a shift to online in the past year, but there are benefits to owning betting shops.” Market analysts believe 888 itself could be a target acquisition but the company position is clear – it will continue to grow organically or through acquisition and any approach will be dealt with on its merits.
Companies with existing retail shops in the UK may also be interested in William Hill’s shops but must be mindful of UK competition law which seeks to ensure competitive markets are maintained. For that reason, Fred Done’s company, BetFred, may be out of the running for a large-scale acquisition as the company already operates over 1,500 shops in the UK. Paddy Power, Ladbrokes and some independent operators may also be interested in cherry-picking the prime locations that will fit with their current shop portfolios.