Mia Gardner | 05 Jun 2019
Reporters said that sources close to the meetings had spoken to them, explaining that multiple detailed discussions had been held. A so-called cash and shares deal had been in the making, but plans had eventually fallen short and been abandoned when agreements could not be reached regarding price. It seems that this will be an industry altering deal that could have happened, but fell short only due to disagreements at the last hurdle.
It is no secret that United Kingdom-based bookmakers have been seeking to expand into the United States. This is due to the US abolishment of PASPA (Professional and Amateur Sports Protection Act), while the opposite had been happening locally. In May the Supreme Court in the US lifted a ban on sports betting, which has made it all but certain the legalisation will follow in more than a few states. But in the UK operators are feeling the increased pressure of a crackdown from regulators, including an April 1st decision to reduce the maximum allowable bet on gaming machines. The amount has been slashed from £100 to £2, which will clearly have a drastic impact on revenue flow.
This new regulation is serving to add pressure to William Hill, which has already been feeling the brunt of increased competition. Shares for the company have been in a nosedive, with a reported loss of a stunning £722 million for 2018, which is in stark contrast to the reported £146.5 million profit from the previous year. The firm purchased online-based Mr Green & Co AB earlier in the year in an effort to boost profits, but as to how effective the move will be remains to be seen.
The reveal of talks with Caesars have sparked speculation that William Hill is ripe for takeover. Competitor companies in the UK have already been scrambling to find their own solutions to the new regulations, with multi-billion dollar deals sure to be announced in the new future. GVC Holdings purchased Ladbrokes Coral last year, in a massive deal that was valued at upwards of £3 billion. Ladbrokes itself was the result of a previous deal that saw a merger with Gala Coral, which took place in 2016. All of which paves the way for a similar future for William Hill.
It is a time of major turmoil in the UK gaming industry, with expectations high that the major moves being made will only escalate before eventual balance is achieved.