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Today, Caesars began the final leg of a convoluted journey. In a press release, it announced that is has reached an agreement to sell off most of William Hill to 888 Holdings Plc.
Caesars completed its own acquisition of William Hill less than six months ago, so this is a rapid turnaround. It doesn’t represent a case of buyer’s remorse, however. Rather, it was the plan all along. The actual destination on this journey was for Caesars to expand its database of sports betting customers and, more importantly, to secure a world-class online gambling platform. The William Hill brand — and the rest of the company’s operations — just came along for the ride, temporarily.
The process of switching William Hill’s US operations over to the Caesars brand is already underway. At the same time, Caesars is migrating its own pre-existing online casinos and sportsbooks to the Liberty platform developed by William Hill.
The net result of this is a relatively affordable purchase for Caesars. Its acquisition of William Hill originally cost £2.9 billion. The sale to 888 is for £2.2 billion (approx. $3 billion), which is significantly more than a previous offer by Germany’s Tipico. Once the dust settles, Caesars will have obtained the portion of the company that it actually wanted for about £700 million, or a little under $1 billion in US dollars.
Caesars financed the original purchase through a combination of loans and issuance of new shares. Caesars says that after repaying those loans, the sale will leave it with roughly $1.2 billion in cash on hand.
The bulk of William Hill’s operations are in Europe. Meanwhile, Caesars’ only operations outside of North America consist of a single casino in Dubai. That’s a clear mismatch, so the remainder of William Hill will be better managed by 888, which is likewise focused largely on the European market.
Indeed, 888 has attempted to acquire William Hill in the past, including a £3.6 billion offer that the bookmaker rejected in 2016. William Hill claimed at the time that the offer undervalued its prospects. However, regulatory changes in the UK dragged the company’s share prices down in the ensuing years, leading to it accepting a substantially lower offer from Caesars.
In announcing the sale, Caesars CEO Tom Reeg said:
I’d like to personally thank Ulrik and all of the team at William Hill for their professionalism and dedication while they have been part of Caesars and particularly during the sale process. I am delighted that, as we said we would when we announced the offer for William Hill PLC, we have found an owner for the William Hill business outside the US which shares the same objectives, approaches and longer-term ambitions of that business.
Just as Caesars seems uninterested in European expansion, 888 hasn’t pushed its brand much in the US. It has had its own 888 Casino and sportsbook in New Jersey since 2019, but hasn’t launched in other states and doesn’t seem to be planning to. However, it does have substantial business-to-business operations and will continue to have an indirect presence in the US that way. For instance, it provides the technology for both WSOP Poker, and the three lottery-operated online casinos in Delaware.