William Hill Enters Colombia with Alfabet Purchase

Posted on: December 28, 2020, 07:04h. 

Last updated on: December 28, 2020, 08:40h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Sportsbook operator William Hill (OTC:WIMHY) is broadening its horizons in Latin America by purchasing a majority position in Colombian gaming firm Alfabet S.A.S.

William Hill Alfabet
A William Hill sportsbook in the US. The company is buying a majority stake in Colombia’s Alfabet. (Image: CNN)

Financial terms of the deal weren’t disclosed, nor was the size of the British bookmaker’s stake in the South American company.

Cali-based Alfabet, which procured its first Colombian gaming license in 2018, provides iGaming and sports wagering services under the BetAlfa brand.

Colombia, the first Latin American country to establish a European-style licensing system, has been very progressive with their gambling regulations over the last few years, and industry analysts believe there is strong growth potential within the regulated gambling market in the country,” according to a statement issued by William Hill.

Colombia has awarded 20 permits to operators over the past several years, confirming that there’s plenty of competition there. But the market is nonetheless compelling for gaming companies, because the country is the fourth-largest in Latin America as ranked by GDP, trailing only Brazil, Mexico, and Argentina.

Bookmakers Targeting Latin America

William Hill’s BetAlfa deal is the latest in a series of Western sportsbook operators pushing into Latin America. Earlier this month, FanDuel, a unit of Flutter Entertainment Plc (OTC:PDYPY), said it’s partnering with CAGE Sports BV to pursue sports wagering licenses in the region and the Caribbean.

The companies expect to be operational in the region in the first half of next year, with Barbados and Bermuda being the first markets in which they go live. Entain, another William Hill rival and the company formerly known as GVC Holdings Plc, also announced Colombia plans earlier this month.

Industry observers speculate that the recent interest in Latin America on behalf of European gaming companies is perhaps more about Brazil than the markets these firms are currently entering.

Brazil is widely viewed as the golden goose of gaming expansion in the region. Home to Latin America’s largest economy and population, Brazil is a sought-after market for integrated resort operators and sportsbook firms alike. The country legalized fixed-odds sports betting in December 2018, but licensing and regulatory protocols have yet to be determined.

That process could be sped along, as the country’s Council of the Investment Partnerships Program (PPI) seeks new revenue-generating avenues due to the cash crunch caused by the COVID-19 pandemic. It’s not clear how many sports licenses the country will award, but showing regional expertise could be advantageous for operators such as William Hill.

How Caesars Fits In

Caesars Entertainment (NASDAQ:CZR) is currently in the process of acquiring William Hill for $3.69 billion, a deal that the target’s board already approved.

The statement on the Alfabet transaction doesn’t mention Caesars, and that’s likely by design, because the Nevada-based gaming company is widely expected to shed William Hill’s international units when the deal is finalized.

The UK company’s European operations, which could command $2 billion or more in a sale, are seen as the crown jewel in a Caesars divestment. But adding in Latin American exposure could bring more potential buyers into what’s expected to be a competitive bidding pool. It’s not yet clear how swiftly Caesars will move to sell William Hill’s international business.