Caesars Entertainment’s quest for additional ways to profit from sports betting and iGaming could lead to an increasing partnership with William Hill.
“We believe there are numerous options on the table pertaining to this structure and reconciling it with an opportunity that is beneficial for both parties,” Deutsche Bank gaming analyst Carlo Santarelli said in a research note September 22.
Roth Capital Partners gaming analyst David Bain echoed those sentiments, according to CDC Gaming Reports.
“A Caesars and William Hill interactive partnership spinoff in the public equity markets is likely to happen this year, well ahead of investor expectations,” Bain wrote also on September 22.
Sports betting has become one of the primary growth opportunities since the $17.3 billion merger between Eldorado Resorts and the former Caesars Entertainment. In 2019, the Reno-based Eldorado bought a 20 percent stake in William Hill U.S. for a 25-year agreement in which William Hill operates sportsbooks in the company’s casinos in Nevada and in regional markets. With the merger, William Hill added 12 sportsbooks in New Jersey, Iowa and Nevada.
Pending regulatory approval, the remainder of Caesars sportsbooks will join the William Hill fold. The mobile sports betting app, Caesars Sports Book by William Hill, expects to show up soon in Indiana, Pennsylvania, New Jersey, and Nevada, again depending on regulatory approvals.
Bain told investors that Caesars and William Hill could end up in a 50-50 ownership split, including William Hill U.S.
“The intent is to then create an independent company through the sale or distribution of new shares of the business in the public equity markets, in our view,” Bain said.
Everything is on the table, Santarelli said.
“Management expects to have the strategic elements of the vertical in place by year-end,” Santarelli said.
If the market ends up pushing the deal into the first quarter of next year, Bain said, “It would still be well-ahead of investor expectations and draws a transformational catalyst into sight.”
William Hill U.S. could operate as many as 170 retail locations across 13 states.
