Caesars targets accelerated sell-off of William Hill assets and sets out online betting roadmap

Caesars Entertainment will kickstart the sale of William Hill’s non-US business as soon as Q2 2021 as it looks to pay off more than $2bn in company debts.

In a Q1 2021 conference call, Caesars CFO Bret Yunker confirmed the US casino heavyweight would target an accelerated sale of surplus assets following the completion of its £2.9bn takeover of William Hill in April.

“We expect to launch the sale process by the end of this quarter, announce a buyer in late Q3 or early Q4 and have that closed within 12 months of today,” Yunker confirmed.

Hills’ non-US business includes William Hill International, a portfolio of UK-based betting shops and the Mr Green brand.

Caesars will repay at least $2bn of company debt through a combination of the sale of William Hill assets and the potential offloading of some of its land-based business real estate on the Las Vegas Strip.

Apollo Global Management, a rival bidder versus Caesars in the race for William Hill, is expected to return with a separate offer for the non-US business.

The private equity fund has recently made a $5bn investment in Yahoo parent company Verizon Media, suggesting it could look to pivot the firm’s Yahoo Sports business towards sports betting and online gambling.

Caesars CEO Tom Reeg dismissed suggestions that the operator could hold onto William Hill’s non-US assets as a way of diversifying its operations beyond the US.

“One of my pet peeves when I was an investor was companies that didn’t know what they were good at, and I can’t tell you we’re good at running a non-US digital business,” Reeg explained.

“I can tell you that there are almost certainly people out there that will do it better than us and see opportunity there and I can deploy that capital into businesses that I know will drive better returns to shareholders.

“So no, we’ve not had a moment’s pause in terms of selling the non-US business,” Reeg added.

Caesars previously partnered with William Hill on a joint venture (JV) agreement in the US market, which proved instrumental in pushing its takeover bid over the line.

Discussing the rationale for pivoting away from the JV towards sole ownership via a takeover, Reeg cited the need to take control of the combined business to implement a change in strategy.

“William Hill with the UK parent and a UK investor mindset was more conservative toward leverage and was not as aggressive as we expect we will be in this business,” Reeg explained.

The Caesars CEO confirmed that Hills’ US sportsbook would be rebranded to Caesars and the Hills’ US app to Caesars Sports before being fully integrated with the Caesars rewards database.

“I would say that the former William Hill, particularly in the last football season which is really when the spotlight was shown for the first time on this space, was fighting with an arm behind its back because of the limbo between signing and closing the transaction,” Reeg said.

“We are disciplined in our deployment of capital, but we are also sober enough to realise we have to invest considerably more than has been invested historically here,” he added.

Reeg told analysts he expected Caesars’ online betting and gaming offerings to compete with the likes of BetMGM in the long-term thanks to its significant omni-channel database and a fully vertically-integrated tech stack.

He set a target of September to launch a “competitive [online] business”, with a single wallet function to be built shortly after in the fall.

“You shouldn’t expect us to be just throwing money away to buy market share,” Reeg said.

“You should expect us to build this thoughtfully, but you should expect to see a significant increase in investment in this side now that we’ve got all our ducks in a row.