Caesars Entertainment has planned to shed William Hill’s brand name from its retail and online sports betting operations by the upcoming NFL. The announcement comes less than two weeks after the US casino operator completed the $3.7 billion deal in late April.
Caesars CEO Tom Reeg made the announcement on Wednesday, saying the company will rebrand its retail sports betting operations from William Hill to Caesars, and the digital sports betting app to Caesars Sports. Reeg hoped the transition to the parent company will take place ahead of the upcoming football season.
“We’re going to rebrand our books at Caesars, rebrand our apps as Caesars Sports, and tie our business into our Caesars Rewards database,” Reeg said during a first-quarter earning period.
Caesars Entertainment closed its $3.7 billion acquisition of the UK-based bookmaker that was first announced last September.
Caesars to Pursue More Aggressive Strategy
Caesars plans to significantly increase its investment in US sports betting, according to Reeg’s Q1 results earlier this week. The plan is to become a leading sports betting operator in the nation. The $3.7 billion deal has created a combined online business that did almost $150 million revenue in Q1.
Before the acquisition, the business was cash flow-positive as it showed a lack of investment. Reeg said it was one of the reasons the Caesars-William US operation lagged behind its competitors.
“William Hill with the UK parent and UK investor mindset was more conservative toward leverage, and it was less aggressive than it should be in the business.”
Reeg said the last football season did not bring expected sports betting revenues for the company as William Hill was “fighting with an arm behind its back” because of the ongoing transaction. This won’t be an issue during the upcoming NFL.
Rebrand to Happen in Some States
The parent company plans to rebrand retail and online operations in some jurisdictions. Some retail books will rebrand to Caesars and the app to Caesars Sports, while the William Hill brand will continue to operate in some states, according to a company spokesperson.
The casino operator then aims to merge its two apps on Hill’s Liberty platform with a single wallet. But the transition would be unlikely to take place in time for football season.
Reeg said Caesars would soon be injecting nearly $100 million in free cash flow every month that could be put behind sports betting. But he added the company would build its market share thoughtfully. However, he declined to share a target market share.
Rebrand Expected before September
Reeg said the target is to have the rebrand in place ahead of the scheduled Sep. 9 kick-off of the 2021 NFL season. However, the CEO said the “single wallet” will unlikely be ready in time for football season.
While praising the competitor MGM in the Michigan market, Reeg said Caesars will also install a new software system to be used throughout its properties across the country. He said the company’s expansive customer database will help achieve the goal.
Though the CEO did not reveal a target of attaining a market share percentage, he said the Caesars must “invest considerably more than has been invested historically here.”
He acknowledged that the casino operator is “very early in this process,” and it has got a great hand to play. But he said he’s is confident in the company’s “ability to operate and be a leader here.”
Caesars’ share price rose to 7% as of Wednesday morning to more than $102. In March 2020, its shares plunged to $9 as the coronavirus pandemic-led shutdowns began.
Caesars to Sell William Hill’s non-US Assets
The Caesars CEO also said the company will sell the non-US assets of William Hill over the next 12 months as Caesars is “not good at running a non-US business”. He said the sale will allow the company to use the capital in more efficient ways to better “drive returns to shareholders.”
The casino operators will launch the process of finding a suitor for William Hill’s non-US business over the next two months.
Caesars hopes to get $2 billion as an achievable price for the UK-based sportsbook’s non-US operations.
Potential suitors such as private investment fund Apollo Global Management and 888 Holdings are reportedly eager to compete for William Hill’s non-US business.