Back on the Table: William Hill and Caesars Entertainment merger is “subject of discussion”
Joe Asher, CEO of William Hill’s US division, has confirmed this week that the British bookmaker may be looking to merge its US operations with that of US land-based casino giant Caesars Entertainment PLC.
“There’s a lot of opportunity in there, and we think that we’ve got some really powerful assets in this space, so obviously it’s an ongoing subject of discussion,”Mr. Asher told Bloomberg News on Tuesday.
The pair reportedly came close to a deal in 2019, but Caesars backed out in the final stages.
Since then, Caesars has merged with Eldorado Resorts in a $20 billion deal. Eldorado had 20% shares in William Hill, for whom it provides US online gambling operations.
That existing relationship undoubtedly provided extra incentive for the two giants to get even closer together now.
Combined, William Hill and Caesars online operations are predicted to generate nearly $700 million over the next few years.
WH has been working with Eldorado for nearly three years.
According to Mr. Asher, top brass at the British bookmaker were confident that Eldorado would become the biggest player in the US casino game eventually.
“We’ve been riding on their coattails as they’ve been growing. Clearly, we bet on the right horse,” he said.
Almost despite the ongoing Covid-19 Coronavirus pandemic, 2020 has been a crazy year so far for big gambling deals.
Not only have Caesars and Eldorado merged, but the Stars Group and Flutter Entertainment became the world’s biggest online gambling company when they came together in April.
This year also saw live casino supplier Evolution Gaming buy out huge Swedish developer NetEnt in a $2 billion deal.
The renewed interest in a William Hill and Caesars merger comes at a time when much of the global economy is on uncertain ground. With supply chains and business disrupted all over the world by the pandemic that has now killed 864,000 people in just six months, global sports betting and land-based casino gaming was severely curtailed – and even canceled entirely in many cases.
It was only a couple of months ago that we reported renowned credit agency Moody’s had downgraded William Hill’s rating to a Ba3 – representing what it called “a substantial credit risk.”
On the other side of the deal (and the Atlantic), Caesars itself hasn’t had a great financial year either.
Just this month, it reported a loss of $100 million on its land-based operation despite pulling in $126 million in revenue. Although its casinos are now fully reopened, making them COVID-19-secure and safe must have cost a lot of money.
Many staff members are also on furlough, and limited numbers of players are allowed in most venues across the US. Caesars is even facing a legal battle from unions in Atlantic City that say its hotels and kitchens aren’t applying pandemic rules correctly.
Still, it seems casino operators are confident that the short-term growth in the online casino sector (where there are legal markets) can offset the decline in land-based revenues.
Many markets, such as New Jersey in the USA and Australia, have seen significant growth numbers in the online casino area since the onset of the pandemic back in March.
It’s hard to see why these two giant companies would be considering a merger if they weren’t confident in each other’s future outlook.
Keep checking our pages for the latest on this developing story, plus many more hot topic issues from the online casino world.