William Hill strikes gold with Eldorado

William-Hill
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With the UK retail market stagnant in the wake of government regulation, William Hill has set its sights across the Atlantic in a major distribution agreement with Eldorado.

William Hill has confirmed a partnership with US casino operator Eldorado in a bid to establish its place in the country’s nascent sports betting market.

The Nasdaq-listed operator, valued at $3.7bn and responsible for 21 casinos across 13 US states, will receive 20 percent stake of the UK bookmaker as part of the deal to distribute William Hill’s wager services both online and via its land-based venues.

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“Partnering with Eldorado gives William Hill access to one of the largest and most attractive casino footprints with 23 million customers across multiple states,” said William Hill CEO Philip Bowcock.

“This partnership provides extensive cross sell and profit growth opportunities to both parties. Together, we are positioned to capture the evolving US opportunity – starting with land-based sports betting and extending to digital sports betting and, in some states, online gaming.”

The partnership is set to go live across three states “within weeks,” with Eldorado also taking on £50m worth of restricted William Hill stock.

Though William Hill had already established a sports betting presence in New Jersey, Mississippi and West Virginia, the latest agreement will see the bookmaker significantly increase its US exposure.

“Having worked with the company since 2012, we believe William Hill represents the gold standard in global sports betting,” said Eldorado chairman and CEO Gary Carano. “We are confident that our expanded partnership will be successful.”

“We look forward to bringing the excitement of sports betting to customers across our growing platform of leading casino resorts, creating value for all shareholders.”

The deal follows a $200m agreement between Ladbrokes owner GVC and casino operator MGM Resorts, announced on 30 July, which will see the company establish a sports betting network in Nevada, before expanding into the 15 states expected to imminently legalise the practice.

Though the US sports betting market is set for a boom, William Hill’s progress in the UK retail market has continued to plateau.

Following the British government’s capping of FOBT maximum stake, the bookmaker reported a loss of £802m for H118, following a £915m accounting charge, pushing profit down 13 percent to £96m.

The operator added that the restrictions could reduce its high street revenues by 45 percent, with 38 percent of its retail points rendered unprofitable, and 900 betting shops in danger of closure.

At the time of the report, Bowcock, eying the potential for American expansion, predicted that the firm’s US business “could be bigger than the UK.”

“The US population is seven times that of the UK and they like to gamble more, I think. Gambling is seen as part of everyday life, you’re not a social pariah if you enjoy it.”

In the wake of the Eldorado partnership announcement, shares in William Hill jumped 6.22 percent on the FTSE-250 index.


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