Is A US Listing On the Way? Five Things We Learned From William Hill H1 Results

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William Hill posted its H1 results Wednesday, with US net revenue down some 29% because of the coronavirus pandemic.

Demand since sports returned has been “better than expected,” but as ever, the real story lies behind the numbers.

LSR caught up with William Hill CEO Ulrik Bengtsson to get five key takeaways from the results.

1. The US is the key growth story for the business

The US sports betting market is still relatively immaterial to the wider business. It generated around $50m in H1, or 7% of group net revenues. However it’s clearly the selling point to investors. 

The front page of the H1 report originally was stamped with an “America’s favourite sportsbook” logo for the first time. That later was adjusted to a more US-friendly “America’s No 1 Sportsbook.”

That perhaps reflects the new focus of the business and it also was reflected in management comments.

“We believe US sports betting will become the largest regulated market in the world and we are ideally positioned to be a market leader,” the report noted.

2. Is William Hill the biggest sportsbook in the US ?

Hills can make its “America’s favourite sportsbook” claim because it is in the process of taking over all Caesars sportsbook operations. That will give it an estimated 29% market share, although the process is far from complete.

Bengtsson said William Hill was already running two Caesars retail books and would be taking over the remaining 50-plus “gradually.”

It will also migrate the Caesars digital sportsbook from Scientific Games tech onto William Hill’s proprietary technology, although that is not urgent, Bengtsson said.

“We think Caesars Sports as a brand has massive potential and it’s a big addition to the US business,” Bengtsson added.

3. CBS customer acquisition is underway

Elsewhere William Hill odds have been integrated into CBS Sports assets and are acquiring customers  “as we speak”, Bengtsson said.

The CEO said the integration would be much deeper than typical media deals, with a particular focus on cross-selling fantasy players.

“I’ve been around this industry for some time and done many of these media deals myself,” Bengtsson said. “And they often have not been particularly successful. That’s often because it’s more of a media buying deal than a true integration. But that’s not the case here. 

Bengtsson explained that the cross-sell for a fantasy player into betting was much easier than a “typical” media customer.

4. William Hill has firepower to compete on marketing

Bengtsson was asked about William Hill’s ability to compete with the marketing spend forthcoming from FanDuel, DraftKings, and BetMGM. BetMGM alone pledged to spend “whatever it takes” to build market share.

But Bengtsson pointed to a recent $200m share placement as evidence that Hills had firepower of its own. The group’s Nevada business is also cash-generative (COVID-19 notwithstanding,) providing a more sustainable source of funding.

“We feel financially in a good position to compete,” Bengtsson added.

5. Is there a US listing on the way?

William Hill is a logical candidate to spin out its US business and list it in the US. If nothing else it gives investors easier access to the US sports betting division without also buying UK retail and a sprawling online casino business.

However, Bengtsson said Hills had “not looked at that.”

“We are focused on building the US division into a nationwide business,” he said. “That’s the focus for us. If that leads us to other solutions down the road, we’ll deal with that at that point.”