William Hill US will oversee the sports betting operations for Eldorado Resorts through an agreement that will give the regional casino operator a 20 percent ownership stake in the bookmaker. The stock has a value of $50 million.
The agreement, announced early Wednesday morning, was first reported by United Kingdom-based SkyNews. The transaction offers William Hill a larger share in the growing U.S. sports betting market. The company, which operates sports betting at more than 100 locations in Nevada, has launched sports books in Delaware, New Jersey, Mississippi and West Virginia.
Eldorado, which is in the process of acquiring the casino operations of seven casinos in six states from Tropicana Entertainment, currently has 21 casinos in 11 states.
William Hill US and Eldorado will co-develop sports books and add the infrastructure needed for mobile and online wagering. The companies expect to focus initially on New Jersey, Iowa, Mississippi and West Virginia. In a statement, Eldorado said it expects its casinos in West Virginia and Mississippi to be ready for sports betting this NFL season.
William Hill has operated the sportsbooks at Eldorado’s Reno resorts since 2012.
“Based on our long-term experience with sports betting we are confident that sports betting will bring new customers and a new revenue stream to our regional properties while serving as a significant revenue driver for our existing gaming and non-gaming businesses,” Eldorado CEO Gary Carano said in a statement.
Eldorado’s 20 percent equity stake in William Hill US includes all of William Hill US’ existing businesses in Nevada, New Jersey, Delaware, Iowa, Mississippi, West Virginia, along with The Bahamas and St. Kitts, as well as future Eldorado and non‐Eldorado U.S. business. William Hill US generated adjusted operating profits of $28.5 million in 2017.
In a statement, William Hill PLC CEO Philip Bowcock said the UK-based bookmaker wanted to partner with a casino operator with a “large and growing footprint” across the U.S.
Both William US and Eldorado had items pending in front of the Nevada Gaming Control Board Wednesday, but nether company was asked about the pending transaction. Control Board Chairwoman Becky Harris said the regulators were informed about the deal on Tuesday.
The transaction will require regulatory approval in several states as well as federal anti-trust approval.
Analysts said the agreement benefits both Eldorado and William Hill.
“The deal looks very much (if not exactly) like the way Eldorado wanted to structure its sports betting business,” Union Gaming Group analyst John DeCree told investors.
Deutsche Bank gaming analyst Danny Valoy said the deal gives Eldorado a “tangible avenue to participate in the broader U.S. sports betting opportunity given William Hill’s existing and expanding U.S. footprint with a clear path to monetization.”
Eldorado is acquiring the operating assets of seven Tropicana-owned casinos in six states from corporate raider Carl Icahn. in partnership with real estate investment trust Gaming and Leisure Properties. The deal has a total value of $1.85 billion. Eldorado President Thomas Reeg told the Nevada Gaming Control Board the transaction could close by Oct. 1.
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgamingreports.com. Follow @howardstutz on Twitter.
