Monday 24th June 2019 saw Eldorado Resorts merge with Caesar Entertainment in a $17.3 Million deal. The deal is expected to close next year with the combined companies waiting for the approvals from the regulatory body. With the deal almost complete, analysts are accessing how the sportsbooks the companies operate will fare.
Deals in existence
In the 26 properties owned by Eldorado Resorts in 12 states, several of them have operational sportsbooks with Caesar Entertainment properties also taking sports bet but having different sportsbook operators.
With Eldorado, there is a 25-year deal in existence with the giant operator, William Hill and still on the table is a 20-year deal with The Stars Group. With Caesar, Draftkings deal has also been brought on the negotiation table.
Marc Rubinstein, Reid Rubinstein & Bogatz managing partner, points out that it would be hard to foresee what is to happen without seeing the deal terms. He anticipates companies in close association with the Eldorado Resorts would have a better edge.
When asked about William Hill and Star Group partnership, Thomas Reeg, Eldorado Resorts CEO, said that they would analyze a better way to go about the situation and that it would not surprise him if a ‘different answer’ came by.
Caroline Coyle, Eldorado spokeswoman, on the other hand, did not comment on what would be of Draftkings if the deal is approved.
William Hill released a statement the following day on the terms of the September agreement where they cite the operator had the right to operate all sportsbooks in Eldorado managed or owned properties in the US and further to that, they had the right to operate mobile sportsbooks of any state Eldorado would have a license to operate in.
‘These rights apply to casino properties owned or managed by Eldorado when the strategic partnership was signed and any subsequent acquisitions. Therefore, the rights apply to casinos currently owned by Caesars if Eldorado’s acquisition of Caesars is completed.’ The statement read
Joe Asher, William Hill US CEO, said that if the deal was to be approved, they would have ‘much on their plate.’ The Stars Group deal does not seem to be bothering William Hill as it receives 50% equivalent in Stars Group payable for any access to the resorts brands. Quizzed about Draftkings, Asher refused to comment on the sportsbook.
In Draftkings case, spokeswoman Sabrina Macias released a statement stating their confidence in expanding their presence in all the states that authorize sports betting terming the sportsbook as ‘well-positioned’
Anthony Cabot, UNLV Law professor sees William Hill as the major benefactor and continues to state the consolidation of the sportsbook operators is inevitable.
Benjamin Edwards, another law professor, says it would make sense if the merged company opted for one operator as opposed to many but he sees this move causing monopoly issues in the gambling market.
The deal is to be approved later and for the sportsbook operators whose future hang in the air, they would wish to be in the deal that is expected to form US largest gambling company.