William Hill today filed its full-year 2019 results, including a record $2.5 billion in stakes handled by the US sports betting business.
The operator hailed “material progress” toward its US ambitions of “growing a business of scale” in summarizing its results.
So, what did we learn from the results?
Size of William Hill US market share
Hills claimed to take one out of every four bets placed in the US. However, much of that figure is driven by its existing Nevada business. The expansion business has a 20% market share, and that falls to 9% of online and mobile.
The expansion business also posted operating losses of $33.2 million.
That figure marked a 21% improvement in FY18, but was also pumped up by a one-off $13.5 million payment from The Stars Group for skin access via Eldorado.
About that Eldorado-Caesars merger …
Speaking of Eldorado, the casino company’s acquisition of Caesars is a big win for William Hill.
Hill is the exclusive sportsbook provider for Eldorado, and that arrangement carries over to Caesars when the deal completes.
“We estimate the profit contribution possible from additional retail operations at Caesars casinos would be $20 (million)-$35 million of annual EBITDA within three years,” the Hills report said.
Gaming expansion is not a priority
US gaming seemed low on the agenda on today’s investor call. CEO Ulrik Bengtsson was asked about William Hill as a gaming brand and whether the firm would look to adopt something new for that vertical.
He suggested not, saying the point of the recently signed CBS Sports partnership was to build the William Hill brand. He also pointed out online casino was limited to a handful of states and building a nationwide gaming brand would be difficult.
Bengtsson was also asked for updates on the CBS deal but didn’t have much to add beyond the initial announcement from January.
Core Nevada business is ticking over
Hills maintained a market share of 32% across Nevada, with revenues up 2% to $107 million. Around 60% of handle was taken online.
Profits were down 17% to $35 million thanks to increased costs, Nevada operations are expected to generate enough cash next year to pay for the expansion business.
It means Hills US is expected to be breakeven in 2020 – unlike a lot of its peers.
“This is an exciting time to be William Hill’s CEO,” Bengtsson said. “Our industry is evolving and this brings great opportunities, underlining the importance of our efforts to reposition the business.”