William Hill predicts fast sports betting growth in Nevada
9 May 2011
By Chris Sieroty
LAS VEGAS, Nevada -- Is there anything else in Nevada William Hill PLC would be interested in buying?
Ask Ralph Topping, chief executive of the British bookmaker, and his immediate answer is, "No, nothing at this time."
His response isn't surprising, given that the company spent more than $53 million in less than a month to purchase three sports wagering companies in Nevada.
On April 14, William Hill purchased Las Vegas-based American Wagering Inc., the parent company of 72 Leroy's Horse & Sports Place sports books and kiosks, for $18 million, along with Club Cal Neva Satellite Race and Sportsbook Division in Northern Nevada for $21 million.
That was followed Tuesday with the $14.25 million purchase of Las Vegas-based Brandywine Bookmaking LLC, which operates 16 Lucky's sports books in Nevada.
William Hill expects licensing by Nevada regulators to be completed in 2012. Topping said he doesn't expect any regulatory issues to arise in relation to his Gibraltar gaming license.
"We are an extremely reputable business. We have been in business for 76 years," he said. "I think once (Nevada) regulators ... understand what William Hill does they'll be satisfied with our company."
The valuations placed on these companies reflect the growth of sports wagering in Nevada, despite a casino industry that's still sluggish after three years of recession.
"We haven't bought these companies for a quick profit," Topping said. "We are an old-fashioned company, managing these businesses for the long run."
Sports books in Nevada handled about $2.7 billion in 2010, according to state regulators. Gross gaming revenues last year were $151.1 million, only 5.5 percent of the total amount wagered.
The number of sports book locations, meanwhile, has grown by 11 percent in the past decade. That growth has been driven by football, which accounted for 43 percent, or $1.093 billion, of total wagers last year.
The British sports wagering industry is also driven by football, except the teams play with a round ball and have names like Arsenal or Manchester United, not San Diego or Pittsburgh.
Sports betting is more widely accepted in the United Kingdom, where bookmakers sponsor professional franchises. SBOBET, a sports betting firm in the Philippines, sponsors West Ham United, a team in the English Premier League. That's not allowed on this side of the pond.
Topping, who was named chief executive of William Hill in 2008, has a second job. He was appointed executive chairman of the Scottish Premier League in 2009.
"I think gambling is much more socially accepted in Europe," he said. "It's well known I love soccer."
It's also well known that being chief executive of a FTSE 150 company was attractive to the league.
"They had some issues and needed some direction," Topping said. "Our business is strongly regulated. The game is not at risk because the CEO of William Hill is chairman. If anything it benefits the league."
While most of the sports books in Nevada are associated with casinos, in Britain "betting shops" are on almost every corner.
William Hill operates 2,359 land-based sports betting locations across the United Kingdom. It also owns 71 percent of William Hill Online.
"We'll integrate the current management teams into William Hill," Topping said. "All three companies have strong management teams who are focused on their businesses."
But with the launch of American Wagering's mobile betting applications, new options such as in-game wagering and brick-and-mortar growth these companies needed the financial backing that William Hill could bring to Nevada.
The Nevada Gaming Control Board has approved American Wagering's sports betting apps for BlackBerry and Android smartphones. The next step, the company said, is to have regulators approve a new tablet application for Android.
Topping said he expects rapid growth of the sports wagering business in Nevada. He declined to discuss whether the Lucky or Leroy's brands will be replaced by the William Hill signature.
Topping spent the last three years strengthening William Hill's land-based business and turning the company into an Internet business. That effort has paid off: William Hill said net revenue from its online sports book jumped 54 percent in the first quarter compared with a year earlier.
A 62 percent rise in the amount wagered, which includes a 786 percent gain in mobile betting amounts, drove the increase, the company said. London-based William Hill generated net revenues of $1.8 billion and operating profit of $457 million in 2010.
Topping, 59, has worked for the bookmaker since 1973. He started in a betting shop near Glasgow, Scotland, and rose to group director of operations before replacing former CEO Dave Harding three years ago.
When asked about possible British touches being made to Nevada sports books, Topping said with a laugh, "We'll call everyone sir or ma'am. Every winner will be knighted ... little touches like that."