Casino entertainment company Eldorado Resorts Inc. will receive shares in British gaming services provider William Hill Ltd. and an equity stake in its U.S. business as part of a deal between the two companies to provide digital and land-based sports betting and online gaming in the U.S., William Hill said Sept. 5.
In a statement, William Hill said the partnership will provide it with extensive market access via Eldorado's 21 properties across 11 states and a customer base of 23 million people. That reach could be extended to 26 properties in 13 states following the completion of Eldorado's acquisition of certain operations of Tropicana Entertainment Inc.
William Hill said the two companies will open William Hill sportsbooks in five properties across Atlantic City, N.J., West Virginia and Mississippi within weeks. The partnership also plans to roll out sportsbooks, digital betting and gaming services in additional casinos and states in the coming months, subject to legislation in each state.
William Hill US operates in Nevada, New Jersey, Delaware, Iowa, Mississippi, West Virginia, the Bahamas and St. Kitts.
The transaction is part of an agreement to establish William Hill US as Eldorado's exclusive sports wagering service provider for a period of 25 years at its properties in states where sports betting is legal. The agreement, which builds on a partnership between the two companies that began in 2012, also covers the provision of online casino.
Under the terms of the deal, Eldorado, based in Reno, Nev., will get $50 million worth of William Hill's ordinary shares, or about 1.6% of the company, plus a 20% holding in William Hill US. The consideration shares will rank equally with William Hill's existing ordinary shares.
Eldorado will have the option to monetize its equity in William Hill US following a public offering of William Hill US or through a conversion of the 20% equity stake to William Hill shares or cash at William Hill's discretion after five years.
In lunchtime trading in London, William Hill's shares were up 13.2 pence, or 5.3%, at 261.7 pence.
"This partnership provides extensive cross-sell and profit growth opportunities to both parties," William Hill CEO Philip Bowcock was quoted as saying.
"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," Eldorado Chairman and CEO Gary Carano was quoted as saying.
The announcement comes a month after William Hill disclosed its expansion plans in America after the U.S. Supreme Court lifted the national ban on sports betting in May.
The Supreme Court ruling has opened the doors for a number of ventures and partnerships in sports betting, including that of MGM Resorts International and GVC Holdings PLC, Scientific Games Corp. and Caesars Entertainment Corp. and of FanDuel Inc. and Boyd Gaming Corp.