William Hill US partners with Eldorado Resorts
5 September 2018
(PRESS RELEASE) -- William Hill PLC today announces that William Hill US and Eldorado Resorts, Inc. have entered into a nationwide partnership for digital and land-based sports betting and online gaming in the United States.
The partnership combines the leading sports betting company in the U.S., William Hill, with the extensive market access of Eldorado - a major casino group with 21 properties across 11 states and a customer base of 23 million people. Eldorado’s pending acquisition of Tropicana Entertainment Inc. will further extend its reach to 26 properties in 13 states on completion which is expected in the fourth quarter of 2018.
Under the terms of the agreement William Hill becomes Eldorado’s exclusive partner in the provision of digital and land-based sports betting services as well as online gaming. As a result, William Hill’s reach now extends to 13 states where sports betting is either legal or sports betting bills are tabled.
Within weeks, the partners will open William Hill sportsbooks in five properties across three states - The Tropicana Atlantic City Casino & Resort
in New Jersey; The Mountaineer Casino, Racetrack & Resort
in West Virginia and three casinos in Mississippi - The Lady Luck Casino
in Vicksburg, Isle of Capri Casino - Lula
and Trop Casino Greenville
. Sportsbooks in additional casinos and states, as well as digital betting and gaming services, will be launched in the months ahead, subject to the legislation in each state.
William Hill PLC and Eldorado, who have partnered since 2012 in Nevada, are strongly aligned to grow William Hill U.S. with the company currently involved in discussions with a number of potential partners.
Commenting on the agreement Philip Bowcock, William Hill PLC Chief Executive Officer, said, “Partnering with Eldorado gives William Hill access to one of the largest and most attractive casino footprints with 23 million customers across multiple states. 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.”
Gary Carano, Chairman and Chief Executive Officer of Eldorado Inc., commented, “Having worked with the company since 2012, 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.”
Key features of the partnership:
- William Hill becomes Eldorado’s exclusive partner for digital and retail sports betting. The agreement also covers the provision of online casino.
- The partnership extends the reach of William Hill US and covers Eldorado’s 26 properties across 131 states, plus any new properties it may acquire or develop.
- William Hill US retains 80% of the enhanced business, retaining strategic flexibility with both parties incentivized to grow digital and land-based sports betting in the U.S.
- Eldorado receives $50 million of stock in William Hill PLC (equivalent to circa 1.6% of its market capitalization), subject to a 3-5 year lock up; a 20% stake in William Hill US and a share of profits attributable to its licences, closely aligning the two partners’ interests.
- Investment in sportsbooks in five existing casino properties set to begin imminently with capital expenditure jointly split between the partners.
- The agreement is for an initial 25-year term.
The partnership follows the Supreme Court decision in May that declared the Professional and Amateur Sports Protection Act (PASPA) unconstitutional. Since then William Hill, which currently operates 108 race and sports books in Nevada and the state’s leading mobile sports betting app has achieved the widest footprint of any sports betting operator in the U.S. It is now:
- Operating in New Jersey at Monmouth Park Racetrack, where it took the first legal bet in that state in June 2018, and at the Ocean Resort Casino in Atlantic City;
- The exclusive risk manager for the sports lottery in Delaware;
- The sportsbook partner in 13 casinos in Mississippi where it expects to be the market leading operator;
- The exclusive partner to IGT in Rhode Island where it supplies sports betting technology and services to the state lottery;
- Taking bets in West Virginia where the first bets were taken on 30 August; and
- Set to open a sportsbook in Pennsylvania in the coming weeks.
The commencement of operations under this agreement are subject to relevant anti-trust and gaming regulatory approvals. Completion is expected following the necessary approvals. The transaction constitutes a class 2 transaction for the purposes of the U.K. Listing Rules. For the purposes of the LR 10.4.1 R (Notification of class 2 transactions), the value of the gross assets of William Hill US is $68.5 million and William Hill US generated adjusted operating profits of $28.5 million in 2017. William Hill PLC has a market capitalization of £2.1 billion.
As part of the agreement, Eldorado will receive initial consideration of $50 million in William Hill PLC shares, which are subject to an initial three- to five-year lock-up period, as well as a 20% shareholding in William Hill US. This business includes William Hill’s operations in Nevada, New Jersey, Delaware, Mississippi, Rhode Island, West Virginia and Iowa as well as its operations in the Bahamas and St Kitts, and all future Eldorado and non-Eldorado U.S. business. Eldorado also has the right to convert its William Hill US shareholding into William Hill PLC shares at market value on the occurrence of certain vesting triggers or during an agreed future exercise window after five years. William Hill has the right to settle the conversion amount due to Eldorado in cash or shares at William Hill’s discretion.
As noted above, under the terms of the transaction, William Hill PLC will issue 13,376,135 new Ordinary Shares of 10p each to Eldorado, representing $50 million (the Consideration Shares). The Consideration Shares will rank pari passu with the existing ordinary shares of the Company. Applications will be made for the Consideration Shares to be admitted to the premium segment of the Official List and to be admitted to trading on the London Stock Exchange's main market for listed securities (Admission). Admission will occur at the completion of the transaction.