William Hill gains access to 23 million US customers with Eldorado deal
Hills becomes exclusive sportsbook supplier for US casino chain in return for equity in William Hill plc and US
William Hill has inked a major new partnership with US casino operator Eldorado, providing the UK sportsbook operator with access to some 23 million new customers.
Under the terms of the agreement, Hills becomes Eldorado’s exclusive supplier of digital and land-based sports betting services as well as online gaming.
The deal gives Hills access to seven new states, in addition to the six it already has access to, and Eldorado’s customer base of 23 million people.
In return, Eldorado receives $50m of stock in William Hill PLC (equivalent to circa 1.6% of its market cap), subject to a three-five year lock up; a 20% stake in William Hill US and a share of profits from the new business.
The profit share percentages were not disclosed.
The partners said they will open William Hill sportsbooks in five properties across three states “within weeks,” including at The Tropicana in Atlantic City, a venue in West Virginia and three casinos in Mississippi.
“Partnering with Eldorado gives William Hill access to one of the largest and most attractive casino footprints with 23 million customers across multiple states,” said Philip Bowcock, William Hill CEO.
“This partnership provides extensive cross sell and profit growth opportunities to both parties. Together, 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 has run sportsbooks for Eldorado in Nevada since 2012, and said the structure of the new partnership meant their interest were closely aligned.
Eldorado CEO Gary Carano added: “We believe William Hill represents the gold standard in global sports betting and we are confident that our expanded partnership will be successful.
“We look forward to bringing the excitement of sports betting to customers across our growing platform of leading casino resorts, creating value for all shareholders.”
The agreement is for an initial 25-year term.
Eldorado’s is in the process of acquiring Tropicana Entertainment Inc., which will extend its reach to 26 properties in 13 states on completion which is expected in the fourth quarter of 2018.
Canaccord analyst Simon Davies said the partnership was “sensible”, adding: “Importantly, [Hills] can sign other deals with operators in other states, enabling it to build a genuinely national presence, as more states open up (with 20 to 25 states expected to have legalised by the end of 2020).”