The investment community responded as if Caesars Entertainment’s $3.7bn purchase of European sports betting giant William Hill was a “fait accompli.”
Gaming analysts predicted the agreement would close soon. It was after William Hill said in a statement that a British court had rejected the last remaining challenge by many shareholders opposed to the deal.
Before the Nasdaq opening, Caesars shares jumped nearly 4%, closing the day at $89.88, up $1.13 or 1.27%
Jeffries gaming analyst told investors he anticipates Caesars to increase in value, “given this has the more likely outcome.”
Caesars also holds 20% of William Hill U.S., a subsidiary of the British company. In March, Caesars CEO Tom Reeg told the Nevada Gaming Commission that the casino giant only wants to own William Hill’s U.S. operations. The international portion of the business will be sold shortly after the deal closes.
Caesars Chief Financial Officer told the Gaming Commission that selling the international portion of William Hill would increase profit.
According to Macquarie Securities gaming analyst Chad Beynon, Caesars has a chance to catch a significant piece of the growing online sports betting and igaming market. He expects its worth to be $19 billion by 2025 and $37 billion by 2030, thanks to William Hill’s purchase.
“Caesars has already addressed $600 million to $700 million in revenue in 2021,” Beynon told investors. “But we assume this will rise to more than $2 billion in 2025, assuming mid-teens U.S. market share.”
“In the end, we believe Caesars’ online sports betting, and igaming business in the United States is worth about $10 billion,” he added.
William Hill’s acquisition
William Hill shareholders approved the William Hill acquisition in November and cleared federal antitrust concerns in December. All the required state regulatory bodies in the U.S. have approved the agreement, including Nevada.
During the company’s quarterly earnings conference call on March 18, Reeg said little about the William Hill purchase. But he was little more forthcoming with Nevada gaming regulators a week later.
William Hill currently supports 46.1% of all sports wagers in Nevada. He also has 64.2% of sports betting sites in the state, according to a Nevada Gaming Commission member.
More than 1,100 people work for the company. William Hill U.S.’s CEO is Joe Asher.