Breaking Down the William Hill-Eldorado Resorts US Sports Betting PartnershipBy Robert H. Mann | Published: September 5, 2018 at 11:13 am
In a surprise announcement late Tuesday, William Hill and Eldorado Resorts jointly revealed they had reached a wide-ranging partnership agreement through which the British-controlled bookmaking giant would operate all the major regional casino company’s sportsbook operations in the U.S., and that Eldorado would take a 20 percent stake in William Hill’s U.S. operation, as well as a minor stake in the company’s worldwide operation.
Word of the deal was first reported by the British news outlet Sky News. Soon after the Sky News report, an official statement was released to the media.
William Hill and Eldorado are calling the agreement “a nationwide partnership for digital and land-based sports betting and online gaming in the United States.” William Hill now becomes Eldorado’s exclusive partner in the provision of digital and land-based sports betting services as well as online gaming. The online gaming element to the deal is apparently a new wrinkle in William Hill’s U.S. business model, which had previously focused strictly on sports wagering.
Wide-Ranging Partnership Between William Hill and Eldorado Resorts Puts Bookmaker Into 11 States for Mobile and Retail Sports Betting
William Hill US retains 80 percent of the enhanced business while Eldorado receives $50 million in stock in William Hill PLC (equivalent to about 1.6 percent of its market capitalization), subject to a 3-5 year lockup, in addition to the 20 percent stake in William Hill US and a share of profits attributable to its licenses.
The official announcement says capital investment in sportsbooks in five existing casino properties would begin shortly with expenditures jointly shared between the partners.
The agreement is for an initial 25-year term, the announcement said.
William Hill now has quickly gained access to 13 states where sports betting is either legal or where sports betting bills are soon to be adopted, or at least under consideration. Those states include Colorado, Illinois, Iowa, Louisiana, Mississippi, Missouri, Nevada, Ohio, Pennsylvania and West Virginia.
Eldorado has 21 properties across 11 states and a customer base of 23 million people. The rapidly growing Reno-based company is awaiting final regulatory approval to take over several Tropicana Entertainment Inc. casinos, which will soon increase Eldorado’s footprint to 26 properties in 13 states. That deal, which does not include the Tropicana in Las Vegas, is expected to close in the fourth quarter of 2018, pending regulatory approval.
Within weeks, the newly established partners will open William Hill sportsbooks in five properties across three states – The Tropicana in Atlantic City, N.J.; The Mountaineer Casino Racetrack and Resort in W. Va., and three casinos in Mississippi – The Lady Luck Casino in Vicksburg, Isle of Capri in Lula, and Tropicana Casino in Greenville.
William Hill US, under U.S. CEO Joe Asher, has had a working relationship with Eldorado since 2012 as operator of the company’s Grand Sierra Resort in Reno.
Philip Bowcock, William Hill PLC Chief Executive Officer, said: “Partnering with Eldorado gives William Hill access to one of the largest and most attractive casino footprints with 23 million customers across multiple states. This partnership provides extensive cross-sell and profit-growth opportunities to both parties. Together we are positioned to capture the evolving U.S. opportunity – starting with land-based sports betting, and extending to digital sports betting and, in some states, online gaming.”
Gary Carano, Chairman and Chief Executive Officer of Eldorado Inc., said, “Having worked with the company since 2012, we believe William Hill represents the gold standard in global sports betting and 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.”
William Hill is up and running in New Jersey, taking sports bets at Monmouth Park Racetrack and at the Ocean Resort Casino in Atlantic City. It is also the risk manager for the sports lottery in Delaware, has sportsbook partnerships in numerous casinos in Mississippi, and recently announced its position as risk manager in Rhode Island in conjunction with IGT, where IGT supplies sports betting technology and services to the state lottery.
There had been recent industry speculation that William Hill US would align itself most heavily with Penn National Gaming, this country’s largest regional casino operator. Although William Hill will apparently have some outlying deals with Penn National in Mississippi and West Virginia, it remains unclear if any other deals would now be consummated.
Eldorado, listed as ERI on NASDAQ, is controlled by Alex Meruelo, 64, who has led his Meruelo Group holding company in various, diverse acquisitions including a Los Angeles Spanish-language television station and, more recently, the troubled SLS casino/resort on the Las Vegas Strip.