Nevada gaming green light for William Hill

William Hill’s foray into the US market can begin after the Nevada Gaming Commission granted the bookmaker non-restricted gaming licences.

The licences mean that William Hill can proceed with the acquisitions announced last year of three US sports betting businesses – American Wagering, Brandywine Bookmaking and the racing and sportsbook assets of Sierra Developments, which trade as Cal Neva.

The purchases, to be funded in cash, will complete on June 27 for a total consideration of about $49m. Before the acquisitions, William Hill had also advanced $6.4m in arm’s length convertible loans to AWI and Brandywine.

The deals will give Britain’s largest bookmaker a foothold in the US at a time when there is speculation that the country may move towards a regulated sports betting market.

At present sports betting is illegal in 46 US states. However, it is allowed in Delaware, Oregon, Montana and Nevada, and in December, the Department of Justice announced a new policy on online gambling, prompting some analysts to predict a broader relaxation of US gambling laws.

The DoJ subsequently made clear that it continued to regard sports betting as illegal. Even so, the three acquisitions will give William Hill access to the burgeoning sports betting market in Nevada – home of the gambling haven Las Vegas – which was worth $2.7bn in 2010.

AWI runs 72 sportsbooks, or sports-betting locations, in the US, while Cal Neva has 31, and Brandywine 16. In addition, AWI supplies technology to larger casino groups in Nevada.

Ralph Topping, chief executive, said the push into the US was an important part of William Hill’s international growth strategy.

“We will … combin[e] our brand and product range with AWI’s, Brandywine’s and Cal Neva’s extensive Nevada footprint, strong local relationships and trusted service. We look forward to working with our new colleagues to grow a leadership position in the Nevada sports betting industry and beyond,” he said.

William Hill expects the acquisitions to be “marginally earnings enhancing” in 2013, once the costs associated with them have been taken into account. The exceptional transaction and integration costs stemming from the three deals are currently projected to be in the region of $8m over 2011 and 2012.

Shares in the company, up 28 per cent on the year, rose a further 0.32 per cent to 282.2p in early morning trading in London.