You are here
William Hill ups US stakes with Eldorado sports betting deal
BRITAIN'S William Hill expanded further into the United States on Wednesday, signing a 25-year sports betting deal with casino operator Eldorado Resorts Inc.
William Hill shares rose by as much as 5.2 per cent on news of the third such US deal in just over a month, which follows a US Supreme court ruling in May lifting a ban on sports betting and opening the door to states regulating the industry.
A crackdown in its British home market on gambling machines and stakes has driven a 19 per cent fall in William Hill shares this year and encouraged it to look to the US for growth.
Other betting firms have made similar moves, with GVC Holdings last month announcing a venture with hotel and casino operator MGM, while a Dublin-based unit of Paddy Power struck a deal with Boyd Gaming in July.
Industry researchers GamblingCompliance estimate that US online sports betting will be worth US$3.1 billion in revenue by 2023 as more states follow Nevada in regulating the sector.
"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," William Hill chief executive Philip Bowcock said in a statement.
William Hill US, in which Eldorado will take a 20 per cent stake, is already the largest sports betting business in the US, operating 108 race and sports books in Nevada as well as the state's leading mobile sports betting app.
Under the terms of the deal, William Hill will pay US$50 million in stock to Eldorado, subject to a three to five-year lock-up, as well as a share of profits from its licences.
"William Hill's share price has fallen too far and today's deal serves as a reminder that the group has an interesting option in the US as well as more challenged businesses in the UK," analysts at Peel Hunt said. REUTERS