Caesars Entertainment completed its long-awaited merger with Eldorado Resorts on Monday in a $17.3 billion deal that will create the largest casino and entertainment company in the U.S.
The transaction is expected to have major implications for the retail and mobile sports betting industry nationwide, as the combined company owns or operates casinos in 16 states, including gambling hotbeds such as Nevada, New Jersey, Pennsylvania, Mississippi, and Louisiana among others. As part of Eldorado’s acquisition, William Hill U.S. will take over the sportsbook operations within Caesars’ properties, Las Vegas gambling publication Gaming Today reported.
“We are pleased to have completed this transformative merger, thus making us the premier leader in gaming and hospitality. We look forward to executing on the numerous opportunities ahead to create value for all stakeholders,” Caesars Entertainment CEO Tom Reeg said in a statement.
Eldorado Resorts completed its $17 billion acquisition of Caesars to create a new powerhouse in the casino industry https://t.co/ZA7NnUb0ik
— Bloomberg (@business) July 20, 2020
The scope of Caesars’ sportsbook operations nationwide
While the timetable for William Hill’s apparent takeover of Caesars’ sportsbook operations is immediately unclear, Caesars’ vast casino portfolio contains sportsbook properties in a handful of states (Nevada, New Jersey, Pennsylvania, Mississippi, Iowa, Indiana, and New York). As of last September, Caesars Entertainment operated sportsbooks in at least 29 locations in the aforementioned states.
Although William Hill has approximately 100 locations in Nevada, many in the form of kiosks inside pubs across the state, their presence is more limited on the famed Las Vegas Strip. Following the anticipated takeover, William Hill could add retail books at The Linq, Paris Las Vegas, Bally’s Las Vegas, Planet Hollywood Las Vegas, and Caesars Palace, which contains a 7,900-square-foot Race & Sportsbook inside the iconic property. Caesars Entertainment also runs numerous other brick-and-mortar sportsbooks in other states which have legalized sports betting over the last two years.
Other potential sites for new William Hill online/retail sportsbooks:
- Harrah’s Atlantic City
- Harrah’s Gulf Coast (Mississippi)
- Harrah’s Hoosier Park Racing & Casino
- Indiana Grand Racing & Casino
- Horseshoe Casino Tunica
- Turning Stone Resort Casino (New York)
- Harrah’s Philadelphia
- Caesars Southern Indiana
Although the Indiana Gaming Commission approved the transaction earlier this month, state regulators said the new company will have to divest three of the five Indiana casinos it operates by Dec. 31.
Ten months before Caesars and Eldorado entered into a definitive merger agreement last June, William Hill agreed to a partnership with Eldorado Resorts in September 2018. As part of the transaction, Eldorado gained a 20% ownership stake in William Hill, as well as 13.4 million ordinary shares of William Hill PLC. Under the deal, William Hill will serve as Eldorado’s sports betting operator (now renamed as Caesars) for a period of 25 years at its properties in jurisdictions where sports betting is legal.
It is the basis of that deal which may enable Caesars to rebrand the sportsbook properties under William Hill. Consider a statement William Hill U.S. issued last June when the Caesars-Eldorado merger agreement was first announced.
William Hill entered into a strategic partnership with its long term business partner Eldorado in September 2018. Under the agreement, William Hill gained the right to exclusively operate sports books at all properties owned or managed by Eldorado in the United States and to operate mobile sports betting in states where Eldorado obtains a license. These rights apply to casino properties owned or managed by Eldorado when the strategic partnership was signed and any subsequent acquisitions. Therefore, the rights apply to casinos currently owned or managed by Caesars if Eldorado’s acquisition of Caesars is completed. — William Hill, June 2019 statement
A William Hill U.S. executive did not immediately respond to a request for comment on Monday from US Bets.
Concerns on impending sportsbook consolidation
Since the Supreme Court’s historic PASPA decision over two years ago, there has been widespread concern among stakeholders that the expansion of legalized sports betting would trigger massive consolidation across the industry. The concerns intensified last November when William Hill purchased the sportsbook assets of CG Technology, including its Nevada and Bahamas operations. The transaction included the leases at several Vegas sportsbooks, including The Cosmopolitan of Las Vegas, The Venetian, The Palazzo, The Palms, and The Silverton.
In May, Flutter Entertainment completed a $12.2 billion merger with The Stars Group, bringing FanDuel and FOX Bet under the same umbrella. Intense competition in the sports betting space compels operators to offer a bevy of free bets and other promotions in attempts to retain customers. As the number of large corporations with major sportsbook operations shrinks, bettors could suffer in the former of higher vigs and less attractive odds.
Caesars Entertainment has also served as the official supplier of odds information for ESPN and Turner Sports.
During Monday’s session, Caesars Entertainment closed at 12.37 per share, down 0.05 (0.40%) on higher than average volume.