Towards the back-end of 2020, as the world began to gradually emerge from a global pandemic, the ocean of motion that is the online gambling industry was rocked as a whale made one of the biggest splashes to date, sending a tidal wave through the market as US giant
Already the US market was starting to show cautious signs of progression in online gambling, with more states having bills for online gambling passed, though this provided the market with the biggest shot of confidence yet, as to where it was heading.
Traditionally, Caesars is a company that has solely specialised in the land-based casino resort sector, essentially merging two industries (gambling and hospitality) into one collective service offering and are one of the biggest of their kind; arguably the flagship of the Las Vegas strip.
Their buyout of William Hill was a major statement of intent of how they viewed the future of the US online gambling market, following the opening up states and is undoubtedly one of the shrewdest moves from what is effectively a land-based gambling company to move into the online world in a bid to become major players.
What was interesting though, is that they had no plans to utilise the European assets of William Hill, instead, purely focusing on the firm’s already well-established US site. As a result, over the last few months, it has sparked interest from a number of parties.
888 rivalled by fierce competition
There was no doubt that Caesars would have offers for the company’s European divisions, though what was in question was how much any deal would go through for. Interestingly, 888 Holdings, were relative latecomers to the party, in fact, private equity firm Apollo Global Management being initially, the only connected entity.
Interestingly, this was the second involvement from Apollo in less than 12 months, having failed to acquire William Hill in its entirety the first time around, before being blown out of the water by 888.
It took an eye watering £2.2 billion bid from the Gibraltar-based firm to secure the assets, with plans now being to create a combined group of 12,000 employees, with an expected annual revenue of £1.8 billion.
Indeed 888 CEO, Itai Pazner emphasised the exciting possibilities that this presents for the company as the company seeks to tighten its grip on the industry: “The acquisition of William Hill International is a transformational and hugely exciting moment in 888’s history.
“This transaction will create one of the world’s leading online betting and gaming groups with superior scale, exceptional brands, increased diversification, and a platform for strong growth.”
Intriguing retail possibilities
Originally, there was much speculation surrounding the details of Caesars’ wish to sell William Hill’s non-US assets and whether they would all be sold as a package, or individually.
This was very much the case with
Despite gambling and sports betting, in particular, experiencing a major shift online over the last decade, there is still very much a segment of the market that frequents betting shops, with this largely being more generational.
It remains to be seen what 888 has in store for these though, with one possibility being a rebrand, or indeed a complete overhaul of what they offer in their premises. Where 888 could gain an advantage over competitors on the betting shop front, is on the casino gambling front.
Unbeknown to many, 888 has its own B2B division (Dragonfish), which is responsible for developing the majority of the software that we see on each of their assets. Do not be surprised to see 888 utilising Dragonfish to incorporate unique software (slot and casino games) into the slot machines and gambling terminals that we see in William Hill shops, in order to differentiate themselves from their competition.
Going head-to-head for industry domination
It is believed by many that 888 Holdings is the main rival of Entain, who are arguably the biggest online gambling and sports betting conglomerate in the world, with over 24 different brands under its umbrella, including Coral, Ladbrokes and Bwin.
Following Caesars acquisition of William Hill, Entain were the subject of a bid that exceeded £8 billion from the entertainment company’s main rival; MGM Resorts, who moved quickly and ambitiously in their attempt to trump its competitor. Having failed in an attempt, the company was then banned from making another bid for six months, ironically which has elapsed this month.
For 888 though, they will no doubt want to concentrate on gaining more industry share, particularly in new and emerging markets, with a number of European territories since having online gambling legislation passed, including Greece and the Netherlands.
Future acquisitions could well become a key part of the strategy for 888, particularly of smaller, more agile start-ups with a more unique offering and an innovative approach to the industry, whose products they can incorporate with their own.
This also serves up much speculation about what Caesars’ next move may be, who now have cash to burn, having effectively made a profit when you factor in the return on investment that they will generate from William Hill’s US assets.
Whether the company turns its attention to other US brands remains to be seen, though their haste to sell off William Hill’s European division, could have been in anticipation of MGM making another bid for Entain. As such by generating and holding out for what was a blockbuster fee could have been to give them liquidity to rival a second possible bid from MGM for Entain.
Development and possible integration of sports betting product
Without a doubt, one of the most valuable assets of William Hill is its sports betting asset and for over five decades, the company has been leaders in delivering exceptional service to their customers, especially in such sports like horse racing.
While 888 has a respectable sports betting site, the company may decide to integrate at least some of William Hill’s products into 888Sport, or at least some of the tools that the British bookmaker’s customers currently enjoy.
Cross-marketing is certainly one area that we might see 888 take advantage of, especially on the sports side and as a result, this presents possibilities to really differentiate their customer acquisition offers and highlight this in advertising campaigns.
Currently, 888 appears to have a good mix of online gambling products, though they don’t particularly dominate one segment if you discount online bingo. Making their sports betting offering more substantial from the perspective of the company as a whole (888 Holdings), it could provide valuable data as to where the future lies, which will obviously be indicated by their balance sheet.
There is no doubt that the whale has made a splash; the job now is to make sure it doesn’t become beached.