US casino giant Caesars Entertainment announced plans to significantly ramp up investment in the sports betting space and become a leading sportsbook operator nationwide. Having completed the $3.7 billion acquisition of UK-based sports betting company William Hill in late April, Caesars is now ready to offload its non-US assets.
Sale Should Be Complete This Time Next Year
According to Caesars CEO Tom Reeg, the casino operator is set to launch the process of selling William Hill’s non-US business in the next 2 months, looking to find a suitable buyer by the end of the year and close a deal within 12 months.
“One of my pet peeves when I was an investor was companies that didn’t know what they were good at. And I can’t tell you we’re good at running a non-U.S. digital business.”Tom Reeg, CEO, Caesars Entertainment
Caesars believes a price in the region of $2 billion is more than achievable for the non-US assets of the acquired sportsbook operator, with proceeds from the sale paying down debt.
“I can tell you that there are almost certainly people out there that will do it better than us and see opportunity there. And I can deploy that capital into businesses that I know will drive better returns to shareholders.”Tom Reeg, CEO, Caesars Entertainment
The sale of William Hill assets outside of the US will undoubtedly stir interest as private investment fund Apollo Global Management and Gibraltar-based gaming group 888 Holdings are rumored to be ready to compete for the lucrative business.
Rebranding William Hill Sportsbooks to Caesars
Besides selling the non-US business of William Hill, Caesars is going to rebrand its US retail sportsbooks to Caesars and its sports betting app to Caesars Sports and then merge both of its apps on William Hill’s platform with a single wallet solution.
One of the reasons to get rid of William Hill’s non-US business was the conservative approach of its UK investors regarding leverage, Caesars CEO noted, saying the reality requires Caesars to invest “considerably more than has been invested historically”.
“You shouldn’t expect us to be just throwing money away to buy market share. You should expect us to build this thoughtfully, but you should expect to see a significant increase in investment in this side now that we’ve got all our ducks in a row.”Tom Reeg, CEO, Caesars Entertainment
Encouraged by the success of BetMGM, coming “from a position similar to where William Hill was”, to acquire a leadership position due to its large customer database, Caesars is now focusing efforts on marketing its sports betting product, prepared to invest in sports betting up to $100 million in free cash flow every month.