Strategy

The Stars Group gains online access to 11 states with Eldorado deal

William Hill says the deal doesn't impact its own market-access agreement with Eldorado and will in fact receive the majority of revenue share proceeds

The Stars Group has agreed a market access deal with Eldorado Resorts that will give the PokerStars-parent company the option to operate online betting and gaming in all states where Eldorado operates casino properties.

The agreement currently covers 11 states, including current betting states West Virginia and Mississippi.

Stars is already live in New Jersey on Resorts’ license and will launch in Pennsylvania in partnership with Mount Airy.

Under the terms of the agreement, Eldorado will receive a revenue share from Stars’ online operation in the states, as well as $25m worth of Stars shares and an option for a further $5m in shares.

In return Stars get the ability to launch online betting, gaming and poker in relevant states and first skin access in states where Eldorado owns or operates more than one casino property and second skin access in all other applicable states.

The deal comes a couple of months after Eldorado announced William HIll as its “exclusive” supplier for land-based sportsbooks; a deal which saw Hills hand over 20% of its total US business, a local profit share and $50m in group stock.

Regulus Partners noted: “This deal would now appear to be exclusive from a land-based only perspective, making it potentially far less strategic than the price paid.

“Eldorado’s decision to hedge its bets is not only logical in a skins-led environment (pretty much everywhere beyond New York currently enacted or proposed), but also mirrors Boyd’s decision to enter a partnership with PPB, announced shortly after its MGM+GVC access deal.”

William Hill issued a statement after the announcement saying its own deal was unaffected and it would in fact benefit from the Stars agreement.

According to the statement, William Hill receives 50% of the Stars shares given to Eldorado and the first $25m of revenue share payable by Stars. Hills also said it receives the “majority” of the revenue share thereafter, while it remains Eldorado’s exclusive partner for land-based sports betting services.

Stars CEO Rafi Ashkenazi added: “We are excited to announce this agreement with Eldorado, one of the fastest growing regional gaming companies in the United States,” said Rafi Ashkenazi, The Stars Group CEO.

“This agreement establishes the foundation for our US strategy as we tactically pursue access to other key states and opportunities with potential media partners.”

Eldorado owns properties in Pennsylvania and New Jersey but has shown little enthusiasm for running its own online gaming sites.

Strategy

Latest