Sportsbook Battle Brewing as William Hill Believes Eldorado Pact Entitles it to Caesars Sports Betting Operations
Posted on: June 28, 2019, 06:00h.
Last updated on: June 27, 2019, 11:26h.
William Hill, one of the largest operators of sportsbooks, is angling for Caesars Entertainment Corp.’s (NASDAQ:CZR) sports wagering business and the UK-based company may have a point.
Eldorado Resorts, Inc. (NASDAQ:ERI), the company that said earlier this week it is acquiring Caesars for $17.3 billion, has a long-standing relationship with William Hill. That partnership was bolstered with a September 2018 agreement, the terms of which include William Hill gaining exclusive rights to operate sportsbooks at all of Eldorado’s US properties.
These rights apply to casino properties owned or managed by Eldorado when the strategic partnership was signed and any subsequent acquisitions,” said William Hill in a statement issued earlier this week. “Therefore, the rights apply to casinos currently owned or managed by Caesars if Eldorado’s acquisition of Caesars is completed.”
Even before news of the Eldorado offer for Caesars was officially revealed on Monday, it is believed William Hill was angling to get in on the action in some way or another.
A Jilted Lover?
Earlier this month, Casino.org reported that Caesars and William Hill held merger talks last year that could have created a $7.6 billion company, but those talks deteriorated amid slack sales at some of Caesars’ Las Vegas properties and the failure of the two sides to agree on financial terms.
William Hill’s pact with Eldorado is lengthy. Under the terms of the deal, the sportsbook operator will run Eldorado’s sports betting offerings for 25 years and the contract gives William Hill the right “to operate mobile sports betting in states where Eldorado obtains a license,” according to the statement issued by the British company.
It is easy to see why William Hill wants to ensure it gets its hands on Caesars’ sportsbooks. Even when accounting for recently announced sales, Eldorado and Caesars own approximately 70 casinos across the US. The number is likely to dip as those companies look to avoid too much geographic duplication.
However, Eldorado and Caesars have exposure to some lucrative mobile gaming markets, such as New Jersey, and areas where sports betting has recently been approved, including Illinois.
What Caesars Says
Caesars, the operator of Caesars Palace, which is home to one of the Las Vegas Strip’s most popular sportsbooks, isn’t saying much regarding the Eldorado/William Hill deal.
“William Hill suggested that under their agreement with Eldorado they may have certain rights to operate sportsbooks at Caesars properties or on behalf of Caesars,” said Caesars in a recent filing with the Securities and Exchange Commission (SEC).
The filing included some talking points that appear aimed at pepping up the company’s sportsbook staffers, including “the most important task is to continue focusing on executing our plan, serving our customers, and delivering positive results” and “your individual and team commitment are critical to the success of our sports betting business.”
Looking to allay potential concerns among employees, Caesars also said in the filing it will keep staff updated about William Hill’s agreement with Eldorado as the Eldorado/Caesars deal proceeds. That transaction is expected to close in the first half of 2020.
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