Online sportsbetting site CrownBet has beaten out Sportsbet in the race to acquire William Hill’s Australian division. The deal, worth AU$300 million (US$234 million), was announced by Hill in a filing to the London Stock Exchange on Tuesday morning.
The deal will cement CrownBet’s position as the third-largest operator in the market, behind Sportsbet and Tabcorp, the former Victorian government monopoly.
“We made no secret about our plans to grow through the acquisition, and we’re pleased to have prevailed here against stiff competition,” said CrownBet CEO Matthew Tripp, who added that today is “a momentum shift for CrownBet and the marketplace.”
It’s been quite a week for the homegrown Australian online sport outfit. Last Tuesday, PokerStars parent the Stars Group (formerly Amaya) acquired a 51 percent controlling stake in CrownBet from land-based casino giant Crown Resorts.
Four suitors were initially chasing William Hill Australia. The group, which included Ladbrokes and Bet365, was whittled down last week to CrownBet and Paddy Power-owned Sportsbet. But CrownBet always seemed like the logical fit: unlike Paddy Power, it doesn’t compete with William Hill in markets outside of Australia.
The sands are shifting in the Australian sports betting landscape. It’s a reflection of tighter regulatory controls imposed on the market, as the industry seeks consolidation, bracing itself for the impending point of consumption tax.
William Hill chose to sell its Australian arm, largely because of the federal government’s ban on credit betting, which went into effect at the beginning of February. The group was forced to write-down the value of the business, declaring a $333 million impairment charge, which dragged its profits into the red.
The operation had taken higher levels of credit betting than its competitors, CEO Philip Bowcock said during an earnings call last month.
“The disposal follows a strategic review of the business, launched in January after its profitability came under increased pressure due to the recent credit betting ban and the likely introduction of a point of consumption tax,” Bowcock said in Tuesday’s filing.
“[It] will allow William Hill to focus on continuing to grow our UK online and US businesses, particularly as we prepare for the decision on the PASPA appeal due in 2018,” he added.
William Hill is hopeful that a favorable US Supreme Court decision on PASPA, the federal law that prohibits state-sanctioned sports betting in all but four grandfathered-in states, will open up the US market where the bookmaker is already established through its operations in Nevada. This has the potential to handsomely offset the loss of its Australian business.