Will Hill, M&A and Player Experience, In Conversation with Ralph Topping, Ex. CEO, William Hill
With the gambling giant Caesars Entertainment agreeing terms for Caesars UK to acquire the entire William Hill business for approximately £2.9bn (€3.17bn/$3.72bn), and the bookmaker’s board considering this amount “fair and reasonable”, the agreement seems imminent.
When you couple the fact that Caesars has now offloaded Harrah’s Reno to CAI investments for £32.2m (€35.3m/$41.5) with Nevada’s casino revenue declining to £577 (€632/$743m) in August, the need, for arguably, the world’s number one online gaming business has never been higher.
We caught up with the man who drove William Hill’s initial digital transformation, Ralph Topping, Ex. CEO, William Hill to hear his thoughts on the acquisition.
“If you’re talking about who’s going to get William Hill, the US division’s future is set, and it’s going to be Caesars. The real interest and drama will be around who gets what else is left on the Christmas turkey.
Who’s going to get the cash-generating UK retail leg, and who’s going to get the tasty wings of online in the UK and online in Europe. So that’s where the fascination is going to be.”
We went on to ask Ralph about whether M&A’s like this are good for the industry as a whole.
“Yes. I think they are a natural consequence of the industry’s relationship with regulation and taxation. The law, tax and regulation can be restrictive at times, but it can also be very helpful.
We’re going through a distinct period at the moment, where in the UK, the industry is under a bit of pressure and when an industry’s under that level of pressure, you see M&A.
Looking at the US, legal sports betting is all new so we’re going through a joint venture phase, and we’ve now got an acquisition taking place with WH.
It’s the beginning of a process, which you’ll see unwind over the course of the next three to five years as it fully dawns on organisations and financial markets how challenging the US sports betting market actually is. As in other countries, there will only be a handful of market dominators, three perhaps four.
You just need to look at the projections from companies that all say they are going for large shares of the US market. They don’t add up to a hundred per cent, they go well north of that!
Therefore, in that environment, you’re going to see businesses that get realistic/desperate, which will drive M&A activity in the US. We should be fully prepared for that as we go forward.”
When asked if the customer actually benefits from M&A activities like this, Ralph went on to add:
“In the US, it’s such a new and rapidly developing market post PASPA, so I think the customer has got and will continue to receive fantastic choice.
Some are in an environment without easy access to the marketplace and are having to jump in the car and travel to a fixed location, so it’s not ideal for customers in this day and age.
But if you’re in a location where you can go online and access betting opportunities, I think it’s ideal for customers as online is almost the perfect market for the player.
But if you’re in a location where you can go online it’s the ideal for customers as it is the perfect market for the player.
I think we’ll see much more digital growth as the industry matures in the US. There’s a huge amount of vested interest there, but in reality, digital progress won’t be halted.
The market’s going to get much more interesting for players, but at the moment there’s a surge in demand for sports betting which is exciting investors and forcing up valuations.”
From speaking with Ralph, it reinforces the fact the Caesars are the clear favourites for emerging as victors from the William Hill saga.
It also seems apparent that this will be the first of many acquisitions of UK bookmakers. More specifically, ones who have refined their processes and have responsible gaming infrastructures that can be plugged into the US businesses eyeing up their next move.
With so many big players going for the same slice of the pie, it’s only a matter of time before the financial flexing becomes fully pronounced.